Gilded Age: Heyday of Laissez-Faire Capitalism

From Slavery to the Cooperative Commonwealth: Labor and Republican
Liberty in the Nineteenth Century
Alex Gourevitch
Introduction, pp. 3-

On November 26, the Journal printed a letter describing the Knights’ defiance of the “many companies of State militia, with their Gattling [sic] guns,” who were attempting to force the striking workers back to the fields. Little did the Journal’s editors know that by the time they had printed that letter the Louisiana state militia had broken the strike and corralled thousands of strikers into the town of Thibodaux, where a state district judge promptly placed them all under martial law. State militia then withdrew, intentionally leaving the town to a group of white citizen-vigilantes called the “Peace and Order Committee,” who happened to have been organized by the same judge that declared martial law. Upon meeting resistance from the penned in strikers, the white vigilantes unleashed a three-day torrent of killing, from November 21 to November 23, on the unarmed cane-workers and their families. “No credible official count of the victims of the Thibodaux massacre was ever made,” writes one historian, but “bodies continued to turn up in shallow graves outside of town for weeks to come.” 12 Precise body counts were beside the point. The question of who ruled town and country, plantation and courthouse, had been answered. As a mother of two white vigilantes put it, “I think this will settle the question of who is to rule[,] the nigger or the white man? For the next 50 years . . .” 13 A few months later, the Knights continued to organize in parts of Louisiana and elsewhere in the South, but the slaughter at Thibodaux put strict limits on the black worker’s struggle for economic independence and equal rights in the South. Farming a plantation “on the co-operative plan” was not even a dream deferred; it was easy to forget it had ever been a possible world the cane cutters might live in. The Knights, meanwhile, were soon reduced to an historical footnote.

The officially sanctioned mob violence at Thibodaux was one of many over the course of Southern history. In each case, a challenge to race-based class rule was met with vigilante justice in the name of white supremacy. In this case, however, it is worth noting that the Knights articulated their challenge in a specific, not well-remembered, language of freedom. From the abolition of slavery to the end of Reconstruction, many freed slaves sought more than legal recognition as equal citizens. They felt their liberation included the right not to have a master at all. They refused to work for former masters, even when offered a formal labor contract and wages. 14 Instead, when possible, they seized or settled land set aside for them and worked it individually or in joint “labor companies.” 15 Former slaves asserted their independence at all levels by organizing their own militias to protect their rights, by working their own property, by voting as they wished, and by holding local and national office. This radical moment of Reconstruction was quickly suppressed and the collapse of Reconstruction in 1877 spelled the end of any but the narrowest interpretation of what emancipation would mean. 16

When the Knights of Labor swept into Louisiana a decade later, they not only revived old hopes about self-organization and economic independence. They also integrated these regional aspirations of former slaves into a recast national ideology of republican freedom. The aforementioned hopeful parenthesis – “by January 1 we will be in good trim to lease ( on the co-operative plan) a good plantation” – speaks to this ideological shift. No doubt black laborers and local leaders heard echoes of the short-lived Reconstruction-era “labor companies” and black militias in this new language of self-directed “co-operative plans.” Their enemies certainly did. The Thibodaux Sentinel, a racist local paper hostile to the Knights’ organizing efforts, warned “against black self organization by trying to remind whites and blacks of what happened a generation earlier, in the days of black militias, and white vigilantism” and evoked “the old demons of violence and arson by ‘black banditti.’” 17 But former slaves were now also modern workers, and the Knights trumpeted the same emancipatory language throughout the nation, heralding “co-operation” as a solution to the problems facing wage-laborers everywhere. If their message carried special historical resonances in the South, the Knights added a new universalizing and solidaristic note.

