The return of the gilded age!

Recently, Apple Inc, made history by becoming the first company in the world to reach $2 trillion valuation. This is greater than the GDP of 180 countries in the world, which includes some major players like Russia, S.Korea and Canada. No company has achieved this in the history of capitalism. Naturally, Wall Street is happy and so are the proponents of the supremacy of capitalism and USA!

Indeed, Apple is one of the finest companies in the world. Its celebrated products such as Iphone and Macbook are revered worldwide. It is said that once we use apple devices, it is very difficult to replace them with any other ones. So much is the glamour, sophistication and cult-like following that makes Apple the world’s most unique company. Indeed, Steve Jobs legacy coupled with his charisma have dominated the world in making the brand Apple, the most trusted and richest. I wouldn’t be surprised if the kindergarteners today will soon remember Apple as a phone, and not a fruit!

Just like Apple, there are other behemoths and giants in the silicon valley, which also have risen like Apple ( will soon match the $2 Tn valuation) They are commonly known as Big Five in silicon valley. They include Amazon, Google, Microsoft and Facebook, in addition to Apple. All of them dominate ( they actually monopolize) certain products in their respective fields. Amazon in e-commerce, Google in search engine, Microsoft in Windows Suite software, and Facebook in social media. Just like Apple, each of them are so big that their competitors simply do not exist, or are swallowed by them.


This reminds me of the gilded age in America which happened during 1870’s to early 1900’s. It is surprising that a century later, all these companies have also formed a second gilded age since 1970’s to 2010’s decade. Microsoft and Apple are the oldest in this group, being formed in 1975 and 1976 respectively. Then, Amazon, Google and Facebook came in 1994, 1998 and 2004 accordingly. By the end of 2010’s decade, all five of them represent the America in the world. Before America was known for Ford, Mcdonalds, Coke, Harley-Davidson and IBM. But today, its just Apple, Facebook, Microsoft, Google and Amazon, that’s it!

Now, if we look back to the first gilded age, the five companies which dominated America were Railroads owned by Vanderbilt, Standard Oil, Carnegie Steel, J P Morgan bank and General Electric. The Vanderbilts were known as the “Commodore”, and dominated the steamship and railroad industry. The Standard Oil was formed in 1870 and made its founder John D Rockefeller, one of the richest man in America. He was quite notorious at that time, and eventually, his empire was broken with the Sherman Antitrust act. Similar story goes with today’s Microsoft which also had to suffer being a monopoly, and had to face antitrust charges in 1998.

ROBBER BARONS. John D. Rockefeller. Cornelius Vanderbilt. Andrew Carnegie. J. P. Morgan. Standard Oil. Rail Road. & Shipping. Financier & Banker. Pittsburgh s Carnegie Steel. GE & US Steel.Source

Carnegie Steel (later US steel) was formed in 1892, and its founder Andrew Carnegie was revered for his philanthropy later. His company was brought by J P Morgan who was known as the banker of America. He is also known for his consolidation efforts just like Google has done today. General Electric was formed in 1892 as well and remained the backbone of the US electric industry. It was Thomas Edison who had revolutionized with the invention of incandescent light bulb, phonograph and early motion picture cameras. I find GE to be synonymous with Google of that era. This is because just as Google have revolutionized the information age with its search engine and bringing information at the fingertips, similarly the electric bulb and many related inventions such as AC generator etc shed light over darkness in those times.

Also, today just as Elon Musk have carved his name in the history as one of the greatest entrepreneurs with its legendary “Tesla” electric car company, so was the history created by Ford in its heyday in 1900’s and 1910’s, when he founded Ford Motor company back in 1903. Both stand as titans of automotive industry.

The historical context for both the times is synchronous. Before the first gilded age began, it was the Civil war from 1861 to 1865 which had shattered America due to the war between the Northern Union vs Southern separatists Confederacy. But after the war and assassination of Abraham Lincoln, things slowed down and the country started to progress. The next 30 so years became known was the most progressive years for American economy. As per Edward T O’Donnell, between 1860 and 1900, U.S. factory output soared from $1.9 billion to $13 billion, an increase of nearly 600 percent. By 1900 the U.S. boasted the most powerful industrial economy in the world. This is also known as the Second Industrial revolution.

Similarly, America saw the Civil rights and Vietnam war protests during 1960’s ( history repeats itself..), and with the assassination of JFK, Bobby Kennedy and Martin Luther King, things again started to change slowly. Politics became sub-par and was replaced by the need for new industries and technologies. Thus began the era of computers, telecommunication, internet, e-commerce and later social media. Hence, this became known as the Third industrial revolution, or Information age.

