Culture and Politics

Culture and Politics

Business leaders utilized new ideas from the field of science to study methods of production, as well as develop new technologies. Many began to liken the cutthroat competition of the business world to that of the natural world, a doctrine known as social DarwinismInspired by a loose interpretation of Darwin’s theory of evolution, social Darwinism proposes the theory that the human advancement will be facilitated if those who are not able to effectively compete in society are not artificially assisted, therefore becoming less likely to pass on their inferior traits.. Charles Darwin’s Origin of Species posited that animals, which were better adapted to their environment, were more likely to survive. More importantly, he argued that nature assigned new traits to animals such as longer legs or thicker fur. If these traits aided their survival, Darwin argued, a process of natural selection occurred in which the animals with these traits would thrive while others would perish. Before long, advocates of all kinds of social theories used Darwin’s ideas about animals to justify their preconceived ideas about race, ethnicity, and even the business world.

Although many business leaders (and most defenders of white supremacy) likely never read Darwin’s books, they adopted slogans such as “natural selection” and “survival of the fittest” to sanitize their elimination of rivals as “natural.” Darwin might not agree that the creation of trusts and the often devious methods business leaders employed to eliminate rivals fit his definition of natural selection. He would especially take exception to the bribes and other methods that corporations used to gain government contracts over their rivals—a process that actually reduced competition. If anything, the creation of trusts and other methods designed to reduce competition actually thwarted the evolution of more efficient business methods. At the same time, the emergence of larger corporations that could take advantage of economies of scale fit Darwinian concepts of evolution within the business world. By consuming their less-efficient rivals, those corporations with superior traits were more likely to survive.

Late in his life, Carnegie sought to mitigate some of the problems inherent in this kind of hypercompetitive business mind-set. Carnegie published The Gospel of Wealth in 1889, espousing the idea that the wealthy industrialist had an obligation to care for the less fortunate, including his own workforce. Veterans of Carnegie’s business empire responded to their aging employer’s book with mixed reactions. Some believed that the steel magnate had provided thousands of well-paying jobs and praised Carnegie’s generosity in endowing libraries and charitable projects later in his life. Others argued that Carnegie had been a tyrannical businessman who still accepted many of the evolutionary tenets of social Darwinism. At best he had become paternalistic, they argued, assuming that the wealthy possessed superior intellect and vision, which obligated them to provide for those who were less endowed.

Financiers such as J. Pierpont MorganThe leading financier of the late nineteenth and early twentieth century, J. P. Morgan helped to finance the consolidation of industry and personally negotiated the creation of leading corporations such as General Electric and US Steel. agreed, although Morgan believed the greatest contribution he could make was by ensuring stability in a financial system he and his banking associates increasingly controlled. Morgan, like most of the nation’s wealthy men of the 1870s and 1880s, had avoided service during the Civil War by hiring a substitute to serve in his place after being drafted. He then negotiated a lucrative deal during the war, purchasing and reselling obsolete rifles for a tidy profit. By the 1890s, Morgan controlled the finances of four of the nation’s six largest railroads. Morgan would also finance the purchase of Carnegie’s US Steel, issuing stock to the public at a price significantly higher than the company was worth. At the same time, Morgan demonstrated that the wealthy people could serve the public interest and their own interests at the same time. Morgan used his influence to calm investors during various financial crises, often using his own money to back a system in danger of collapse.

Figure 2.22

An image celebrating the commercial might of the United States marching across the ocean and challenging the “divine right” of European monarchs. J. P. Morgan personifies the triumph of American industry and Capitalism with its cornucopia of railroads, telegraph lines, steamships, and factories. The image plays on the contemporary notion that Europe was still dominated by feudal lords.

Despite the fact that bankers such as J. P. Morgan at times controlled more gold than the federal government, corporations recognized that their fortunes remained dependent on the favorable operation of the political system. The government controlled laws and regulations regarding trade and finance, as well as the money supply itself. In addition, business leaders also recognized the importance of winning government contracts. The vast majority of these contracts, as well as laws and regulations governing corporate behavior, were controlled by state and local governments. These elected officials were notorious for expecting political contributions and exchanging financial support for favorable legislation. Urban politics operated within the patronage system, a label referring to the expectation that government jobs and contracts would be awarded to those who contributed the most to the political party in power. This same tendency was sometimes called the “spoils system.” This label was an abbreviated form of the phrase “to the victor go the spoils.” Under such a system, a victorious mayor would be expected to reward government jobs and contracts, “the spoils of office,” to those who had contributed the most to his campaign.