- Historic Sites
How Capitalism Survived The Twentieth Century
One hundred years ago many thoughtful people predicted the decline and disappearance of capitalism. What happened to make their prophecy wrong?
November 1987 | Volume 38, Issue 7
In 1894, in the middle of the desperate decade that future generations would idiotically describe as the “Gay Nineties,” William Dean Howells, America’s premier man of letters, returned to the attack on capitalism with his vision of a Utopia called Altruria. Once upon a time in Altruria, Howells wrote, there had been an “Accumulation [which] treated the proletariat like a deadly enemy...left their families to starve...sought every chance to reduce wages.” These evils had been remedied in a single blow, at the ballot box. “All transportation was taken into the hands of the political government...which showed itself immaculately pure, compared with the Accumulation. The common ownership of mines necessarily followed, with an allotment of lands to anyone who wished to live by tilling the land, but not a foot of the land was remitted to private hands for purposes of selfish pleasure or the exclusion of any other from the landscape.” Once the production of “fraudulent wares” had been eliminated, “one hour sufficed where twelve hours were needed before, and the operatives were released to the happy labor of the fields, where no one with us toils killingly, from dawn till dusk, but does only as much work as is needed to keep the body in health.” By cutting off and presumably somehow moving away “a peninsula which kept the equatorial current from making it to our shores,” the new socialist government even changed the climate of the southeast coast from one of “antarctic rigor” to one like that of “your Mediterranean countries.”
The year of Howells’s publication was also the year of the Commonweal of Christ—Coxey’s Army—which marched to Washington, seeking a redress of its grievances, which were poverty and unemployment, only to be arrested for trespassing on the Capitol grounds. And 1894 was also the year when William Jennings Bryan brought the fears and hopes of the suffering poor to conventional American political life. Having failed in his effort to be chosen as a U.S. senator by the Nebraska legislature (for those were the days before the popular election of senators), Bryan spent 1895 and much of 1896 traveling around the country—just as the candidates for the Presidency do today—lecturing for good fees at the chautauquas, pressing the flesh, and doubtless noting, at least in passing, the despair of the impoverished. In 1896 he yelled from the podium at the Democratic National Convention that he would not permit the nation’s money interests to crucify mankind upon a cross of gold, and presently he was running against William McKinley in the first of what would be three losing campaigns for the Presidency. Bryan was no socialist. He was not, in truth, much of anything—“silver tongue in a big mouth,” John Dos Passos wrote savagely—but he saw the financial and commodities markets as deflationary devices by which poor people were squeezed so that the rich could wax even fatter.
The capitalists of the turn of the century were, ironically, by no means enamored of economic organization that left prices to be set in a market. They did not want government control, but they still wanted control—by themselves. The twenty years after Bellamy’s book were the age of the great trusts, combining railroads and steel mills and petroleum producers to put a stop to “destructive competition.” Approving words about the idea of a free market were most likely to come from outside the economic context—for example, from liberal theoreticians like Supreme Court Justice Oliver Wendell Holmes, Jr., who thought “competition of the market” was the best procedure for determining even the fate of “fighting faiths.” For businessmen and most people, however, the world was divided into price setters and price takers. Free markets made people price takers (they were stuck with whatever someone thought the traffic could bear), and if possible, everyone wanted to be a price setter. That was safer and more comfortable as well as more profitable, especially in a time of falling prices. Farmers today will give chapter and verse. What the visionary intellectual and philosopher kings found best of all, of course, was the idea of a world where all this haggling would stop. “Socialists,” Bernard Shaw explained, “propose to secure goods for everyone at cost price by nationalizing the industries which produce them.”
Eugene Debs, leader of the first American railway union organized as an industrywide union rather than as a craft union, cut his eyeteeth on politics in the Bryan campaign and two years later announced himself a convert to socialism. He ran for President five times, receiving almost a million votes in 1920 (when his campaigning was greatly restricted because he was in jail).