Industrial Capitalism to Gilded Age

Prior to the Civil War, industrialisation was largely restricted to the North. Even in that north, only a small number of employees worked in factories and were paid wages. However, the advent of new technology changed the lives of people in the North. The population grew, which affected the economy and led to goods being produced not just for survival, but also for profit. Farmers began to produce grain for shipment to the city. In both the north and the south, agriculture was the main industry. Industrialisation introduced in the north meant that processes that used to take hours by craftsmen were phenomenally shortened by machines. Hence, people with craftsman’s skills gradually disappeared and employers sought to increase efficiency by having more workers do simple jobs in their factories. For employers, the lower the wages of workers, the higher the net profit. Hence, workers worked 12-14 hours every day for a pittance. Although they were free labourers working for wages, their treatment was probably almost the same as that of slaves. Ironically, however, industry developed because workers worked in such an environment. According to A very short introduction of American Business History written by Walter Friedman, he wrote that the textile industry became a major industry in the USA, enabling mass production that was once impossible. The gains led to further investment and new entrants into the industry, and market competition intensified.

After the Civil War, new energy sources such as oil, coal and electricity, materials such as steel and rubber, and means of transport such as the Panama Canal and the transcontinental railway emerged, and joint-stock companies with modern management methods appeared as governments began to protect trade. These companies made fortunes in the financial and oil markets, creating conglomerates such as Carnegie in steel, Rockefeller in oil and Morgan in finance. Each market was monopolised by these conglomerates. In addition, many slaves freed by the Emancipation Proclamation during the Civil War did not receive redistribution of land, so they became sharecroppers again, working under contract to their employers. This abolished the traditional institution of slavery, but the reality was that slavish contracts with employers continued and agricultural production did not fall.