Titans of Industry [Carnegie, Rockefeller, and Labor Unions]

Hi, everybody, and welcome

back to Heimler's History.

In the last few lectures,

we've been talking about the Gilded Age.

And when I think of the Gilded Age,

I think of a golden-covered turd.

And here's what I mean.

There was a lot of prosperity to be had

during this time,

but under that thin layer of prosperity,

there was the larger reality of,

you know, the turd.

And in order to understand this age,

we've got to talk about

both the gold and the turd.

Okay, this is getting out of hand.

I've said turd three times.

That's four.

Oh.

Let's get started.

(It's time to kick it old school).

[MUSIC]

Okay, let's begin with the gold.

Near the end of the 19th century,

people began asking, "Why are

the best men not in politics?"

And do you know why?

It's because all of those industrious men

were off making metric

buttloads of hoo-hoo.

[MUSIC]

All right, let me introduce you to two

of these guys: Andrew Carnegie and John D.

Rockefeller.

Carnegie was a charming pint-sized

Scotsman, and he was the king

of the steel industry.

He was an industrial genius,

and he pioneered a very profitable

entrepreneurial tactic

called vertical integration.

It meant that every part

of the steel-making process passed

through his company's hands.

From mining the ore,

to shipping it to the factory,

to the smelting process,

every hand that touched Carnegie Steel

was employed by Carnegie.

And what does that mean?

More money.

[MUSIC]

But while Carnegie loved making money,

and he was very good at it,

he wasn't the cutthroat like John D.

Rockefeller was.

In fact, Carnegie believed that all

the money that he had earned was something

like a public trust, and that he was

to use that money for the public good.

This idea is what Carnegie called

the "Gospel of Wealth,"

and basically he scurried around to try

to find as many public places that he

could invest his money into as he could,

places like libraries and concert halls.

And all told, he found a home

for about 350 million of his dollars.

Now, I'm not saying there was no turd under

the hood here, but Carnegie's was

about the cleanest gold around.

So, then let's talk about turds.

Say hello to John D.

Rockefeller.

Now I'm not saying old

Rockefeller himself was a turd.

Everything he did was quite legal.

But you did have to watch where you

stepped when you were around him because

you never knew what might end

up on the bottom of your shoe.

So, Rockefeller was the king of the oil

industry, and he wasn't at all concerned

about the bite of his

scruples like Carnegie was.

Whereas Carnegie mastered vertical

integration, which could at least be

justified on the grounds of controlling

the quality of the product from the mining

to construction,

Rockefeller mastered what was called

"horizontal integration,"

which essentially meant that Rockefeller

threw his corporate weight around until he

gobbled up all his competitors and was

essentially the only one selling oil.

Now, the technical term for this is

a monopoly, or more to the point, a trust.

And in America we don't like this kind

of thing because in a market economy,

competition is essential to keep prices

low and serve the customers well.

And one of Rockefeller's favorite

sayings was, "Let us prey."

That's prey with an 'E,' not with an 'A.'

And he reasoned that if all the other oil

companies were weak enough to be eaten

by him, then they deserved to be eaten.

Later this became known as

a phenomenon called "Social Darwinism."

Essentially Charles Darwin said,

when it comes to species,

that the strong eat the weak,

and only the fittest survive.

And as the clamor rose against Rockefeller

and his business practices,

he responded essentially by saying, "Look,

my wealth and my power

prove that I am the fittest.

I am the strongest.

And if other people have to live

in poverty and squalor, well,

that just proves that they are

the weakest and deserve to be eaten."

And by the way, as far as it goes,

that's a pretty good argument.

If the laws of nature are read in tooth

and claw, then why shouldn't the laws of

everything else be read in tooth and claw?

To me, given the truth of the premise,

I would accept the conclusion.

Now, I don't accept the truth

of the premise, but I think

Rockefeller had a good point.

If Darwinian thought is the way the world

works, then why not apply

those principles to business?

Now, in the age in which we live, where we

just accept government intervention

on business practices,

it's hard for us to imagine just how

hands-off the government was

towards businesses back then.

It was like laissez-faire gone wild.

Now the conditions of the workers

whom Rockefeller sacrificed in order

to get to the top were pretty awful.

Consider that these folks were working

a minimum of 10-hour shifts, six days

a week, and a sizeable portion worked 12

to 14-hour shifts, which is to say

many workers ate breakfast, lunch,

and dinner at the factory

and returned home only to sleep.

But the reward of such long hours was

extremely low wages and constant danger

from unsafe machines

and squalid working conditions.

So, you know, worth it.

Now, as it happened,

those millions and millions of workers

who, by their poverty,

proved that they were only fit to be

trampled upon by people like Rockefeller

suddenly woke up and started organizing

and demanding their

rights and their dignity.

And the way they fought back

was by creating labor unions.

You see, an individual laborer couldn't do

anything about his lot in life,

but when you join that one to another,

and then thousands of others,

all of a sudden they have a voice.

One of the most significant labor unions

was known as the "Knights of Labor,"

and probably one of their most significant

achievements was to agitate through

a series of strikes for an eight-hour

workday, and in many cases, they won.

But as it turns out,

the Knights of Labor were dealt a death

blow in an affair that came to be

known as the Haymarket Square Riot.

So, in May of 1886,

the Knights had scheduled a public protest

in Chicago. And long story short,

a radical anarchist threw a bomb

into the midst of the gathering and killed

or injured a dozen people,

including police officers.

Now as far as we know,

the Knights had nothing to do with this

bomb, but that didn't stop a lot

of the newspapers from blaming it on them.

And at that point,

the Knights of Labor quickly faded.

And in place of the Knights of Labor,

other labor unions grew up,

like the American Federation of Labor,

and in many cases, they took up the same

causes that the Knights had taken up.

All told, by 1900 there were upwards

of 23,000 labor strikes across America.

The strikers won about half of their

contests and lost about half,

but it was serious progress in their eyes.

The eight-hour workday was established,

wages increased, and safety regulations

for factories were slowly implemented.

And as a sign that things were changing,

in 1894 Congress established Labor Day,

which was a symbol of the

workers' right to rest.

Now, a lot of people want to argue about

the practices of business owners

like Rockefeller and Carnegie.

Some people want to call them captains

of industry because they worked very hard,

rose from nothing, established businesses,

and became a symbol of the American dream

in which anyone could get anywhere they

wanted to provided they

worked hard enough.

Other people want to call them robber

barons because they only cared about

amassing wealth and they cared nothing

about the people whose backs they

trampled upon in order to get that wealth.

But whichever way you see it,

you have to understand

that the coming-of-age of American

industry was one of the most

convulsive changes in American history.

This nation began just like

Thomas Jefferson dreamed,

as a nation of farmers,

but during the Gilded Age we became

a nation of capitalists and city-dwellers

and factory workers, and it was just going

to take us a few years to figure

out how to stand on these new legs.

So, that's all for now.

I'll see you next time.