The Gilded Age, lasting from 1865 to World War I, was an era of economic growth never before seen in the history of the world. The standard of living of the modern age was born during this time of phenomenal transition. Lives lengthen. Wealth exploded. The middle class lived better than kings a century earlier.
And yet this period in history is mostly ignored in the classroom. Those who do address it are keen to debunk the overall trends and instead focus on the plight of small sectors, generally seeking to debunk the idea that it was a period of growth.
The finest response to the “revisionist” view was written by a young Robert Higgs. Fresh out of graduate school and not yet exposed to the Austrian literature, he used the tools he had to shore up the reputation of the Gilded Age and explain that the growth was real and it happened due to free markets and sound money.
The result is a book that still has no match as a rigorous account of the economic history of the time.
Among many other insights, he explains the wonderful effects of population movements from the country to the city and how this led to new forms of communication and sharing of ideas among the commercial classes.
He explains how falling prices were not a disaster but rather a benefit to the population. He defends the hands-off approach of the presidency and the absence of bureaucratic management.
He shows that this period was the greatest triumph for mankind since the industrial revolution itself.
In this new edition, Higgs writes a new introduction to repudiates some of his methodological approach which he now finds to be excessively empirical and not drawing on the causal-realist tradition. That said, the book holds up as an economic history.
It is a fantastic thing to have this book available again to counter the propaganda that the Gilded Age was nothing but a time of Robber Barrons and rising class conflict. On the contrary, he argues, the masses have never before (or even after) benefited so much from an economic transformation.
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I didn’t know that this era was “mostly ignored” in the classroom. What classroom? College, high school? US, Canada, other country? I’m from Spain and I’ve never got the impression that this era was one of recession or economic decline. On the contrary, almost every account of this era tells and retells the endless list of world-changing inventions, the process of urbanization, and generally speaking the massive progress going on in the USA, Europe and Japan.
Telegraph. Telephone. Radio. Railroads. Oil. Steel. Lightbulbs. Electricity. Cameras. Films. Airplanes. Cars. Battleships.
Some consider that the welfare of the “working masses” actually declined due to industrialization, but almost no self-respectable text denies the immense technological improvements. Where authors disagree is in how did these improvements advance human welfare – Julian Simon disagreed with Marx.
“The age of synergy”, by Vaclav Smil, makes the point very convincingly. There are also lots of books about the Second Industrial Revolution, Rockefeller, Carnegie, Ford, Edison, Benz, Diesel, Tesla, Marconi, the rise of Japan after 1870, the oil revolution in Baku – I don’t think any of these made the point of declining living standards or economic stagnation.
What is true that most people seem unable to come to terms with the fact that this era was also deflationary: the Wikipedia article on the so-called Long Deflation is weak, as if the guys writing it didn’t really believe that there had been a depression. Cause there hadn’t!
Much of the literature on the subject actually approaches the era as one of depression. The problem is that then people who don’t look deeper into the topic and equivocate depression with lack of economic growth (like Paul Krugman).
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