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The Great Debate: Income inequality in the Guilded Age of America

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Justin A. Rigi

This document summarizes a debate between Henry George and William Sumner on economic inequality during the Gilded Age. George advocated for land reform and higher taxes on landowners to reduce inequality, while Sumner defended wealthy businessmen like Andrew Carnegie and believed philanthropy was better than government intervention. The debate centered around how to address high poverty rates that existed alongside great wealth accumulation in late 19th century America.

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The Great Debate The late 19th century in America is known as a time of great technological advancement. With the end of the Civil War there were new weapons. Trains and railroads became more efficient. Cities, as they are known today, were being built. Thousands upon thousands of people were moving west to own their own land and to farm and be their own boss. It was a time when great wealth and vast fortunes were being accumulated. Men like Andrew Carnegie and John Rockefeller were quickly becoming the richest men in the history of the world. Word of the American Dream was spreading rapidly throughout the world. Millions of people were flocking onto American shores for a chance to partake in this grand dream. But every story has two sides as did this American dream, one which businessmen seemed to forget to tell people as they travelled west or across the ocean. With this great wealth there was even greater poverty. In the very city in which Rockefeller and JP Morgan amassed their personal fortunes, thousands more were living off of a dollar a day. It is from this sort of inequality that history gives two completely different people from completely different parts of society: Andrew Carnegie, steel magnate and billionaire and Thomas ODonnell, textile worker and impoverished father. Carnegie was worth 4.5 billion dollars. ODonnell could barely feed his family. Yet, Carnegie at one point in his life was just as poor as ODonnell, working away in the mills barely making a dollar a day himself. How is that one man could amass such a fortune and another from the same humble beginnings be unable to even
clothe his children during the wintry months. How is this system just? Or is it just? Two likewise vastly different characters would have two completely differing opinions as to these very questions. Henry George and William Sumner were both intellectuals of the Gilded Age and political and economic activists. Both, however, completely disagreed with each other in every way possible except for the fact that there was indeed great poverty and inequality in America Henry George would look at ODonnell with great pity. He would bemoan the very idea that a man would have to search the ground for leftover clams in order to feed his family. He would be devastated that ODonnell could not even amass $1,500 in order to move west to start anew and own his own land. In his great work Poverty and Progress ODonnell seeks to answer these quintessential problems of society. His greatest question is why with the advancement of technology is there still such poverty and inequality? To, George, the answer is quite simple. He would tell Carnegie that he is morally wrong for holding on to his money. George would disagree with the idea of not perpetuating the poverty problem by just giving money and need to those who need it. To him the answer was not in philanthropy but in the land. He believed there was so much beautiful land in this country that everyone should have a piece of it. He offered the idea of a land tax, which was high enough that the only tax throughout the country would be on land. This would in turn give landowners an incentive to actually use the land rather than hoard it and if not use it then at least sell it to someone who would. George detested the fact that wealthy businessman with essentially no morals saw a piece of property and thus saw only technological advancement. According to him, with technological advancement
