CONTROVERSIES Over the Role of GOVERNMENT in the Gilded Age [APUSH Review 6.12] Period 6: 1865-1898
Summary
TLDRIn this video from Heimler's History, the focus is on the controversies surrounding the role of government during the Gilded Age in the United States. The debate over government intervention in the economy has historical roots, dating back to disagreements between Alexander Hamilton and Thomas Jefferson. The video discusses the laissez-faire economic ideology, which was dominant during this period and advocated for minimal government interference in the economy. Despite this ideology, industrialists and politicians often called for government action when it was beneficial for business expansion, such as in the cases of the Hawaiian monarchy's overthrow and the Open Door Policy with China. However, meaningful government regulation of business was largely absent, even in times of economic crisis, as illustrated by President Grover Cleveland's inaction during the Panic of 1893 and the limited power of the Interstate Commerce Commission. The video concludes by noting the selective nature of government involvement in business affairs during the Gilded Age.
Takeaways
- 🏭 The rise of industry in America during the Gilded Age significantly changed the production of goods, city demographics, and class structures.
- 🇺🇸 The debate over the role of government in the economy dates back to the founding of the United States, with early disagreements between figures like Alexander Hamilton and Thomas Jefferson.
- 💼 Laissez-faire economics, rooted in Adam Smith's 'The Wealth of Nations,' was the dominant ideology, advocating for minimal government intervention in the economy.
- 📉 Despite the ideology, Gilded Age industrialists and politicians often acted contrary to the principles of competition that Smith advocated for a healthy economy.
- 🔍 The government was largely hands-off during economic downturns, such as the Panic of 1893, with President Grover Cleveland taking a passive approach.
- 🛠️ The Interstate Commerce Commission (ICC) was established to regulate railroads, but it was underfunded and lacked real power to enforce regulations.
- 🌎 The government did intervene in business when it saw potential for economic gain, such as through overseas market expansion and diplomacy.
- 👑 Laissez-faire capitalists supported the overthrow of the Hawaiian monarchy, which later facilitated the U.S. annexation and opening of new markets.
- 🚪 The Open Door Policy with China in 1899-1900 was an example of the U.S. government promoting equal trading rights, countering European dominance in Chinese ports.
- ❌ The Gilded Age was characterized by minimal meaningful government involvement in regulating business practices.
- 📚 The video script is part of a series discussing Unit 6 of the AP U.S. History curriculum, focusing on the controversies over government's role during the Gilded Age.
Q & A
What was the main debate during the Gilded Age regarding the role of government?
-The main debate during the Gilded Age was about the role government should take in relation to the changing realities of industrialization, such as the production of goods, city demographics, and class structures.
What is the historical context of the debate on the role of the federal government in the economy?
-The debate on the role of the federal government in the economy dates back to the founding of the United States, with key figures like Alexander Hamilton and Thomas Jefferson disagreeing on issues such as the National Bank.
What economic ideology was dominant during the Gilded Age?
-Laissez-faire economics was the dominant economic ideology during the Gilded Age, advocating for minimal government intervention in the economy.
Who is Adam Smith and what is his contribution to economic thought?
-Adam Smith was an economist who published 'The Wealth of Nations' in 1776. He argued that economies are best governed by the laws of supply and demand and that the 'invisible hand' of the market would lead to the flourishing of society if left to operate freely.
How did the industrialists and politicians of the Gilded Age misinterpret Adam Smith's economic theories?
-While advocating for laissez-faire economics, the industrialists and politicians of the Gilded Age consolidated power in their industries, reducing competition, which was an essential element of a healthy economy according to Smith's theories.
What was the stance of President Grover Cleveland during the Panic of 1893?
-President Grover Cleveland largely did nothing to alleviate the economic disaster during the Panic of 1893, adhering to the laissez-faire approach of non-intervention by the government.
What was the Interstate Commerce Commission (ICC) and why was it created?
-The Interstate Commerce Commission (ICC) was a federal agency created in response to a Supreme Court decision in 1886 that prevented states from regulating railroads. The ICC was intended to ensure compliance with this law, but it was underfunded and lacked real power.
When did the U.S. government get involved in business during the Gilded Age?
-The U.S. government got involved in business during the Gilded Age when it saw potential for economic gains, such as through diplomacy to expand markets overseas, as seen with the overthrow of the Hawaiian monarchy and the Open Door Policy with China.
What was the Open Door Policy between China and the United States?
-The Open Door Policy, established in 1899-1900, was an agreement that advocated for equal trading rights in all the ports in China, which were being dominated by European powers at the time.
Why did the government's involvement in business during the Gilded Age often lack meaningful regulation?
-The government's involvement often lacked meaningful regulation because the dominant laissez-faire ideology favored minimal government intervention in the economy, except when it could lead to clear economic benefits.
What was the presenter's suggestion for students who want to excel in their AP U.S. History class?
-The presenter suggested that students who want to excel might consider using his Ultimate Review Packet and encouraged them to subscribe for more content.
Outlines
😀 Introduction to Gilded Age Government Controversies
The video begins by welcoming viewers back to Heimler's History and introducing the topic of government's role during the Gilded Age. It highlights the rise of industry and how it changed American society, leading to fierce debates over the government's role. The video sets the stage for discussing both sides of the debate - those arguing for and against government intervention in business. It also touches on the historical context of this debate, dating back to the founding of the country and key figures like Alexander Hamilton and Thomas Jefferson.
Mindmap
Keywords
💡Gilded Age
💡Laissez-faire economics
💡Adam Smith
💡Industrialists
💡Government intervention
💡Unfair labor practices
💡Wealth gap
💡Panic of 1893
💡Interstate Commerce Commission (ICC)
💡Open Door Policy
💡Diplomacy
Highlights
Introduction to the controversies over the role of government during the Gilded Age.
