The Age When Capitalism Went Too Far

it's scary to think that in some ways the leaders of the largest corporations on the globe may hold more power than elected officials but luckily enough we have the powers of government regulation ways of stopping uncontrollable enterprise from taking total control of society I mean for the most part but as bad as it may seem today it used to be worse oh boy yesiree was it worse there was a time when the power of the United States was undoubtably in the hands of a select few businessman the robber barons the captains of industry called them what you like but they controlled everything this was a time of unprecedented growth and sure businesses had massive profits and power in years past but nothing like this why how when who don't worry Jimmy your boy Tyler's got you covered because today we're looking at the Gilded Age so in the latter half of the 1800s it was becoming quickly apparent that new technology would soon change everything the Second Industrial Revolution earlier in the century we saw some steamboats and we had some factories but this was something more but let's not get ahead of ourselves we'll be focusing on a select few titans of enterprise in this video rather than covering them all because yeah there's a lot so to get started we'll go back to a fine young fellow Cornelius Vanderbilt born on Staten Island New York us of a baby in 1794 as a young man he had access to one fine specimen of a fairy how he got it who knows some say he borrowed money some say his dad had it I really don't care what matters is he made a living with this fairy he took people from Staten Island all the way to Manhattan people called him the Commodore because he was on a boat and whatnot but that one boat soon turned into a fleet and that fleet soon turned into a really really big fleet by this point he's really wealthy he lent his ships to the military for the Civil War and all around was just a good old nautical fellow but he knew the future wasn't boats he saw something else the railroads they weren't entirely new but they were getting pretty popular and by the time the Transcontinental Railroad was built it was apparent that this was the next big industry the importance of rail transportation is lost on many people these days back then it was the only way to get across large distances in a modest timeframe just as important it allowed entrepreneurs to sell their products nationwide something that would otherwise be basically impossible as the products reach larger markets profits increase both for the producer and the guy who delivers it so yeah it's important he starts selling his boats all his boats puts the money into the rail industry and soon the Commodore begins to witness the benefits of unyielding economic power after all the more profits you have gives you the more power to regulate your own prices fairly or otherwise competition and customers are fed up with this pricing being pretty mean to them old Vanderbilt doesn't take kindly to this and literally stops all rail transport into and out of New York City just stops it the opposition loses value as stocks drop and old Vanderbilt is right there to buy them up creating the crisis that ruins the competition just to buy the competition just wonderful and all the while more railways are built just tons of railways all over the place possibly too many actually yes definitely too many not much potential remains in the rail building industry since over the past few decades enough seen to have been constructed so Vanderbilt wants a new revenue source if you can't build more railways what if he can find new cool things to put on those railways hmm intriguing what he finds is kerosene kerosene lets people just light lamps every night and gain the ability to see when it was previously dark it was booming and that popularity would soon take it from commodity to necessity and Vanderbilt wanted in so he gets a hold of an up-and-coming businessman john d rockefeller yeah we talked about him a long time ago on this channel but we're gonna do it again for just a bit context and what not Johnny agrees to stock Vanderbilt rail cars with lots of oil and Rockefeller follows through and starts building an empire of his own he buys other companies and his market share rise to 90% now he has the power he becomes too big for just Vanderbilt he goes to other rail Road magnates as well including Tom Scott he gets a bit of an ego and starts making what seems like to them unreasonable demands the railroad industry wasn't doing too hot at this point you know how I said there was too many railroads well they just kept building them just so many the whole industry was weak with overexposure and the companies weren't in their prime anymore they wanted some respect back so Scott and Vanderbilt just refused they thought he can't ship it without us why does this man think he deserves these rates if we don't ship it he can't make money he needs us but they were wrong Rockefeller just decided he would find a way to transport it himself not with trains but pipeline and if the pipeline couldn't reach a refinery and just shut it down better than giving the old train guys their day in the Sun now around this time things were going pretty bad for the railroads but you know who else wasn't having the best time the people working on the railroads and the refineries and the steel mills and well everything for that matter it was bad it was common to have 12 hour work days horrible pay life-threatening conditions and possibly only one day off a week all the while the leaders of such companies were experiencing wealth unprecedented in American history but it wasn't just America no it was everywhere but right now let's not look at everywhere let's look at Canada Canada had made unions illegal unions just fought for better rights and pay and stuff and workers would strike if demands weren't met well in 1872 Canada changes its mind and everybody's happy unions are legal people parade on the streets and every year they celebrate this with a Labour parade but I know what you're saying who cares let me talk Jimmy it's all gonna connect somehow but let's get back to America for now well all this fun comes to an end pretty quickly with the