Economic Effects

The Second Industrial Revolution had profound economic effects on the United States within just a few decades of its beginning, the Second Industrial Revolution was a major turning point in the history of the United States. America was transformed from a mostly rural agricultural/farming society to a boomin industrial economy centered in major cities. The rural areas were now connected to large urban markets by a well-developed transportation network, and unavoidable crop failures no longer doomed them to poverty. At the same time, however, industrialization and urbanization drastically reduced the share of the population engaged in agriculture. At the time of the American Revolution and the New Nation, Thomas Jefferson believed that America would be a society based on agriculture, conversely, Alexander Hamilton believed America would be an industrial society. The two argued publically about the direction of the nation until Hamilton's untimely death caused by Aaron Burr from the two men dueling over their reputations in Wehawken, New Jersey. Hamilton's vision would come to fruition only 50 years after his death. America would become an industrialized nation and progress further than he would have ever imagined.

Between 1870 and 1900, almost all industrialized nations enjoyed booming economies that led to dramatically lower consumer prices, resulting in greatly improved living conditions.

While it was a period of unprecedented progress and innovation that propelled some people into vast wealth, the middle class was developing into a consumer public, but with some economic issues to resolve along the way.

Modernization

The Progressives were avid modernizers, with a belief in science and technology as the grand solution to society's flaws. They looked to education as the key to bridging the gap between their present wasteful society and technologically enlightened future society. Characteristics of Progressivism included a favorable attitude toward urban–industrial society, belief in mankind's ability to improve the environment and conditions of life, belief in an obligation to intervene in economic and social affairs, a belief in the ability of experts and in the efficiency of government intervention. Scientific management, as promulgated by Frederick Winslow Taylor, became a watchword for industrial efficiency and elimination of waste, with the stopwatch as its symbol.

Mudrakers

Magazines experienced a boost in popularity in 1900, with some attaining circulations in the hundreds of thousands of subscribers. In the beginning of the age of mass media, the rapid expansion of national advertising led the cover price of popular magazines to fall sharply to about 10 cents, lessening the financial barrier to consume them. Another factor contributing to the dramatic upswing in magazine circulation was the prominent coverage of corruption in politics, local government, and big business, particularly by journalists and writers who became known as muckrakers. They wrote for popular magazines to expose social and political sins and shortcomings. Relying on their own investigative journalism, muckrakers often worked to expose social ills and corporate and political corruption. Muckraking magazines, notably McClure's, took on corporate monopolies and political machines while raising public awareness of chronic urban poverty, unsafe working conditions, and social issues like child labor. Most of the muckrakers wrote nonfiction, but fictional exposés often had a major impact as well, such as those by Upton Sinclair.In his 1906 novel The Jungle Sinclair exposed the unsanitary and inhumane practices of the meatpacking industry, as he made clear in the Jungle itself. He quipped, "I aimed at the public's heart and by accident, I hit it in the stomach," as readers demanded and got the Meat Inspection Act and the Pure Food and Drug Act.

The journalists who specialized in exposing waste, corruption, and scandal operated at the state and local level, like Ray Stannard Baker, George Creel, and Brand Whitlock. Others such as Lincoln Steffens exposed political corruption in many large cities; Ida Tarbell is famed for her criticisms of John D. Rockefeller's Standard Oil Company. In 1906, David Graham Phillips unleashed a blistering indictment of corruption in the U.S. Senate. Roosevelt gave these journalists their nickname when he complained they were not being helpful by raking up too much muck.

Child Labor

Perhaps the most tragic negative aspect of the Second Industrial Revolution was the growth of unregulated child labor. To help their impoverished families, children, often as young as four years old, were forced to work long hours for little pay in factories under unhealthy and unsafe conditions. By 1900, an estimated 1.7 million children under the age of fifteen were working in American factories.

The practice of child labor remained common until 1938 when the Fair Labor Standards Act (FSLA) imposed the first nationwide compulsory federal regulation of wages and working hours. Sponsored by Sen. Robert F. Wagner of New York and signed by its ardent supporter, President Franklin D. Roosevelt, the FSLA prohibited the employment of minors in “oppressive child labor,” established a mandatory minimum wage, and limited the number of hours employees should work.

Company Ownership

The basic model of ownership of industry also underwent a major “innovation” during the Second Industrial Revolution. The oligarchical ownership of companies, if not entire industries by wealthy individual “business magnates” that had dominated during the original Industrial Revolution in the early to mid-19th century was slowly replaced by today’s model of wider public distribution of ownership through the sale of stock to individual investors and institutions such as banks and insurance companies. The trend began during the first half of the 20th century when several European countries chose to convert basic sectors of their economies to collective or common ownership, a common characteristic of socialism. Beginning in the 1980s this trend toward economic socialization was reversed in the United States and the United Kingdom.

Progressive Era Economic Reforms

The Progressive Era in the United States (roughly 1890s to 1920s) was characterized by a variety of economic, political, and social reforms aimed at addressing the problems created by industrialization and urbanization. The Progressive Era was marked by the growth of labor unions such as the American Federation of Labor (AFL), the expansion of labor rights, the establishment of antitrust laws targeting major monopolistic firms and industries and an increase in taxation of the upper class. Progressive economic policies emerged as a response to the excessive big business power and the concentration of wealth and power amongst a very small fraction of society during the Gilded Age. This period introduced many landmark economic policies, including the introduction of an income tax in 1913. The estate tax also introduced in 1897, first in the state of New York. By 1924, estates valued at more than $10 million were taxed a rate of 40%.

Some of the key economic reforms of the Progressive Era include:

Antitrust laws: During the late 19th century, many large corporations had become monopolies, controlling entire industries and stifling competition. To address this problem, the federal government passed a series of antitrust laws, including the Sherman Antitrust Act of 1890 and the Clayton Antitrust Act of 1914. These laws aimed to break up monopolies and promote competition in the marketplace.

Regulation of business practices: In addition to antitrust laws, the federal government also began to regulate various business practices. For example, the Pure Food and Drug Act of 1906 required companies to accurately label their products and prohibited the sale of misbranded or adulterated food and drugs. The Meat Inspection Act of 1906 provided for federal inspection of meatpacking plants to ensure that the meat was safe for consumption.

Labor protections: The Progressive Era saw the growth of labor unions and the passage of laws aimed at protecting workers. For example, the National Labor Relations Act of 1935 gave workers the right to organize and bargain collectively with their employers, while the Fair Labor Standards Act of 1938 established minimum wage and overtime protections for workers.

Income tax: In 1913, the federal government established a permanent income tax as part of the 16th Amendment to the Constitution. This tax helped to fund the government and provided a more equitable way of raising revenue than tariffs and other taxes.

Conservation: The Progressive Era also saw a growing concern for the environment and the need to conserve natural resources. President Theodore Roosevelt was a leading proponent of conservation and established national parks and forests, as well as the U.S. Forest Service, to manage them.

Overall, the economic reforms of the Progressive Era aimed to promote competition, protect workers, and ensure that businesses operated in a fair and responsible manner. These reforms helped to create a more equitable and sustainable economy for the United States.

Progressive Era - Economic Effects