This program of liberation through cooperative self-organization, articulated in the transracial language of making all workers into their own employers, scared northern industrialists just as much as Southern planters. In fact, if we see the Thibodaux massacre as just a Southern race story, then we run the risk of unintentionally and retrospectively ceding too much to the plantocracy and its attempts to control labor relations by transforming economic conflicts into questions of racial superiority. After all, wherever the Knights went and wherever their message of cooperation and independence took hold, they were met with violence not all that different from that of Southern vigilantes. Throughout the 1870s, 1880s, and 1890s, the Knights faced private violence from employers and their hired guns, most notoriously the Pinkertons. The Pinkertons operated in legal grey zones, sometimes with outright legal sanction from the courts, and often in cooperation with National Guards or even Federal troops. In fact, on occasion it was the public violence of the state that was responsible for spectacular acts of legally sanctioned murder and coercion. 18 Labor reformers labeled this unholy alliance of the state with the “Pinkerton Armed Force,” its spies and “provocative agents,” as a kind of “Bonapartism in America,” threatening to turn “the free and independent Republic of the United States of America” into the “worm-eaten Empire of Napoleon the Third.” 19 Just as in Thibodaux, the lines between vigilante violence and legal coercion sometimes blurred into indistinction. What, then, was the idea of freedom that triggered such extreme responses?

The Knights of Labor represented the culmination of a radical, labor republican tradition. Their starting premise was that “there is an inevitable and irresistible conflict between the wage-system of labor and the republican system of government.” 20 Wage-labor was considered a form of dependent labor, different from chattel slavery, but still based on relations of mastery and subjection. Dependent labor was inconsistent with the economic independence that every republican citizen deserved. That is why, in the name of republican liberty, these Knights sought “to abolish as rapidly as possible, the wage system, substituting co-operation therefore.” 21 Here was the source of their “co-operative plan,” which they found as applicable to the cane fields of Louisiana as to the shoe factories of Massachusetts. 22 The Knights wrote the cooperative program into their official constitution, the Declaration of Principles of the Knights of Labor, and, at their peak, organized thousands of cooperatives across the country. 23 The cooperative ideal threatened Southern planters, Northern industrialists and Western railroad owners alike because it struck at the dominant industrial relations between employer and employee. Affording all workers shared ownership and management of an enterprise, whether a sugar plantation, newspaper press, or garment factory, was – according to the Knights – the only way to secure to everyone their social and economic independence. The abolition of slavery two decades earlier was but the first step in a broader project of eliminating all relations of mastery and subjection in economic life. Although these ideas had been around well before the Civil War, it was only the abolition of chattel slavery and the rise of industrial capitalism that allowed the republican critique of wage-labor to come forward as a unifying, national cause. As Ira Steward, a child of abolitionists and prominent post-war labor republican, wrote in 1873, “something of slavery still remains . . . something of freedom is yet to come.” 24

19 thoughts on “Gilded Age: Heyday of Laissez-Faire Capitalism

    • It seems obvious to me that our present system is far from optimal. I think it is long past time that we try new ideas. I’d like to see more experimentation, which means creating the freedom for people to experiment. The Knights of Labor were seeking to do just that, try something new. But the powers that be couldn’t allow such a basic freedom of either political or economic independence.

      Instead, they gave us our present system of plutocracy and corporatism, which was simply a continuation of the slave economy, often with slave owners transitioning into bosses with immense power over their ’employees’. The slave social order was itself a revamped version of feudalism, just without the Commons and the rights of commoners. Power changes over the centuries and yet doesn’t change.

      We need all kinds of reform, intellectual property included. One of the main arguments of republicanism was about independence, as the Knights of Labor were concerned about. This wasn’t just independence from monarchs, slave owners, and such. It was also independence from a rigid social order. A central idea was that no generation had the right to impose on later generations. This was extended into thinking about intellectual property, as with corporations. Many thought that patents, corporate charters, or similar things shouldn’t last longer than a single generation.

      The reason for this is because they wanted to promote freedom through innovation. They didn’t just revolt against monarchism, imperialism, and colonialism. The central problem they faced was corporatism, the reason taxes became an issue. Certain corporations had gained immense power, not only having the power to act as governments where they operated but also maintaining immense influenced within the official government. That is what the Boston Tea Party was protesting. It wasn’t protesting taxation or government, but taxation without representation, because they didn’t like the idea of either a government or a corporation having the power to impose upon them without their consent.

      What right-wingers totally misunderstand, intentionally so, is that most critics of capitalism are actually criticizing corporatism, not free markets. Even Marx was for free markets, because he believed free markets were the only thing that could destroy capitalism. Marx basically wanted capitalists to be forced to live up to their own rhetoric. He understood that was the one thing capitalists couldn’t do, if they were to maintain their power.