panic of 1873 it's the worst economic debacle America has seen so far a bunch of stuff caused and it's stuff that really doesn't matter so don't worry you just got to know that workers got to work more and make less now and railroads are just going bankrupt left and right an old Vanderbilt just buys em up use scoundrel you as you can tell it's not all fun and or games for some it's actually none of these things Tana Scott has to shut down some of the railroads lay some people off cut wages and people strike then militias are brought out to ease the tensions and it's just a bad time all around worse yet Thomas Scott dies soon after now you may be asking why are you talking about this Thomas Scott guy well it's because he's a mentor to a very special somebody a Scottish American named Andrew Carnegie during this full mentor thing he became fascinated with this new building material steel so strong it was unlike anything before it we could build further taller and everything in between he moves away from his railroad roots and starts making steel mills lots of them as he takes control the fledgling industry new possibilities open up people were moving into cities at an increasing rate they needed jobs they needed homes and what they found wasn't quite doing it for them so Carnegie Steel started being used in buildings tall buildings the first really tall buildings that we would call skyscrapers but at the same time those steel workers were going through the wringer it wasn't uncommon for workers to just die safety wasn't the biggest concern I mean it's a 19th century steel mill I think it speaks for itself so as you can imagine demand for unions was steadily increasing amongst workers remember those Canadians and their parade they invite some american union leader over and be a part of the grand old time he likes it he comes back and he says hey we should have a holiday a holiday about Labor yeah that's that's Labor Day it catches on overtime people across the country start doing it and eventually some states actually recognize the holiday that's some states at least back to Carnegie though he's a businessman yes but not ruthless he doesn't like crushing people beneath his foot for profit so he hires somebody else to do it Henry Frick to increase these profits he makes workers lives pretty bad buys out other companies and overall just monopolizes the steel market to the workers perspective he's a really bad dude but he gets the job done soon he's chairman of Carnegie steel and all seems pretty a ok well except for the workers it was just getting worse but who cares Frick is doing freaking amazing and he wants to show off a bit he builds a pompous members club called Southfork hunting and fishing Club for all his rich friends with this he gains the responsibility of managing a big dam that held in a nearby lake now that dam wasn't great and it also was the only thing protecting a local town from certain devastation they asked Frick to fix it up and he was just like nah being the amazing culmination of human evolution that he was Frick decided to weaken the dam to make it easier to cross guess what it broke in over 2,000 people died he and the other Club members weren't charged with any crimes but laws would be changed to convict future peoples of this incredibly stupid negligence Carnegie was also a member of the club and he proudly felt pretty bad because right after he wrote a pretty compassionate work the gospel of wealth in this he basically says rich people should give back to the communities and enrich the lives of the public instead of hoarding it in their scrooge mcduck mansions this was appalling to other captains of industry see they relied on a different philosophy social Darwinism now this concept is basically survival of the fittest but in an economic sense any business transaction that benefits you is always the right move no matter the cost while the workers weren't fit enough to be in your position so they should just sit at the bottom of the totem pole yeah it's it's not the best step back to Frick did this whole town flooding thing change him at all not really even still after thousands of people died due to friction sand his public image isn't the best right now he still decides it's a good idea to cut cost and boost profits and Carnegie just kind of goes along with it after all he doesn't want to ruin his reputation just make a bit more money but it's not all whoop-dee-doo fun times for our Gilded Age businessman you see we're going into untested waters a new era the Progressive Era amongst other things reform was pretty in workers were done waiting and the government tried to hell kind of see laws would be passed and just never followed through if it was going to hurt a massive monopoly might as well forget about those laws guess who's paying those congressmen and the government yes those captains of industry they basically did own the country you got the Interstate Commerce Act of 1887 it tried to stop some anti-competitive pricing on railways sure it's not solving everything but it's a start what's a bigger deal by far is the Sherman Antitrust Act of 1890 makes monopolies illegal so yeah all the big guys all the unstoppable forces are now just yielding to government regulation right no and don't lie you already knew the answer was no the law was in place but nobody decides to pick a fight with Rockefeller Standard Oil and the other big guys I mean how will you get your bribes done so that workers condition was still pretty bad unionized workers found out one day that Carnegie steel would no longer deal with the Union in response they obviously strike and Frick calls in a mercenary group the Pinkertons a powerhouse with lots of guns and lots of Pinkertons nobody really expects fighting to go down just a show a threat but that's not how it goes down fighting breaks out and there's multiple deaths on both sides not a great public image for either at this point and it only gets worse when some anarchist decides to try and kill Frick and fails by this point other business leaders see unions as a massive threat and the whole movement goes back a couple years after this whole debacle Carnegie is not happy about this he just fires Frick probably a good move but now