Recessions have plagued America for the last forty years because of reckless behavior by the rich. In the latest recession major corporations swindled innocents out of billions of dollars with faulty stocks, derivatives, and sub-prime loans they knew were going to fail. After the economy failed these men were generally unaffected, still receiving million dollar bonuses despite the economic distress of the rest of the population. These men are plutocrats, the ruling class in America.
These financial titans still remain largely unrecognized despite the fact they have been ruling the United States, a plutocracy where governmental policy is determined by those with the most money, since the Gilded Age. it is during that time period that the plutocrats first rose to power. The laissez-faire mindset ruled the American economy in the late nineteenth century, launching massive industrial expansions and technological revolutions; this formed largely unregulated industries with purely capitalistic purposes that dominated the industrial, financial, and political spheres of America and made the country a plutocracy.
Laissez-faire conducted economic activity in America during the late 1800’s. The first factories in America were rare, but they created colossal quantities of goods at cheap costs. Audacious entrepreneurs and sage investors recognized that factories had greatest potential for mass profits, but they also knew any level of government regulations would hurt their incomes. Government inspectors would prevent installation of innovative technologies that would increase outputs but endanger workers.
To protect their interests and investments the upper class pushed for deregulation of industry throughout the Gilded Age, both though legal and illegal methods. The presidents of this era are often referred to as the “do-nothing presidents” because they did not create any major changes. The first roots of plutocracy arose here during this inaction. Unwritten agreements were made by politicians and these emerging industrial leaders.
Those industrial leaders who funded politician’s campaigns, to get them into office, would be favored by these politicians once they were in office, instead of these politicians exclusively looking out for the Americans who voted them into office and who they are supposed to represent. As time wore on plutocracy continually eroded democracy in the American government, with each passing election allegiances of numerous politicians switched from their people to their sponsors. Laissez-faire served as a front for big business and plutocracy to expand rapidly in America. Meanwhile the common man was learning that he did not like this new system of government, despite the fact he did not yet know it exists.
As the corporate leaders became millionaires, people across America suffered and were regularly injured in the factories. Industrial giants greatly profited from the lack of regulations, expanding industry in America to rival that of the European superpowers like Britain, France, and Germany. In order to maintain high volumes of production safety standards were removed.
The Jungle, by Upton Sinclair, was a novel written in the Gilded Age which muckraked conditions of meatpacking factories in Chicago and exemplifies the best and the worst of industry in America. The factories had terrible working conditions, in one meatpacking factory, “the place ran with streaming hot blood – one waded in it on the floor. The stench was almost overpowering,” (53-54). Workers fared poorly in the factories, there are numerous incidents in the book where workers die, one was, “killed in an elevator accident,” (83). Another man was killed when a, “wounded steer had broken loose and mashed him against a pillar,” (85). These industrial accidents came from the unmonitored technologies that were used in the factories, which were deliberately made unsafe so they could produce goods at a faster rate.
Dangerous tools and equipment were used in every factory in the country; they produced more goods but at the expense of worker safety. The industrial leaders uniformly decided to pick profits over people, laissez-faire allowed them to do this with the blessing of the government they virtually own and the curse of the people they were injuring in the name of a better profit margin.
Outside of work the labors fared little better, they had no capital because they were financially cheated by the factory owners. Immigrants coming to America could no longer stake a claim on the plains; the land had been almost entirely bought up by settlers or railroad companies. Their only viable options where they could move to were the cities, where they could get a job in a factory.
Even in the cities work was scarce; for each worker position there were dozens of desperate immigrants vying for it. The factory owners could pay their employees virtually nothing and the immigrants would gladly work anyway, the alternative was starving to death. All the immigrants could do was grumble and call the industrial leaders names, like robber barons. Workers lived in poverty, in addition to working in inhumane conditions, because the alternative was to starve. The workers were financially dependent to the company, but the company did not care at all about them; unions began to emerge to combat this problem.
In response to encroachments on basic human rights and liberties unions slowly emerged, despite violent rebuffs by the robber barons. Union members only wanted decent pay and a safe working environment; this would not have been a problem but it would have been at the expense of the robber barons. Every modest request was denied by the company owners. As unions became even more and more desperate they resorted to strikes to improve their jobs and wages. Sometimes the unions won, most of the time they lost because the corporations had far greater assets. During the Great Strike of 1877 the strikers were able to shut down nearly all railroad traffic across the US. In response President Rutherford B. Hayes, at the request of notable railroad owners, called out federal troops to successfully quell the strike. In this display of force plutocracy revealed itself to be the ruling force in the country. Democracy had given way to plutocracy, no longer were the concerns of the many were the center of focus for the government, now only those with money were valued. The worst tragedy of this coup was the common people were misled into believing the plutocrats were heroes.
The public adored the robber barons, despite the grievous toll they were extracting on the common man, because of unfortunate striking incidents and well placed charitable donations. Union leaders continued to press forward with strikes, hoping they would gain enough leverage to force the corporations to bow to their demands. They suffered numerous setbacks, notably during the Haymarket affair strikers were blamed for a bomb that killed seven police officers. Public opinion swiftly turned against the strikers; nobody wanted to support anarchy. The industrial leaders amplified this outrage using their newspapers to spread the word of the attack.
Weakened by violent incidents, the unions resorted to discrediting the robber barons, criticizing their unethical habit of hording money while their own workers starved. In response millionaires donated absurd amounts of money to various charities; for example, John D Rockefeller donated $55 million dollars over his lifetime, enough money to build hundreds of buildings, construct numerous foundations, and buy him a pristine public image that no scandal could tarnish. Instead of demanding his arrest people everywhere believed the man was virtually a saint and had the right to be rich. Social Darwinism, a belief that in a laissez-faire economy the fittest businessmen are the ones who thrive, was created to explain why Rockefeller and men like him had succeeded where countless other people had failed.
The powers of the union receded, except for isolated victories they were held at bay by the robber barons. Little progress was made to benefit the workers. The labors were forced to work dangerous jobs or suffer with unemployment. Robber barons ruled America, hoarding money while their political puppets did their bidding to get them even more money; the Age of Plutocracy had begun.
Today America is a plutocracy. Elected officials win modern elections primarily because they spend more money than their opponents. As the middle class collapses, and more and more Americans fall in poverty the plutocrats continue to demand deregulation of key America commerce sectors, such as meatpacking industry or the stock market; without regulations these industries will continue to endanger the health and stability of America. Laissez-faire is alive and well, recklessness allowed by this guiding principle is responsible for the last four recessions. The only threat left to the plutocracy is itself; should the recessions of increasing magnitudes continue, due to plutocrats insatiable greed, there will come a day when the common men as one to no longer be play things of the plutocrats. They will call the fallout of this uprising the Second Civil War, and it will be a hundred times more costly than the first.