      Freedom is a relative concept. Consider our capitalist system includes the prison industry as the third largest employer, and that probably doesn’t include the prison laborers as part of those ’employment’ numbers. There are more blacks in prison now than were enslaved before the Civil War. That isn’t even to consider the large number of other minorities and whites also in prison. These people are still being treated as property, just of the state instead of private slave owners.

      A major problem of our society is that we use ‘property’ as our way of thinking about everything. We even define or frame freedom as self-ownership. We don’t consciously think about this, but it is built into our worldview. The very basis of our thinking needs to be reformed. An idea is not property. Basic things of life, whether genetics or medicines, shouldn’t be owned in the way one owns a car. Even our understanding of land ownership is unnatural and unsustainable, disconnected from the millennia-old traditions and practices of human societies.

      This goes back to much of my own thinking over the years. I’m particularly reminded of my writings on Howard Schwartz.

      I have a couple books about the American founders. Well, I have more than a couple of books. But two in particular are about that generations beliefs about the role of the intellectual, scientist, and intellectual. Freedom of ideas and speech were seen as inseparable from freedom of individuals and societies. Freedom either involved all aspects of life or it wasn’t freedom. We seem to have lost that radical sense of freedom which, to many Enlightenment thinkers, seemed common sense.

      It is tricky trying to implement such radical freedom. But the alternatives of failing to do so are less than inspiring, some quite frightening.

    • As I see it, the economics is just the effect, not the cause. The source of the problem is social and political. It is how our society is ordered and who has the power, which so happens to be the same people who have most of the money. I’m not sure how we change that.

  1. You may have a point, only radical change is going to affect things. I think you have a point, the elite are less and less intelligent.

    I am less fond of the direction the Republican Party and their debates are going, along with the rest of the US. I don’t think they’ll release power voluntarily.

  2. Two points:
    1. France is no model. It is a mess. Unemployment is sky high (last I read was 20% for the young). It’s almost impossible to get rid of unproductive employees at any level. which, among other things, limits entry opportunities for young people. France’s finances are not good and improvement, as in Greece, requires action the people do not approve. Immigrants generally do not assimilate, thus major problems exist there. The French tend not to respect those who do not speak French well. You are better off not speaking it than speaking it poorly. A Dutch business associate told me years ago that France was like its food. You never were sure what was under the sauce.

    Property. One of the most critical aspects of a stable society and economy is the assurance of state protection of private property. Without that, investing in something usually is too risky. Thus, the economic base is shaky and limited. Why put money in something that, at any time, the state might take away or allow someone else to take away from you? I have in-laws in such a place in eastern Europe. My daughter-in-law’s father keeps what money he has in the West, not at home. I have had friends (now deceased) from such places who never put money in property because it wasn’t safe. Protection of private property is a basic unless the state, as in the old USSR, owns everything. And that raises a whole new set of problems.

    • “France is no model.”

      I have neither great familiarity with nor much of an opinion of France.

      I will say this, however. France has a long history of surviving as a nation. It will likely still be around centuries from now. The United States has a less certain future, as we are a young and hence unstable country. In the coming generations or centuries, the US easily might disintegrate into separate countries, fall into severe decreptitude, or other possibilities.

      A country like France is in many ways more concerned about long term cultural survival, the likely reason they are so defensive of their language, for example. On the other hand, the US has no strong culture that holds it together and could fall apart quite easily. I personally wouldn’t necessarily mind that. For a long time, I’ve suspected the US is simply too large to be a functioning democracy and I’d prefer to live in a functioning democracy, rather than a banana republic, even a relatively nice banana republic as they go.

      “Unemployment is sky high”

      Well, the US unemployment rate is also high. But I don’t know how to compare them. The US hides its true unemployment rate and has done so since the 1980s. I don’t know if France hides their unemployment rate at all.

      “Immigrants generally do not assimilate, thus major problems exist there.”

      That has been true for every country throughout history. All immigrants generally do not assimilate, until they do, as they nearly always do eventually, but it sometimes happens faster than at other times, depending on various conditions.

      “The French tend not to respect those who do not speak French well.”

      That would be a condition that would make assimilation difficult. If trying to speak French will make you less accepted than not trying at all, then one is less likely motivated to speak French and so assimilate. That might not speak well about the French, but it is understandable. Old ethnic nation-states typically are overly proud and insular, which is how they remained ethnic nation-states for so long.

