Published on
The Globe and Mail/Canada

Remember the Gilded Age: A Progressive Morality Play

David Bercuson

History never truly repeats itself, but there are stunning parallels between the socio-economic and political history of the United States in the last decade of the 19th century and the past two decades.

In the United States, the end of the 19th century was known as the Gilded Age. In the era before income taxes, the welfare state and government regulation, powerful men such as banker J. P. Morgan, mining magnate Meyer Guggenheim, Standard Oil billionaire John D. Rockefeller and railway entrepreneur E. H. Harriman built massive industrial empires and monopolies and lived fabulously extravagant lives.

This was the high point of what American economist Thorstein Veblen called "conspicuous consumption," which coincided with a besieged working class, a shrinking middle class, diminishing agricultural income and rampant political corruption in city, state and national government. It erupted in a sudden and significant banking crisis right after the turn of the 20th century, a crisis in which Morgan himself used his great wealth and power to essentially save the U.S. banking system at Washington's behest. (There was no Federal Reserve at the time.)

The decline of public morality and the rise of avaricious, concentrated wealth endangered capitalism and prompted a growing movement of "progressives" - people who believed, first, that government had to be cleaned up, and second, that incorruptible government at all levels was the only power great enough to bring American capitalism and democracy back into balance.

A host of new reformist political leaders, from the Far West to the Midwest to the Eastern Seaboard, led farmer, labour, middle-class and social-gospel movements to break monopolies, clean up government, establish child and female labour laws, campaign for female suffrage and use the power of government to fight the worst abuses of unbridled capitalism.

American progressivism gave way to war fever when progressive president Woodrow Wilson led the country into war in the spring of 1917, but it came roaring back under Franklin D. Roosevelt in the wake of the Great Crash of 1929 and the decade of Depression that followed. The progressives remade the United States - their legacy is still seen in accepted federal institutions, from the Federal Reserve to Social Security to anti-trust law.

The decline of the U.S. middle class over the past decade has resulted from a number of complex causes, but is connected to rising health-care costs, lower taxation, growing passivity in government, political paralysis and increased indebtedness. As in the Gilded Age, the process has been accompanied by the decline in trade unionism, a massive concentration of financial power on Wall Street, the accumulation of great wealth and the concomitant re-emergence of conspicuous consumption and political corruption. In last November's presidential election, millions of Americans called "Enough", elected the country's first black president and gave the Democratic Party control of Congress.

But what now?

The post-Gilded Age progressive uprising largely succeeded in bringing the country a much greater degree of democracy, equality and fairness. But it did so largely because four presidents - Theodore Roosevelt (1901-1909), William Howard Taft (1909-1913), Wilson (1913-1921) and Roosevelt (1933-1945) - used the presidency to ride herd on Congress, change the political colour of the Supreme Court and wield the executive branch's tremendous power to confront trusts and monopolies and to curb bad behaviour in the public sphere. They also set a compelling example to reform leaders in both state and local government.

Last November's election didn't necessarily mark the start of a 21st-century progressive movement, but it certainly reflected a demand for change by a surprisingly large number of American voters. If Barack Obama now fails to launch a badly needed era of reform in response to that demand, the power of Big Pharma, Wall Street and the Moral Majority will continue to prevail.

Health-care reform is the battleground.

The new President has largely avoided direct confrontation with the leadership of the Republican Party. He has been accused of frittering away his great popularity and of making deals with Capitol Hill that undermine the drive for reform. And it is true that, up to a few days ago, he had not used that once-massive popularity to plunge into the fray, as his progressive forebears did.

He must now take centre stage in the fight. If he does not, there will be no significant health-care reform - reform that must include a government-operated alternative. In any era of great change, there must be a defining moment that clearly shows how the agents of transformation have won the struggle and the opponents of reform have been soundly defeated. That moment is at hand.

What is unfolding in Washington now is nothing less than a morality play. It is up to Mr. Obama himself to decisively bring down the curtain on a social, political and economic system that pretends to worship the free market but, in fact, institutionalizes oligarchy - or he will fall victim to political mediocrity.

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David Bercuson is director of the Centre for Military and Strategic Studies at the University of Calgary.

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