Lack of Government Intervention in Industry & Welfare (College Board AP® US History): Study Guide

Summary

The Gilded Age was characterized by the government’s hands-off approach to business and the welfare of its citizens. This led to a widening gap between the rich and the poor.

Laissez-faire & Social Darwinism

Laissez-faire 

• Laissez-faire means “To let alone” 

  • It reflects the US government’s economic policy of minimal interference in business during the Gilded Age

Key features of laissez-faire

• The US government maintained a “hands-off” approach, allowing businesses to operate with few regulations

• This policy benefited business leaders, who grew their wealth through monopolies

• Workers suffered due to the lack of labor protections, such as:

  • no minimum wage laws

  • dangerous working conditions

  • no limits on working hours

Effects on workers

• Underpaid workers included immigrants, women, and children who were often paid just 25% of a working man’s wages

• There was no legal limit on hours worked by employees

  • People often working 10–12 hours a day, six days a week

• The unsafe conditions led to workplace accidents, including dismemberment and death

  • There was little to no compensation for injury

  • If an injury stopped a worker from working there was no sick leave or sick pay

• Lack of job security as workers could be fired at any time with no protections or benefits

Social Darwinism 

• Social Darwinism applied Charles Darwin’s theory of evolution to society, economics, and politics

  • Promoted the idea of the “survival of the fittest” 

• Wealthy industrialists argued that their success resulted from their superior ability to adapt to rapid changes in industry and technology 

• They claimed poverty was a natural consequence of the people’s inability to adapt and compete effectively

• This idea was used to justify inequalities in wealth

  • People claimed that any welfare programs would interfere with the natural processes of society

Gospel of Wealth

• The Gospel of Wealth was an idea promoted by Andrew Carnegie

  • It presented a contrasting view of the responsibilities of wealthy people 

• The key idea was that the wealthy had a moral responsibility to use their wealth to help those less fortunate

  • Carnegie believed that philanthropy, not charity, was the best way to help poorer people

• Carnegie funded the construction of libraries, concert halls, and universities 

  • He saw education and cultural enrichment as key to empowering individuals to change their social status

• The Gospel of Wealth reflected an effort by some industrialists to address social issues

  • However, it did little to solve inequalities