      “One of the most critical aspects of a stable society and economy is the assurance of state protection of private property.”

      That isn’t really about property or not limited to property. It’s just about a stable society in general. If jobs aren’t stable, if housing isn’t stable, if protection of the working class isn’t stable, etc etc, then people will have fewer incentives to act in ways that necessitate stability (and so much of life depends on stability). To see how people live in unstable environments, look to any neighborhood, community, or country with severe and concentrated poverty. Under such conditions, social problems abound, because people lose hope when nothing in life can be depended upon.

      American blacks, for example, know they can’t depend on the law to protect them. They might be shot by a police officer for no particular reason or sent to prison on trumped up charges, and there is little they can do to prevent it or predict it. It’s not even personal, just a simple combination of skin color and being in the wrong place at the wrong time. Protection of life and body, of basic freedom and rights is most important of all. Plus, they can’t depend on getting hired for a job or even getting an interview, even if they have no criminal record and are more highly qualified than a white person. The basic necessities of life such as earning money and being able to pay the bills is less certain for minorities.

      Also, many American blacks lost their property (i.e., houses) because of the housing bubble caused by the shenanigans of mostly rich white people. These American blacks were trying to do everything right. They worked hard, saved their money, and invested in houses. They were living the American Dream. Realizing the government will bail out bankers but not protect the victims is disheartening, to say the least. It will discourage a large number of people from trying to get ahead in a system with a tilted playing field.

      A lot of countries have problems. It’s just that the US no longer can portray itself as particularly special. A growing number of other developed countries now have some combination of lower poverty and unemployment, larger middle classes, and higher rates of economic mobility. Pointing out the problems of other countries is unlikely to comfort the average and below average American.

    • As an American, I prefer to criticize my own country. It’s not that I don’t see the problems with other countries. I’m just more of a supporter of the view that one should remove the plank from one’s own eye. It’s because I see the potential of the US that I despise seeing that potential wasted.

    • That relates to our discussion about the South. I only consider my personal opinion of the South to be relevant to the extent that I have personal experience of and personal connection to the South.

      The South is part of who I am. It is where my ancestors lived for many generations and in some cases for many centuries. It’s where I spent many of my own formative early years.

      To criticize where I used to live or where I now live is to criticize what I feel a part of. So, it’s related to the same impulse in criticizing myself or anything else that is close to me and my own.

      As such, I rarely say much positive or negative about other regions of the country. The Southwest is mostly of historical interest to me. The West Coast only has slight interest to me, as I did have some family that moved there (California) in recent generations, but they don’t have deep roots there. I also have an Iowan friend who now lives in Oregon. My experience of those regions is too narrow and shallow, and so my opinions are largely limited to occasional historical commentary, and even then from a more objective viewpoint with less judgment, a mere discussion of facts acquired from books.

      I tend to be even more neutral about foreign countries. I usually only care about foreign countries that, once again, I somehow feel connected to. For that reason, I’m more likely to have strong opinions about the countries or regions from where my ancestors came, which means basically Britain and Northwestern Europe.

      I must admit that I had some family from Alsace-Lorraine. On some censuses, a person in the household answered that they came from Germany, but on others they said France. It was a border region. Still, I don’t feel a connection to France, per se. Maybe I should. The French had immense influence on England, of course. And it was the Anglo-Norman
      Cavaliers who my Scottish forebear, as a slave owner in 1650, lived among in early Virginia. Also, the Scottish had close connections to the French.

      I’ve been unduly influenced by the English prejudice toward the French and the scrubbing from historical memory of the French influence on the British and hence on America. It was from the French that the English inherited aristocracy and monarchism, the ground upon which imperialism was built for both countries. That cultural tradition was inherited and remade by Americans in our contemporary neo-imperialist project.

      It might be fruitful to take more seriously what can be learned by Americans of the French and vice versa. Even so, I’m reluctant to criticize the French for the reason of my superficial knowledge. I don’t have a sense of the heart of French culture, the essence of what that society is about. I don’t like to speak in ignorance. But I should take responsibility for that ignorance and not simply accept it. I’ve been meaning to learn more about European history in general, and France would be an important part of that learning process.

