An era seeing vast social, political, and economic changes, the Progressive Era from 1890 to the 1920’s was a steppingstone in correcting democracy and eradicating widespread issues spawned by monopolistic industrial figures. A precursor in laying the framework for WWI and the Roaring Twenties, the Progressive movement saw a dramatic rise in industrialization as movement supporters were avid modernizers. Nonetheless, despite its prosperous economic growth, the rise of unionization and economic/ social public policy posed as a threat towards many industrial giants and the progressive modernization. Through analyzing economic and political setbacks and break throughs, the changes within the progressive period saw a rollercoaster of peaks and fallbacks from economic panics to and heavy federal political and social regulation of industrial monopolists; society emerging from an agrarian and calm lifestyle, to an industrial and crooked capitalist playground.
Progressive Economics saw an extensive amount of changes domestically, revitalizing the struggling conditions America was submerged in. During this era of innovation, industrialization and railroad expansion led the pack in bolstering a heavy effect on domestic economic prosperity. In Gary Walton and Hugh Rockoff’s ‘History of the American Economy’ they go on to note how during this period, the production of steel for railroads doubles, highlighting how a sudden halt on railroad development would simply have postponed growth for two years. However, despite fiscal success, the renaissance of economic growth stemmed from the Panic of 1893, taking a direct blow and monumental detriment to the Philadelphia Reading Railroad, the National Cordage Company, and following this, a lingering wave of bank failures across the South and West (Walton & Rockoff, 333). With America in economic turmoil, railroad’s and their monopolist leaders were sent into dismay, becoming financially strapped, however “when the long period of falling prices reversed itself in 1896, the ICC disallowed rate increases sufficient to match rises in the general price level. Railroads reacted by slowing their repair and replacement of capital stock and equipment” (Walton and Rockoff,276). Concluding the 19th century and entering a new decade, its evident to distinguish how the American economic landscape relied so heavily on an industrial society as opposed to an agrarian dominance. Railroads and their manufacturing companies amassed such power that they in an essence dictate the flow of fiscal success. Nonetheless, their superiority in the market created an intensive monopoly, and without government intervention, regulation of business practices continued to go unrecognized, creating a ruthless laissez faire economic system. However, despite having railroads under a private ownership, their contribution to other markets was beneficial. Looking at the agricultural sector, the railroad “had saved at most only about 1.4% of GNP in the transportation of agricultural products…an upper-bound estimate of the social savings came to about 7.3% of GNP in 1890” (Walton and Rockoff, 278). Unethically, railroads were placing a detriment on labor conditions with the exploitation of underpaid workers, yet the efficiency and exponential expansion of the railroad system assisted in a minor yet, reliable mode of boosting economic conditions.
While the railroads were an external measurement of how Progressive Economics shifted, internal measurements of currency had a dramatic impact on international relations. Beginning in the late 19th century, until 1920’s the U.S. came into its own as a dominating economic power, with a net balance of goods and services quoted at $7billion (Watson and Rockoff, 251). As to what the pandora’s box to economic growth laid low and behold in the implementing gold standard, a notable international currency. In previous efforts to successfully adherence to the gold during financial crises, it put a massive strain to supply additional money to financial markets. However, with a reversal in international capital flow, the Progressive economy and its fixed exchange rate of gold promoted “the free flow of goods and capital across international borders… Bonds sold in London there sent streams of capital into the less-developed parts of the world” (Watson and Rockoff, 329). As America had entered a heavily industrialized era, relations with foreign countries grew. Metaphorically it acted as the key holder into international markets. The iteration of the gold standard as a dominant currency allowed for a reduction in volatile inflation amongst input and output of goods yet stimulating the supply of goods for an ever-expanding population. As a growing manufacturing economy and with a vast and stable international market, the United States saw itself as a massive nonreproducible power, producing an extensive portion of petroleum, copper, coal, etc. (Watson and Rockoff, 350). Nonetheless with WWI begging in 1914, the gold was a viable source of paying off debt to America from Britain and France, allowing industrial businesses to soar. European surplus granted the feasibility for gold as acting as more than just a resource for payment, but as a staple in financing politics, changing the direction of international relations.
With the surge in economic fluctuation, the Progressive Era sought out to make sure that dominating industrial forces wouldn’t implement any unethical practices in order to satisfy capitalist greed. With prior tariffs established from the Civil War, tariffs were established in order to pay off any war debts. With the early implementation of the Interstate Commerce Commission in 1887, it began the period in which domestic policies, primarily economic ones, became more utilized (Watson and Rockoff, 275). With congress attempting to pass a form of tax legislation in 1894, it was found unconstitutional in 1895 (Watson and Rockoff, 354). However, while this initiative to introduce an income tax initially failed, it laid the framework in establishing acts including the Elkins Act of 1903, Hepburn Act of 1906, and the ratification of the 16th amendment in 1913. In examining the effects of these Poli-Economic policies, entering the Progressive Era saw a motive in protecting the wellbeing of the laborer, and maintaining the economic regulation amongst manufacturers and capitalists. As a Progressive government took form, the ratification of amendments and tax reforms, nonetheless, shifted the paradigm of tax income, realizing that the worker was being heavily taxed despite low income. Mean to mention the high industrial prices exuded a strenuous force on low and low middle-class Americans. Hence the transformation had adopted a more regulated system for democrats and republicans and workers and capitalists .
Within every century, the United States economy is seemingly booming and subtilling deflating all the time. Shifting into the 20th century, its evident how economics and politics crafted a landscape for industrialists. Walton and Rockoff note how “the beginning of the twenty-first century looks very much like the beginning of the twentieth century”. Looking at the framework of industrialists and laborers, the degree to which this statement is valid is high. In the Progressive and Roaring Twenties era, the emergence of industrial monopolists dominating the private sector found itself intertwined in a hotpot of labor rights and unionization. Yet in 21st century, despite more federally regulated labor laws, there are excessive loopholes in which the rich evade taxes, nonetheless, outsourcing international labor as mode of profiting off cheap labor, second favoring the domestic labor market. Moreover, preserving the cycle of monopolistic greed and labor exploitation.