came higher rent but this higher rent did not come concurrent with higher wages. Therein lay the problem for Henry George. He would tell Sumner and Carnegie that this whole free market idea causes nothing but great disparity of wealth and no chance whatsoever for the uneducated man. He would propose government intervention and control, even partial control of the railroad. This, in his mind, would help put a damper on the economic profits of millionaires. Henry George in any debate would call himself the unequivocal voice of the poor man. His very book was inspired after a trip to New York City, home of the greatest mansions adjacent to the poorest tenement houses. He would support labor unions and minimum wages. He would tell Sumner that a millionaires wealth could be put to greater use actually aiding the cause rather than just merely building libraries. He would look at Andrew Carnegie as arrogant and pompous and remind Carnegie of his own humble beginnings. It is at this point that William Sumner would step in and defend Carnegie. As George is the defender of the poor man, Sumner is not only the knight of the rich man but of the middle class worker, the class that according to him, feels heaviest the strain of the impoverished. To Sumner the free market is a blessing. It creates healthy competition, that very competition which gave Carnegie the opportunity to become someone. While George would admonish Carnegie for philanthropy, Sumner would defend him. He would quote the old saying, Give a man a fish, and feed him for a day. Teach a man to fish, feed him for a lifetime. To these men, the greatest gift they could give to society would be to build great institutions, which could better man. Carnegie was an avid reader. Sumner would say that this voracious reading
was what helped him become a self made man and that anyone could do this with reading and the free market system. They would rather teach a man to fish than perpetuate the problem by just giving alms. Sumner would defend Carnegie, who believed that by merely giving alms, a rich man was teaching the poor man to only expect to be taken care of, thereby not fixing the problem of inequality but, in fact, hampering it. ODonnell and Carnegie truly are from different spectrums of society. The question can be posed would George or Sumner blame either Carnegie or ODonnell, respectively, for his plot in life. Henry George would blame Carnegie for his lack of caring. He would say that the glamorous libraries and museums are nothing but show. He would want Carnegie to be more directly involved in spreading his wealth, and if he does not, George would want the government to step in and mediate. Sumner, however, would place no blame on ODonnell for his plight. According to Sumner the only despicable in society are the paupers, those who do not even try to find work but literally revel in their poverty. ODonnell, though, is a hard-working man who provides for his family and does what he can to get by. Carnegie and Sumner would see no wrong in that. They, in fact, would say it then is their duty to come to the aid of this man for Every honest citizenowes it to himself, to the community, and especially to those who are at once weak and wronged, to go to their assistance and to help redress their wrongs. Unlike George, however, Sumner did not believe this meant hampering the wealth of the rich for only the rich through their philanthropy could truly aid the impoverished. The late 19th century was a time of great change. Technology advanced, politics matured, economic theories were presented. America went from being a
rural country to a predominately urban one. Railroads were built throughout the country, as were cities and ports. Skyscrapers were constructed. As things quickly changed the very way the US worked as a country needed to progress as well, in order to accommodate these advancements. Men like Sumner, Carnegie, and George began to author books and essays debating what was the best way to run the country economically and politically. One can easily imagine debates such as this between all sorts of men over what should be done. In hindsight, modern Americans can see that the best of both philosophies were implemented quite successfully, creating a nation, in which truly any man can become educated and make his own personal fortune, whether he be the son of a billionaire or of a laborer.