      Until then, I honestly don’t know what to make of France nor know how to judge it. English-speakers have been speaking ill of the French for centuries. Yet the French keep on doing their own thing and doing fairly well by world and historical standards. They must be doing something right.

    • I should add one thing. I’m not against outside observers stating their views. Often that is helpful. But there are also many challenges to doing it well.

      I know that other countries come up in discussions in my blog. I occasionally even write about other countries, when they directly relate to something I’ve recently been reading. I would like to be able to make better comparisons, as that is a great way of gaining insight.

      I’m not sure why I feel so reluctant to carry that kind of thing too far. Maybe it comes from past experience. I know that when I’ve tried to do comparisons how much my ignorance becomes clear. It also seems like ignorance in general plagues the entire project, even for the more well informed. Few people know multiple countries equally well. Plus, few countries keep data the same way.

      This is true even for something so simple as knowing the actual unemployment numbers of a country. I’ve lived in the US my entire life and I don’t know the actual unemployment numbers for my own country. How am I even supposed to have a clue about the accuracy of data from other countries? It just feels like a fool’s errand trying to figure out that kind of thing, at least for me.

      I realize how easy it is to manipulate data, not just in analyzing it but worse still in those who collect and present it. Now, if someone has a good comparative analysis of actual unemployment numbers and what they might mean, I’d love to see it. I want something in-depth that gets past the misleading rhetoric and superficial numbers. I’m not so cynical to think such doesn’t exist. But I’m feeling wary.

      Besides, in the end, I’m not sure what other countries can tell me about my own country. And in what ways that could be comforting, even knowing that some countries are doing worse. It is like having late stage cancer and thanking your lucky stars that at least you aren’t brain-dead like the car accident victim in the hospital bed next to you. Still, not being brain-dead is a good thing and it’s better than nothing.

  3. Immigrants generally do not assimilate . . . . . .

    The signifiant difference in assimilation or lack thereof between the US and France is that the US wants and expects immigrants to assimilate. It even attempts to encourage and speed assimilation. My mother-in-law, for example, was on the public payroll teaching English to immigrants. The French, on the other hand, make no effort to aid assimilation and, in fact, seem to not expect it. My negative view of the French comes from personal experience attempting to do some business and develop correspondents in the country, as I attempted in a number of European countries and a few elsewhere as well. I went into this effort with an open mind, having no real prejudices one way or another. France was the only country in which my feeble effort to cope with the native tongue was not appreciated.
    France was the only country in which every promise made was not kept. France was the only country in which attempts were made to cheat me in everyday transactions. On the other hand, I found the Dutch and Catalonians in Spain the easiest and most productive with whom to work.

    On trust of data.

    Your caution is warranted. As a Dutch friend explained (German and French businesses were his primary customers), French corporations keep three sets of books: one for the government; one for the shareholders; one for themselves.

    Protection of private property (I probably should have noted that private property in this sense is real estate and financial assets):

    Of course there are situations that are exceptions to many “rules.” But, as a basic principle, without such protection, there is no stability, thus no trust or investment, important features of a functional society. A major reason so many foreigners put their money in US investments is because they see us as a place where protection of private property is so fundamental that the risk of political upheaval and/or property confiscation as virtually nil. If you lived in eastern Europe, for example, you kept your money at home in a bottle because every few years the government or a new government or an invading government would confiscate all you had except that which was hidden in a mattress or hole in a wall. All the stabilities you mention cannot exist without the valued and enforced protection of private property. It’s much like food. Without it, not much else in life matters.


    I was fortunate to grow up in a family in which I can honestly say I never heard any person or group denigrated based on their race, ethnicity, nationality or religion – with one exception. My heritage is Welsh. My grandfather on my dad’s side was a coal miner who came to the US between 1880 and 1890 to work (and die) in a coal mine. My mother’s
    family came to farm a few years earlier. Thanks to the history between the English and the Welsh (Wales often is noted as England’s first colony), while it wasn’t blatant, there was some lack of affection for the English of which I was aware. I’ve been to Wales twice and feel more at home there than in any other foreign country (total of 16) in which I’ve traveled.