Carnegie is back to managing the complicated steel enterprise he made he's weary and tired and just kind of done as for the workers they do catch a bit of a break up in Washington President Cleveland had been catching some flak for sending militia to some other random strike and the public wasn't at all too happy to reconcile his public perception he needed a pro worker move so he took that old Labor Day idea and made it a national holiday also in Washington the next presidential election is on the horizon but a candidate William Jennings Bryan seems set on some anti-monopoly policies we can't have that now can we so in the upcoming election the kings of business need to ensure that they can get somebody in office who is on their side Rockefeller Carnegie and somebody we haven't talked about yet JP Morgan all go in on basically buying the next US president through bribes and paying for marketing they ensure that it's old President McKinley who's next in line they told people that if McKinley lost they would probably just lose their jobs that alone was enough to get a lot of people on his side yeah McKinley wins big surprise but let's go back to that mysterious JP Morgan a banker and art collector a really rich dude but he wanted more so much more you see Carnegie steel was the biggest player in town but more steel mills were popping up all the time Morgan thought it would be cool to get all of them including Carnegie steel he asks the aging Carnegie who says yes for a price a really really big price like enough that Carnegie is worth over three hundred billion dollars after the deal that's in today's money he's now the richest man in the world richer than even rockefeller still selling his lamp juice from this JP Morgan forms US Steel far bigger than Carnegie's already massive corporation but things were not all well in the capitalist world a new political enemy was rising I know I talked about this a while ago but again just stick with me Teddy Roosevelt he fights big business and breaks the Trust's he's going to go after the big guys here soon and his popularity is skyrocketing in anticipation they convinced McKinley to make him vice president during the next election why well vice presidents really don't do anything and people just kind of forgot about them it seemed like the easiest way to get him out of the picture and give him no real power McKinley's re-elected all as well until it's not he's assassinated by a recently fired steel worker an anarchist guess who's in charge now yeah the big titans of industry just set up their own demise Teddy Roosevelt goes in big and start suing many monopolies breaking them up and actually abiding to the Sherman Antitrust Act it's only a matter of time before the biggest monopolies is taken down yeah its Standard Oil in 1911 the US it splits it ended dozens of companies not a bad deal for Rockefeller though since he gets shares in each new company and even better oil slowly becomes the predominant way to fuel people's cars gasoline he ends up really really rich from all this like six hundred billion dollars in today's terms rich but what about Morgan he was hit with one lawsuit for a railroad monopoly but US Steel remains while his steel is huge for the US infrastructure and he's been a big help to the government getting out of jams in the past so they just let him be but in 1913 Morgan dies the era of these captains of industry is truly coming to an end the Progressive Era seems to have completely eradicated the old ways of the Gilded Age by this point Rockefeller and Carnegie are far more focused on image and legacy rather than sheer profit I mean they already have all the money they could ever won so they go back to that old Gospel of wealth mentality donating as much as they can by the end of his life Carnegie gave over 60 billion dollars in today's money to charities libraries and other public causes in Rockefeller he gave a hundred billion by the end of the Progressive Era tags were certainly different than the early years of Carnegie and Rockefeller new labor laws had set in place on better standards to factories such as that as Henry Ford were paying substantially more the middle class arises and in a way consumerism makes it so paying workers can be beneficial to companies but it's not over yet over the next few decades more laws would create better working conditions and limit anti-consumer moves by the industry leaders some of these are the 1914 Clayton Antitrust Act which bought anti competitive pricing also the same year the Federal Trade Commission has stopped misleading marketing to protect consumer interests 1936 robinson-patman Act puts a minimum price for specific goods as to protect local businesses from massive chains in 1938 we see the Fair Labor Standards Act giving us the 40-hour workweek and minimum wage there's something almost romantic about the notion of a completely free get a world without regulation unhindered companies that can produce obscene profits but the reality of this world existed before and once technology caught up it's true faults were unveiled but it's fun to look back now isn't it this is Tyler of knowledge habit [Music]

Channel: KnowledgeHub

Views: 1,966,335

Rating: 4.7621169 out of 5

Keywords: The Age When Capitalism Went Too Far, Gilded Age, Capitalism, 1%, Capitalism goes too far, knowledgehub capitalism, men who built america, industrial age, labor day, AlternateHistoryHub communism, AlternateHistoryHub capitalism, industrial revolution worker conditions, money, rockefeller wealth, knowledgehub the age when capitalism went too far, rise of unions, progressive age, teddy and monopolies, monopolies, captains of industry, knowledgehub industry

Id: b6l6Ck4TKxo

Length: 18min 2sec (1082 seconds)

Published: Sat Sep 08 2018

Reddit Comments

[u/yetisyny]

At least the super-wealthy aren’t acting like Gilded Age robber barons anymore. Now things are even worse, now they have put one of their own in the White House, a particularly mentally unstable sociopathic one.

[u/endgame00]

Just imagine

[u/Molt1ng]

You mean 5 years from now?

[u/Jasper1984]

Quite possible 19th century was worse than the 20th on this issue, but blasting through it like that makes the 20th look a lot better than it was..