Gilded Age Redux?
Note: this is not a history-of-technology piece
Yes, we’re in a second Gilded Age.[1] But wait—history doesn’t repeat itself. No, it doesn’t. But when you have the same basic set of conditions operating, you’re likely to get a similar set of results, and that’s what’s happening here. Because, to an unfortunate extent, we’re still living in a society ruled by under-regulated capitalism. It’s not the same, but it’s close enough that we have similar social strains and large-scale under-happiness. To understand that, let’s briefly—as briefly as possible—review how capitalism works. These are the facts.
Capitalism is the investment of capital—money and other resources—into an endeavor whose purpose is profit—making more than you spend. The profits go to the owners of the business—whether that’s one person, a small group, or a very large group of investors, in the case of a publicly-held corporation. That’s a misnomer—publicly-held—because these are still private enterprises. But their shares—or at least some of them—are available for purchase by anyone with the means to do so and access to the market.
A capitalist enterprise’s sole purpose, and sole motive, is profit—maximum profit. Maximum profit is achieved by charging, and getting, the most money for the least possible good or service in return. A perfect profit would be money-for-nothing; someone gives you a bunch of money and you give them nothing in return. That’s not going to happen, of course. Charitable organizations get money for nothing, in the sense that they don’t provide goods or services directly to the person giving them the money, but they use that money to provide goods and services that benefit society at large.
Since the sole goal of a capitalist enterprise is maximum profit, it behooves that enterprise to offer a little as possible for as high a price as possible. But that’s constrained by two things. The first is competition; other enterprises who offer the same or similar benefit, who can undercut the price charged by their competitor; the competition can choose a smaller profit margin per-transaction in order to garner more transactions by taking them away from competitors. So, competition imposes a strong restraint on the natural tendency for the enterprise to reduce the intrinsic value of its offerings and increase the price charged for those offerings. Competition also spurs the improvement of goods and services for competitive advantage.
The problem is, it’s also a natural built-in for capitalist enterprises to eliminate competition. There are several ways to do this, one of which is buying up its competitors. If the enterprise is successful enough at this to effectively eliminate any and all viable competition, then it is free to maximize its profit margin as never before; it can offer less for more. This works best when the offering is something people need, rather than something frivolous.
The second restraint on capitalism is regulation. Governments, representing the public interest at large, imposes restraints on what capitalist endeavors can do. This is especially important with publicly-held corporations, whose blinkered focus is the delivery of short- to medium-term dividends to its shareholders. Such enterprises have no natural incentive to care about the public welfare; they have no natural incentive to restrain or tailor their activities for any purpose other than their own profit. It’s true that public pressure can impose such restraints—we’ll get to that—but that relies on public awareness of what these companies are doing, and it’s not in the public interest to allow companies to do whatever they want until someone realizes they’re doing something dangerous or harmful and then reacting to that. It makes far more sense to just pass laws saying you can’t dump lead into the river, you can’t have workers breathing toxic dust, you can’t keep putting lead in gasoline and causing widespread intellectual disability in children, etc. And, you can’t buy up or push out all the competition so that you have a monopoly, or close to it, in your industry. Because then you are free to “enshittify”—to reduce the value of what you offer while increasing the price. And that is exactly what you will do, every time. Because that increases those shareholder dividends, and those executive salaries and bonuses, and your lobbying power.
And that lobbying power, aided by widespread, long-term public political apathy and despair, have ensured, for the past forty-five years, that these companies are regulated less and less. So there we are. Oligarchy and long-stagnant salaries and wages. We have surrendered more and more power to these private entities, so it’s no wonder that so many politicians feel more beholden to them than they do to us.
There is, fortunately, one other way to constrain capitalist enterprises—public pressure. The boycott has a storied history; it worked in the eighteenth century, and it works now. And it’s much easier to “get the word out” now than it was then (although their means of communication were more effective than you might think). How long did it take ABC/Disney and their broadcast networks to cave to public pressure and loss of subscription revenue and put Jimmy Kimmel back on? A few days. Several companies in the U.S. who at first caved to the demands of this cancerous administration to end their DEI (diversity, equity, and inclusion) programs had to re-think those decisions when it started costing them lots of business, which got them lots of bad press, which cost them more business.
And, public pressure can, and frequently does, trigger helpful regulation. Upton Sinclair’s exposé of the Chicago meat-packing industry played a material role in pushing for what became the FDA (Food and Drug Administration), which has been looking out for us now for 120 years. Public pressure in the early 1970s culminated in the signing of the international whaling ban.
One difference in the first Gilded Age and our own may be that the industry of marketing and PR (i.e. lies) is so much more developed now. Corporations are in the business of full-time lying. They lie to all of us, all the time, about their motivations and their sense of responsibility. It’s all complete horseshit. Corporations have one motivation and one motivation only—making money—and their sense of responsibility is the same. Maximum profits and dividends. If we want corporations to care about anything else, we have to make them. We have to make it less profitable for them not to comply with our wishes than it is to do so. No exceptions.
If enough people keep up enough pressure on capitalist enterprises that they cave to that pressure, for long enough, regulation will follow—because that same pressure will remove corporate shills and patsies from office and replace them with people who don’t play that.
It happened before—from the 1910s to the 1970s. Of course we can’t just bring back exactly what worked in 1912 or 1969. We don’t need to. But the basic principles are the same. We are here for largely the same reasons we got to 1900, and we can get out of it using the same basic means. Enough of us just have to want to.
[1] Remember that “Gilded Age” and “Golden Age” are nowhere near the same; “gilded” means covered in a veneer of gold, or something that looks like gold. It suggests the appearance of something good that hides something base underneath. It implies corruption and falsehood.