By: Karina Canul
Throughout the ages, the super wealthy have played a huge role in materialism in America. The super wealthy were the first billionaires and they were the first to have the luxury to spend freely on whatever they wanted, whenever they wanted. They pioneered such industries as steel, railroads, oil, and the stock market, in order to become some of the most powerful people in America. Materialism in the gilded age, the roaring 20’s, the 50’s, and the 80’s are prime examples of the influence the wealthy have had on American society.
One of the first times that materialism became evident in the US was the Gilded Age and the super wealthy were right at the forefront. The Gilded Age took place during 1865-1901. There was uplift in ethnic diversity that caused a great industrial and population expansion. Farmlands in the west grew and there was a rapid growth in railroads, small factories, banks, stores, mines, and other family owned enterprises. This expansion became known as the Second Industrial Revolution because big industrialists began to take people in to work in their factories. One of these industrialists was J.D Rockefeller. He was able to gain his large fortune by milking the oil industry. He kept oil stocks and as gasoline grew in importance his wealth soared and he became the first billionaire and the richest man in the world. He also defined the structure of modern philanthropy, someone who donates their time, money, or reputation to a charitable cause. Another great industrialist during the Gilded Age was Cornelius Vanderbilt. Vanderbilt left school at the age of 11 and went on to build a shipping and railroad empire that would make him one of the richest men in the world. The Vanderbilt’s were not shy, however, about flaunting their wealth. They were known to throw lavish parties in which guests could dig through large bowels of jewels, keeping whatever treasures suited them. Perhaps the mightiest of all of these wealthy businessmen was Andrew Carnegie. He believed whole heartedly in Social Darwinism and soon became known as the “gospel of wealth”. Carnegie thought that those who profited from society owed something in return. Many of these industrialists thrived due to Social Darwinism, which paralleled Laissez Faire (opposed any government programs that interfered with businesses). The Gilded Age was a time of great wealth and great materialism.
Materialism continued to progress in the 1920’s and so did the super wealthy. During the war the country’s economy went up. Blue collar jobs such as metal trades, ship building, and meat packing rose about 20 percent. Stockholders in large corporations saw enormous profits and in some cases a 1000 percent increase in their stock over 2 years. In 1927 the American industries flourished. Automobiles became very popular and because of this new industries needed to be established, for example, gas stations, hotels, paved roads, etc. One of the pioneers of the automotive industry was Henry Ford, who went on to become one of the world’s richest men during that century. The airplane industry also took off after first starting out as mail carriers and then moving into commercial use. Another event that helped people become super wealthy in the 20’swas prohibition. Through prohibition, speakeasies became popular and bootleggers began to make their own fortunes. However, the greatest money makers were those working in electric appliances and installment plans. People were able to buy things on credit and the banks and companies benefited from the interest.
Although the wealthy had prospered in the past, the 1950’s were a time when the middle class grew and the wealthy suffered. During the 1950’s the government depended on the super wealthy for economical help. The people who were able to attain great wealth started to shift from prosperous businessmen to the Hollywood elite. This included people such as Humphrey Bogart, Frank Sinatra, Dean Martin, Sammy Davis Jr., and Marilyn Monroe. Although they made ridiculous sums of money, much of it was taken away by the federal government who taxed them 91% of their income. A two income family (average middle class family) paid only about a 28% federal income tax. Many middle class families argued that the wealthy should pay the bulk of federal income taxes in an attempt to spare the poor, and as a result, the wealthy were softened. During this time, Fortune Magazine estimated that 250 individuals were worth 50 million dollars or more and most of these people inherited the money, instantly putting them among the wealthiest in American society. These wealthy people only made up one percent of the US population, yet they were paying more than half of the federal taxes for everyone else.
During the 1980’s, the super-wealthy thrived, giving new meaning to the word “billionaire”. Reaganomics played a large role in giving money back to the rich. Reagan reverted back to supply side economics and he believed that if people paid fewer income taxes, they would save more money. He believed this would work through the “trickle down theory” in which money from the upper classes would eventually spread down to the needs of the lower classes. Congress proceeded to lower income taxes by 25% and as a result, the wealthy flourished. Contrary to what Reagan believed, the “trickle down theory” ended up only benefiting the super wealthy. In 1983 there was a huge economic upturn as consumers went on a massive spending spree. Faith in the economy was boosted by tax cuts, decreased interest rates, and lower inflation, all of which benefited the wealthy. People began making large fortunes dealing in industries such as real estate, the stock market, and technology. Donald Trump made his fortune of about 2 billion dollars by dealing in influential real estate. Another businessman, Michael Milken, earned between 200 million to 550 million dollars a year at the peak of his success as an executive at investment bank Drexel Burnham Lambart Ink. Milken used “high yield junk bonds” to finance his corporations, mergers, and acquisitions. The 1980’s were all about getting rich quick, no matter what it cost to get there. Excess and the “me, me, me” attitude that defined this decade, is also what destroyed it.
The Gilded Age:
http://en.wikipedia.org/wiki/Gilded_Age Gives important information about all aspects of the gilded age.
http://www.pbs.org/wgbh/amex/carnegie/peopleevents/pande01.html Biography of Andrew Carnegie and look into how he was able to become the richest man in the world.
http://www.u-s-history.com/pages/h845.html Look at Cornelius Vanderbilt and his shipping and railroad empire.
http://inventors.about.com/library/inventors/blford.htm Information on Henry ford and how he revolutionized the automotive industry by creating the assembly line.
http://mustech.mus.georgiasouthern.edu/html/rrepp/research/Exemplary%20Practices/Hononegah/prohibition/speakeasies-s.htm Information on speakeasies, prohibition, and bootleggers, also gives additional sites.
http://en.wikipedia.org/wiki/Humphrey_Bogart Information on the life and legacy of Humphrey Bogart, also gives good information about the 50’s.
http://www.answers.com/Michael%20Milken Information on the rise and fall of Michael Milken while discussing important details about how he was able to make his millions.
http://www.answers.com/Donald%20Trump Information on how Donald Trump was able to make his fortunes through new industries like real estate.
http://www.investopedia.com/terms/r/reaganomics.asp Explains the pros and cons of Reaganomics and what it did for the economy in the 1980’s.