Discussion on the rise of industry in America and its impact on production, cities, and class structure.
Historical context of the debate on government's role in the economy, dating back to the founding of the U.S.
Mention of the debate between Alexander Hamilton and Thomas Jefferson regarding the National Bank.
Argument over Henry Clay’s American System and government-sponsored infrastructure improvements.
Examples of realities that argued for government intervention, such as unfair labor practices and wealth disparity.
Focus on arguments against government regulation, contrasting with previous discussions.
Explanation of laissez-faire economics and its influence on the dominant economic ideology of the Gilded Age.
Origin of laissez-faire economics in Adam Smith's 'The Wealth of Nations' and the concept of the 'invisible hand'.
Critique of Gilded Age industrialists and politicians for misapplying Smith's economic principles.
President Grover Cleveland's lack of action during the Panic of 1893 as an example of government non-intervention.
The creation of the Interstate Commerce Commission (ICC) and its limited power due to underfunding.
Contrast between laissez-faire practices and government involvement in expanding markets overseas.
Support for the overthrow of the Hawaiian monarchy and the U.S. annexation for new markets.
Open Door Policy between China and the U.S. as a means to secure equal trading rights.
Government's selective involvement in business based on potential economic gains.
Lack of meaningful government intervention in regulating business during the Gilded Age.
Promotion of the Ultimate Review Packet for AP U.S. History exam preparation.
Encouragement for viewers to subscribe for more educational content.
Transcripts
Well hey there and welcome back to Heimler’s History. So we’ve been going through Unit 6
of the AP U.S. History curriculum and in this video it’s time to talk about the
controversies over the role of government during the Gilded Age, and that means it’s
about to get saucy. So if you’re ready to get them brain cows milked, then let's get to it.
So all through this unit we’ve been talking about the rise of industry in America and
how that changed the production of goods and the demographics of cities and the structure
of classes. Long story short, the rise of industry was a big deal during the Gilded
Age. And one of the most pointed and fierce debates that occurred in this time was with
respect to the role government should take in relationship to all these changing realities.
And the truth is, this debate about the role of the federal government in the economy is
one that stretches back to the founding of the country. That was one of the main
fights between Alexander Hamilton and Thomas Jefferson with respect to the National Bank. It
reared its head again when debates over Henry Clay’s American System erupted in Congress,
and they argued fiercely about whether the government ought to sponsor infrastructure
improvements like roads and canals. And I could name many other examples, but the point is,
controversies over the role of government in the economy is not a new thing in this period.
So in the last few videos I’ve mentioned a lot of realities that argued FOR government
intervention in business, things like unfair labor practices and the growing gap between
the rich and the poor. So in this video I’m going to focus on the other side of the debate,
namely, the arguments that were being made against government regulation.
So in order to get into this, let’s remind ourselves about the dominant economic ideology
during this period, namely, laissez-faire economics. Now laissez-faire is French for
“leave alone,” or “let alone,” or whatever, some French speaker always corrects me in the comments.
[Call Matt, what does laissez faire mean?] Anyway this way of understanding economics is this:
just leave everything alone and eventually all shall be well.
Now the industrialists and the politicians who supported them didn’t make up this way
of thinking. It actually goes back to 1776 when Adam Smith published The Wealth of Nations. His
argument was that economies are best governed by the laws of supply and demand, and that if you
just let people make decisions in their own best interest then the invisible hand of the market
will always flourish best under those conditions and therefore lead to the flourishing of society.
Now the problem is that while Gilded Age politicians and tycoons were spouting off
about Adam Smith and the invisible hand, they apparently forgot that the scenario
they created was nothing like what Adam Smith envisioned. One vital ingredient for a healthy
economy in Smith’s view is competition, but these business leaders had so consolidated
power in their respective industries that competition vanished like a fart in the wind.
But that didn’t keep these folks from arguing against government regulation in business or
the economy as a whole. And that was true even during economic downturns. During the
severe Panic of 1893 President Grover Cleveland largely did nothing to alleviate the economic
disaster for many Americans who ended up standing in bread lines to feed themselves.
And even when the federal government did get involved, they did so half-heartedly. For example,
in 1886 the Supreme Court handed down a decision in a case whose name you
don’t really need to know, but the decision basically said that states couldn’t regulate
railroads. And so the government created a federal agency called the Interstate
Commerce Commission to ensure that states didn’t violate this law. But the ICC was
deeply underfunded and therefore had no real power to meddle in states’ affairs.
So all that to say, laissez faire was the rule of the game during the Gilded Age,
both for enterprise and for politics. However, the government
DID get involved when gains for business and the economy could be made. For example,
business leaders worked with Republican politicians to expand markets overseas by
means of diplomacy. Now this will come into focus very clearly at the start of the next period,
so here I’ll just mention a couple of examples of how this played out.
First, laissez-faire capitalists strongly supported the overthrow of the Hawaiian
monarchy in 1893. Eventually that would lead to the U.S. annexing the islands in 1898 and that
meant new markets were opened. Second, was the Open Door Policy established between China and
the United States in 1899-1900. Essentially it just advocated for equal trading rights
in all the ports in China which were being rapidly consumed by European powers. Again,
we’ll get way more into that in the next period, but for now,
you just need to understand that during the Gilded Age the government DID get involved
in business when the outcome looked to be good economically for them. However, the government
almost never got involved in any meaningful way when it came to regulating business.
OKay, that’s what you need to know about Unit 6 Topic 12 of the AP US History Curriculum.
If you need help getting an A in your class and a five on your exam in May,
then you might want to click here and let the invisible hand guide you towards
my Ultimate Review Packet. If you want me to keep making these videos for you,
then the way you can let me know that is by subscribing, and I shall oblige. Heimler out.
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