We're still in the fight
Robert Reich in robertreich.substack.com
These problems aren’t new. In the late 1800s, they dominated
the country during America’s first Gilded Age. We overcame these abuses then,
and we can do so again.
Mark Twain coined the moniker “The Gilded Age” in
his 1873 novel to
describe the era in American history characterized by corruption and inequality
that was masked by a thin layer of prosperity for a select few.
The end of the 19th century and start of the 20th marked a
time of great invention — bustling railroads, telephones, motion pictures,
electricity, automobiles — that changed American life forever.
But it was also an era of giant monopolies — oil, railroad,
steel, finance — run by a small group of men who had grown rich beyond anything
America had ever seen.
Money consumed politics. Robber barons and their lackeys
donated bundles of cash to any lawmaker willing to do bidding on their behalf.
When lobbying wasn’t enough, the powerful moneyed interests turned to bribery —
resulting in some of the most infamous political scandals in
American history.
The gap between rich and poor in
America reached record levels. Large numbers of Americans lived in squalor.
Anti-immigrant sentiment raged, leading to the enactment
of racist laws to restrict
immigration. It was also a time of voter suppression,
largely aimed at Black men who had recently won the right to vote.
The era was also marked by dangerous working conditions.
Children often as young as 10,
but sometimes younger, worked brutal hours in sweatshops. Workers trying to
organize labor unions were
attacked and killed.
It seemed as if American capitalism was out of control, and
American democracy couldn’t do anything about it because it was bought and paid
for by the rich.
But America reached a tipping point. The nation was fed up.
The public demanded reform. Many took to the streets in protest. Investigative
journalists, often called “muckrakers” then,
helped amplify their cries by exposing what was occurring throughout the
country.
A new generation of political leaders rose to end the
abuses.
Teddy Roosevelt warned that “a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power,” could destroy American democracy.
After becoming president in 1901, Roosevelt used the Sherman Antitrust Act to
break up dozens of powerful corporations, including the giant Northern Securities Company,
which had come to dominate railroad transportation through a series of mergers.
Seeking to limit the vast fortunes that were creating a new
American aristocracy, Congress enacted a progressive income tax through
the 16th Amendment, as
well as two wealth taxes.
The first wealth tax, in 1916, was the estate tax — on the wealth
someone accumulated during their lifetime, paid by the heirs who inherited it.
The second tax on wealth, enacted in 1922, was a capital
gains tax — on the increased value of assets, paid when those assets were sold.
The reformers of the Gilded Age also stopped corporations from giving money directly
to politicians or political candidates.
Then Teddy Roosevelt’s fifth cousin (you
may have heard of him) continued the work through his New Deal programs, creating Social Security, unemployment insurance,
and a 40-hour workweek and
requiring that employers bargain in good faith with
labor unions.
But following the death of FDR and the end of World War II,
and after America had built the largest middle class the
world had ever seen, we seemed to forget about the abuses of the Gilded Age.
The reforms that followed the first Gilded Age withered.
Starting with Reagan, taxes on the wealthy were lowered.
Campaign finance laws were weakened. Social safety nets became frayed.
Corporations stopped bargaining in good faith with labor unions.
Now, more than a century later, America has entered a second
Gilded Age.
Monopolies are once again taking over vast swaths of the
economy. So we must strengthen antitrust enforcement to bust up
powerful companies.
Now another generation of robber barons, exemplified by Elon
Musk, is accumulating unprecedented money and power.
So, once again, we must tax these exorbitant fortunes.
Wealthy individuals and big corporations are once again
paying off lawmakers, sending them billions to
conduct their political campaigns, even giving luxurious gifts to Supreme Court justices.
So we must protect our democracy from Big Money, just as we did before.
As it was during the first Gilded Age, voter suppression is
too often making it harder for people of color to participate in our democracy.
So it’s once again critical to defend and expand voting rights.
Working people are once again being exploited and abused, child labor is
returning, unions are being busted,
the poor are again living in unhealthy conditions, homelessness is on the rise,
and the gap between the ultra-rich and everyone else is nearly as large as in the first Gilded
Age.
So once again we need to protect the rights of workers to
organize, invest in social safety nets, and revive guardrails to protect
against the abuses of great wealth and power.
Seeking these goals may seem quixotic right now, just weeks
before Trump and his regime take power with a bilious bunch of billionaires.
But if history is any guide, they will mark the last gasp of
America’s second Gilded Age. We will reach the tipping point where Americans
demand restraints on robber-baron greed.
The challenge is the same as it was at the start of the 20th
century: To fight for an economy and a democracy that works for all rather than
the few.
I realize how frightening and depressing the future may look right now. But we have succeeded before, when we fought against the abuses of the first Gilded Age. We can — and must — do so again now, in America’s second Gilded Age.
© 2021 robertreich.substack.com
Robert Reich is the Chancellor's Professor of Public Policy at the University of California, Berkeley, and a senior fellow at the Blum Center for Developing Economies. He served as secretary of labor in the Clinton administration, for which Time magazine named him one of the 10 most effective cabinet secretaries of the twentieth century. His book include: "Aftershock" (2011), "The Work of Nations" (1992), "Beyond Outrage" (2012) and, "Saving Capitalism" (2016). He is also a founding editor of The American Prospect magazine, former chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, "Inequality For All." Reich's newest book is "The Common Good" (2019). He's co-creator of the Netflix original documentary "Saving Capitalism," which is streaming now.
