Disaster "The Johnstown Flood". Were Introduced". Cohan Was Born". Hello, Is the Sun Shining? Let There Be Light! One Dakota, Two Dakota The Pineapple Express "Hawaii". In the marketplace, technology has delivered a different type of extremism: a handful of companies with unfettered dominance over key components of economic activity. The internet, a decentralized collection of interconnecting networks, has created new centralized powers that siphon, aggregate, and manipulate personal information to create bottlenecks to the operation of free and open competition.
The internet started out with the hope of being the great democratizer by removing barriers to everything from the flow of news to local taxi service. While the networks of history had centralized economic activity, the distributed architecture of the internet would similarly distribute power away from central institutions.
Unfortunately, that has not been the result. Companies utilize the distributed network to recentralize activity. Corporate digital autocrats collect personal information and exploit it to control markets. Political digital autocrats use the internet to spy on their citizens and target attacks on the democratic process. That the effects of new technology cause such upheaval should not surprise us. Technological change previously caused similar—if not greater—destabilization; both economic and political.
The technology-driven upheavals of the late 19th and early 20th centuries shaped the world from which our new technology is departing. The challenges of that time echo in the reality that confronts us today. In an novel, co-written with his friend Charles Dudley Warner, the duo satirized the economic excesses, personal greed and political corruption of the time. The Gilded Age was a time in which technological innovation drove wonderful new industrial products that improved individual lives, while at the same time creating great wealth and accompanying economic inequality.
It was a period of market dominating companies and citizen and journalistic revolts against their control. Hayes in and Harrison in There is one more similarity between today and the original Gilded Age. Back then, the rules that governed the application of the new technology were made by a handful of industrial barons for their own benefit. The rules in the early internet era—the new Gilded Age—are being made similarly; this time by information barons.
The unbridled nature of the original Gilded Age eventually went too far. The result was a popular uprising and the representatives of the people stepping in to create a set of rules to serve the broad public interest over narrow private interests.
We find ourselves at a similar crossroads today. Whether and how we step up to that responsibility is the challenge of our era … and of each of us. Good policy is grounded in an understanding of history. We forget that liberal democratic capitalism succeeded because acting collectively, Americans caused their democratic institutions to protect consumers, workers, and the competitive marketplace.
We forget that liberal democratic capitalism had to do battle against those who saw communism, socialism, or fascism as a better alternative. We forget that liberal democratic capitalism was preserved through the establishment of rules that inhibited its natural excesses. In the industrial era, we discovered that the rules established for a mercantile-agrarian economy were no longer up to the task.
Industrial scope, scale, and speed necessitated the establishment of guardrails to keep industrial capitalism on the right path. As we look at the new realities of the internet age, we need similar guardrails that will allow information capitalism to similarly succeed. First, enormous fortunes are created by entrepreneurs who successfully exploit the new, largely unregulated niches that have opened up.
Second, the effects of the new force run up against the public interest and the rights of others. New technology opens new niches for which there are no rules because the niche never before existed. Those who saw the niches and determined how to open them deserve to be rewarded. But when the exploitation of those niches collides with the common good, then the people have the right to insist on rules to protect the broader public interest. At the time of the original Gilded Age, it was the industrial barons who made the rules.
Today, in the new Gilded Age, it is the internet barons who make the rules. Unfortunately, the parallel ends there. Neither the Republican-led Congress, nor the Trump Administration has stepped up to their responsibility to establish new rules for our new time.
As is typical for the early spring in Washington, the day saw a struggle between snow and daffodils. It had snowed the day before; but on this day, under a bright degree sun, the president of the United States stood before the Capitol to take the Oath of Office.
Theodore Roosevelt, who had become the surprise president upon the death of William McKinley four years earlier, was now the duly elected chief executive of a country at the height of the Gilded Age.
Roosevelt addressed the dichotomy of economic expansion and the abuse of the power that had accumulated to a few as a result. Roosevelt concluded with a message that should be delivered today. The economic powerhouses of which Roosevelt spoke were of two types: those that built the networks that connected the nation, and those that used the networks.
The economic powerhouses of the digital era have the same construction: dominant providers of internet access and the dominant digital platforms that ride on them. Railroads were the first high-speed network. By transporting raw materials to a central point for factory-based conversion into products, the railroad enabled the industrial revolution—just as high-speed internet connections have enabled the information revolution. The railroads then enabled new economic giants, just as the internet has.
When Gustavus Swift developed the refrigerated railroad car in , his company did to local butchers what Google would do to the local advertising business over a century later. Slaughtering at scale in Chicago abattoirs was significantly less expensive than one-off local butchers doing the same thing.
Add to this the savings from transporting only the edible cuts of beef rather than the whole cow, and Swift redefined the American dinner plate while destroying a cornerstone of local economic activity. Digital information is the most important capital asset of the 21st century. Typically, Gilded Age assets were hard assets: industrial products that ended up being sold. Today, the top decile of earners commands more than 50 percent of income.
At the height of the first Gilded Age, the top decile commanded more than 45 percent of the gross income in the United States.
This is not a condemnation of the entrepreneurs who built the digital economy. The risk-taking and the vision necessary for innovation deserves to be rewarded. It is, however, a commentary that trickle-down economics has failed to share those rewards with the rest of the population. Which leads us to a foundational question. The Knights of Labor Opens a modal. Labor battles in the Gilded Age Opens a modal.
The Populists Opens a modal. Immigration and migration in the Gilded Age Opens a modal. Continuity and change in the Gilded Age Opens a modal. Practice The Gilded Age Get 3 of 4 questions to level up! The South after the Civil War. Life after slavery for African Americans Opens a modal. The origins of Jim Crow - introduction Opens a modal. Origins of Jim Crow - Compromise of and Plessy v. Ferguson Opens a modal. Plessy v. The Compromise of Opens a modal. Jim Crow Opens a modal.
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