    • I find your personal views on the French more compelling. I always appreciate someone’s direct experience. I bet we could have an interesting discussion about that. It sounds like the beginning of potential understanding.

      As for me, I’m clueless. i can’t even assess what your experience might mean. I would imagine France might be like the US and UK, with diverse regional cultures, traditions, politics, and economies… but heck if I know.

      I get what you are saying about eastern Europe. That would be problematic.

      I’m not sure what all that might mean, in terms of comparisons. Any country during a time of war and/or conflict won’t be a safe place for investment and savings. That would have been true of the US from the American Revolution to the Civil War, when the economy was quite unstable with major crashes and an unreliable banking system.

      In recent history, the US is now quite stable, because our military ensures stability for much of the world, especially in terms of trade agreements and trade routes. US currency and the entire US economy is backed by the largest military in world history.

      My reason for bringing up blacks was for reasons of comparison. French unemployment rates maybe high. Then again, so are the unemployment rates for blacks and many other minorities, not to mention for Southern and Appalachian whites. It’s not quite as bad as eastern Europe, but there is a similar problem of not trusting a system that has historically been against them. It isn’t conducive to a mindset of investment and savings.

      • I suspect a problem in eastern Europe is that it never embraced capitalism (or socialized capitalism) as did the West. As a result, respect for private property was never a fundamental notion. And the tribal conflicts (as opposed to ethnic conflicts) never disappeared as they did in the West. Thus, there was frequent turmoil and those in charge were concerned solely with power without even a pretense of concern for a greater good. Corruption is rampant by US standards and, in fact, expected, The bottom line is that trust is in sort supply, And the Communists made the situation worse because everybody was afraid they might be heard saying something that could be turned into a prosecutable offense. I may have mentioned this earlier, but the most difficult thing my Romanian daughter-in-law (now a naturalized US citizen) had to learn upon coming to the US was trust – the kind of trust most of us don’t even think about because we start with the premise that people we deal with will do what they say they will do. In Romania, the premise is that nobody will do what they say they will do. That’s not the kind of environment that encourages investors, small or large.

        Another reason for US stability over the years is that two vast oceans separate us from the rest of the world. It wasn’t until weaponry and modern modes of travel made distance less relevant did we become more involved with the rest of the world.

      • I do understand the issue of trust. I’ve given that much thought over the years, specifically in terms of a culture of trust. I have some posts about that around here.

        It is a difficult topic, as are all issues involving culture. There is a certain amount of mystery, why cultures are the way they are, why they so often persist and yet sometimes abruptly change. We simply take our own culture for granted and rarely think how it shapes us, for it is nearly impossible to think outside of one’s inherited culture.

  4. P.S. Sometimes it is inaccurate (thanks to lack of direct knowledge), often painful, frequently true, but it is wise to pay attention to criticism of our country from outsiders. Just as adjusting things as a result of comment here often is beneficial, so it may be with ideas from abroad. Some can be ignored, but others are worthy of serious consideration.

    • I do listen to outsiders. I try to listen to a variety of viewpoints, actually. Even an imperfect outsider opinion can offer useful insight, in allowing for a different take on what is otherwise too close to see clearly. Plus, there occasionally is an outsider who is able to make brilliant observations that change the way one sees the world around one. On a more amusing level, I enjoy someone like Henry Fairlie in his writings on American politics and culture.

      • Did you happen to catch Stephen Fry’s travels in America on TV? We watched it on Netflix (no longer there). Fry is an English comedian and critic. The TV series came from the book he wrote on his travels, where he visited all 50 states (except Alaska and Hawaii; he went there by plane) in a London taxi. A simplistic summary of his view (youtube has a few brief items where he responds to questions at English venues and on tv interviews) is that Americans are 1) not the raving lunatics as pictured in various ways by European intellectuals and 2) are an endlessly optimistic people as opposed to the English and other Europeans who tend to be pessimistic. The latter is reflected, he says, by the fact that Americans love winners whereas Europeans tend to embrace losers. However, I believe the optimism of some of us has been struggling a bit of late.

      • No. I haven’t watched that show. Nor have I read Fry’s book. If I get a chance, I’ll check it out. I’m not sure about American optimism. There is something to that, but I think non-Americans misunderstand it. Americans are equal parts idealistic and cynical, for the two go together.

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