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The Great Debate: Income inequality in the Guilded Age of America

  • 1. The Great Debate The late 19th century in America is known as a time of great technological advancement. With the end of the Civil War there were new weapons. Trains and railroads became more efficient. Cities, as they are known today, were being built. Thousands upon thousands of people were moving west to own their own land and to farm and be their own boss. It was a time when great wealth and vast fortunes were being accumulated. Men like Andrew Carnegie and John Rockefeller were quickly becoming the richest men in the history of the world. Word of the American Dream was spreading rapidly throughout the world. Millions of people were flocking onto American shores for a chance to partake in this grand dream. But every story has two sides as did this American dream, one which businessmen seemed to forget to tell people as they travelled west or across the ocean. With this great wealth there was even greater poverty. In the very city in which Rockefeller and JP Morgan amassed their personal fortunes, thousands more were living off of a dollar a day. It is from this sort of inequality that history gives two completely different people from completely different parts of society: Andrew Carnegie, steel magnate and billionaire and Thomas ODonnell, textile worker and impoverished father. Carnegie was worth 4.5 billion dollars. ODonnell could barely feed his family. Yet, Carnegie at one point in his life was just as poor as ODonnell, working away in the mills barely making a dollar a day himself. How is that one man could amass such a fortune and another from the same humble beginnings be unable to even
  • 2. clothe his children during the wintry months. How is this system just? Or is it just? Two likewise vastly different characters would have two completely differing opinions as to these very questions. Henry George and William Sumner were both intellectuals of the Gilded Age and political and economic activists. Both, however, completely disagreed with each other in every way possible except for the fact that there was indeed great poverty and inequality in America Henry George would look at ODonnell with great pity. He would bemoan the very idea that a man would have to search the ground for leftover clams in order to feed his family. He would be devastated that ODonnell could not even amass $1,500 in order to move west to start anew and own his own land. In his great work Poverty and Progress ODonnell seeks to answer these quintessential problems of society. His greatest question is why with the advancement of technology is there still such poverty and inequality? To, George, the answer is quite simple. He would tell Carnegie that he is morally wrong for holding on to his money. George would disagree with the idea of not perpetuating the poverty problem by just giving money and need to those who need it. To him the answer was not in philanthropy but in the land. He believed there was so much beautiful land in this country that everyone should have a piece of it. He offered the idea of a land tax, which was high enough that the only tax throughout the country would be on land. This would in turn give landowners an incentive to actually use the land rather than hoard it and if not use it then at least sell it to someone who would. George detested the fact that wealthy businessman with essentially no morals saw a piece of property and thus saw only technological advancement. According to him, with technological advancement
  • 3. came higher rent but this higher rent did not come concurrent with higher wages. Therein lay the problem for Henry George. He would tell Sumner and Carnegie that this whole free market idea causes nothing but great disparity of wealth and no chance whatsoever for the uneducated man. He would propose government intervention and control, even partial control of the railroad. This, in his mind, would help put a damper on the economic profits of millionaires. Henry George in any debate would call himself the unequivocal voice of the poor man. His very book was inspired after a trip to New York City, home of the greatest mansions adjacent to the poorest tenement houses. He would support labor unions and minimum wages. He would tell Sumner that a millionaires wealth could be put to greater use actually aiding the cause rather than just merely building libraries. He would look at Andrew Carnegie as arrogant and pompous and remind Carnegie of his own humble beginnings. It is at this point that William Sumner would step in and defend Carnegie. As George is the defender of the poor man, Sumner is not only the knight of the rich man but of the middle class worker, the class that according to him, feels heaviest the strain of the impoverished. To Sumner the free market is a blessing. It creates healthy competition, that very competition which gave Carnegie the opportunity to become someone. While George would admonish Carnegie for philanthropy, Sumner would defend him. He would quote the old saying, Give a man a fish, and feed him for a day. Teach a man to fish, feed him for a lifetime. To these men, the greatest gift they could give to society would be to build great institutions, which could better man. Carnegie was an avid reader. Sumner would say that this voracious reading
  • 4. was what helped him become a self made man and that anyone could do this with reading and the free market system. They would rather teach a man to fish than perpetuate the problem by just giving alms. Sumner would defend Carnegie, who believed that by merely giving alms, a rich man was teaching the poor man to only expect to be taken care of, thereby not fixing the problem of inequality but, in fact, hampering it. ODonnell and Carnegie truly are from different spectrums of society. The question can be posed would George or Sumner blame either Carnegie or ODonnell, respectively, for his plot in life. Henry George would blame Carnegie for his lack of caring. He would say that the glamorous libraries and museums are nothing but show. He would want Carnegie to be more directly involved in spreading his wealth, and if he does not, George would want the government to step in and mediate. Sumner, however, would place no blame on ODonnell for his plight. According to Sumner the only despicable in society are the paupers, those who do not even try to find work but literally revel in their poverty. ODonnell, though, is a hard-working man who provides for his family and does what he can to get by. Carnegie and Sumner would see no wrong in that. They, in fact, would say it then is their duty to come to the aid of this man for Every honest citizenowes it to himself, to the community, and especially to those who are at once weak and wronged, to go to their assistance and to help redress their wrongs. Unlike George, however, Sumner did not believe this meant hampering the wealth of the rich for only the rich through their philanthropy could truly aid the impoverished. The late 19th century was a time of great change. Technology advanced, politics matured, economic theories were presented. America went from being a
  • 5. rural country to a predominately urban one. Railroads were built throughout the country, as were cities and ports. Skyscrapers were constructed. As things quickly changed the very way the US worked as a country needed to progress as well, in order to accommodate these advancements. Men like Sumner, Carnegie, and George began to author books and essays debating what was the best way to run the country economically and politically. One can easily imagine debates such as this between all sorts of men over what should be done. In hindsight, modern Americans can see that the best of both philosophies were implemented quite successfully, creating a nation, in which truly any man can become educated and make his own personal fortune, whether he be the son of a billionaire or of a laborer.