How the Rich Got Rich and the Poor Got Poor:
Perspectives on Wealth Inequality from 1880-1950
The aim of this project is to demonstrate the various perspectives people held regarding wealth inequality at the turn of the 20th century. The period of time from 1880 to 1950 saw the polarization of the wealth spectrum in the United States resulting from the industrialization of the economy. This polarization created two distinct classes that represented the opposite sides of this spectrum, the very rich and the very poor. With the creation of these classes and the obvious disparity between them came a number of new ideas about how wealth inequality should be addressed. These ideas originated from a diverse group of perspectives on the concept of individual accumulation of wealth. By examining an array of primary sources, including illustrations, inquiries, and autobiographies, we see how these perspectives were developed. These perspectives will help us better understand how wealth inequality has been viewed historically in the United States.
In order to be able to properly analyze the different perspectives shown in this project, the subject of wealth inequality must be better understood. This can be done by examining exactly how this inequality was created and why this period of time was especially important.
The late 1800s and early 1900s were a time of industrialization for the American economy. The agrarian economy of previous centuries was being replaced with an economy based on factory production and mass cultivation of resources. With this change in means of production came a change in income for many workers. As factories were built to support the new demands for production, an increased need for cheap labor arose. Low wage positions were filled in order to work the manufacturing-oriented jobs and high wage positions were filled in order to manage this manufacturing. With these new classes of employment came high-income inequality, one of many drivers of wealth inequality[1].
Another factor influencing wealth inequality is regional differences. The industrialization of the economy and the resulting decrease in agricultural reliance created advantages for people living in certain parts of the country. The Northern parts of the United States offered many advantages for people living there as this was where most of the industrialization was concentrated. The opposite occurred in the Southern United States where worker productivity had been decreasing since the end of the Civil War and the international demand for cotton was diminishing. While those in the North enjoyed the benefits of industrialization, those in the South did not fair as well[2].
Racism is another major factor in the creation of wealth inequality that remains a major problem today. Although the Civil War ended slavery, it did not come close to ending racism. Black Americans still struggled to find economic opportunities in the face of immense discrimination. This lead to them taking lower-paying jobs that, like immigrants, put them in a position with limited upward economic mobility, entrenching them and their families in the lower class for generations[3].
Wealth inequality was also heavily impacted by the emergence of a new class of extremely wealthy individuals. Known first as “Robber Barons,” a number of successful businessmen capitalized on the industrialization of the United States during this period of time. Oftentimes employing exploitative tactics that bordered and crossed lines of morality, men like John D. Rockefeller, Andrew Cargenie, and Henry Ford accumulated vast fortunes that were beyond the comprehension of most of America[4][5].
With these factors in mind, we can begin to explore what wealth inequality looked like from 1880 to 1950 and analyze how people thought about it.
Works Cited:
- Lindert & Williamson 2016, 167
- Whaples & Parker 2013, 217-218
- Lindert & Williamson 2016, 168
- Martorelli 2012, 29
- Alzo 2010, 35