Just as the captains of industry in gilded age had built mansions in New York Long island, Rhode Island and even the famous Biltmore Estate in Asheville, NC, today we see similar mansions in Bel Air, California and Jackson Hole, Wyoming, known as the home of billionaires. The first gilded age led to the enormous development and wealth creation in New York, so did this new age bring in Silicon valley and Seattle.

The economic inequality also is seen to be repeated during both the times. Never before had so few people accumulated such vast wealth in such a short span of time. Industrialists like John D. Rockefeller and Andrew Carnegie and financiers like J. P. Morgan and Jay Gould amassed stupendous fortunes. By 1890, the top 1 percent of the U.S. population owned 51 percent of all wealth. The top 12 percent owned an astounding 86 percent. The lower 44 percent of U.S. population—almost half the country—owned just 1.2 percent. Today, according to the Washington Post, the wealthiest 1 percent of American households own 40 percent of the country’s wealth. While the top 10% represent 70% of all US wealth. Though this is still better as compared to the first gilded age, when the richest were called “Robber-Barrons”, but still the inequality is wide enough to be concerned of the over-domination of these few silicon valley moguls and the riches they have acquired.

Though the ways of wealth creation have changed and it would be unwise to compare today’s silicon valley entrepreneurs with the robber-barrons. We see more philanthropy being done by today’s billionaires then ever. Bill Gates and Mark Zuckerberg have started foundations to donate vast amounts of their wealth for the concern of third world issues such as poverty, education and environment. But still, both the age industrialists brought enormous change in the American economy. Even though John D consolidated his empire by grabbing and capturing all the competitor oil companies, but this brought down the oil prices and common people could afford to use refining oil. The price of oil came down from 58 cents to 8 cents a gallon from 1865 to 1885. John D wrote to one of his partners “Let the good work go on. We must ever remember we are refining oil for the poor man and he must have it cheap and good.”. Though this cannot stand as excuse for his ruthless predatory capitalism to destroy his competitors, but on a wide scale, it helped the people and economy. Same can be seen today. Not many years back, we had to pay for calls and messaging service. But with Facebook and its acquisition of WhatsApp, it changed the entire picture. Today, we can have audio, video calls and messaging ( commonly called “WhatsApping”) entirely free with high quality service. Even though facebook is seen as a monopoly, but this consolidation has helped people to save money.

We can also see the emergence of both the gilded ages brought in huge influx of immigrants from abroad due to rise in economic wealth, new employment opportunities and development of technology. The immigration from Europe was the highest during 1900’s, at the peak of gilded age. Same can be seen today, when the need for skilled & cheap labor led to large scale migration of software engineers from India and China since 1990’s decade. Also, we see that due to this large migration, the locals suffered from job loss and which thereby led to anti-immigration sentiments in 1920’s, and same has happened recently with the election of Donald Trump in 2016.

Finally, there are both advantages and disadvantages of the gilded age. The positive outcomes seen during both the times are the development of technology rapidly, with job creation and making America the leader of technology in the world. They had ameliorated the standard of living and also led to a new generation of entrepreneurs. We see that all the silicon valley moguls from Steve Jobs to Elon Musk, came from humble backgrounds. Same had happened during the first gilded age when most of the captains of industry like John D and Andrew Carnegie were born in poor families. So, this proves that America has always provided the opportunity for an entire new generation to rise and become the richest using technology and innovation.

But this happens only for a specific time period. We see that 1870’s to 1900’s was the time when the room for new businessmen and industrialists was the highest. But after 1910’s, when the economy became over-dominated by these handful of companies, it became almost impossible for new industrialists to venture out. Hence, we see the deacdes from 1910’s to 1960’s were mired with too much corruption, poliitcs, mafia and world wars as well. Ofcourse, the world politics had also changed a lot after 1910’s. But we see that the golden age of industries which existed during 1870’s till 1900’s did not last later.

Then, it was only from 1980’s again that the opportunity and room for new, fresh entrepreneurs was created. And so this time was cleverly captured by Bill Gates, Steve Jobs, Jeff Bezos, Elon Musk, Mark Zuckerberg etc to establish industries and dominate the business. And now after last 4 decades of over-domination by these companies, we see there is not much room for new and innovative companies to dominate. Either they will be buyed out by these giants or they will become extinct due to monopoly and competition. That is why we see no competitors for Amazon, Facebook, Google and Apple in America.

Hence, we see that even though both gilded ages follow the underlying concepts of free capitalism and markets, but their domination leads to predatory capitalism and monopolized markets later. And the same is happening today! The rise of economic inequality coupled with job loss, stiff competition and reduced wages are all the after effects of this new gilded age. There is nothing wrong for the companies to innovate and prosper, but the over-domination and monopoly is bad for the economy and people. Maybe, just like the wave of socialism and communism ushered in after the first gilded age, same might happen in coming years when a new wave of socialism might emerge! Time will render all the answers….

Author: Abhi

Hello, this is Abhishek. I am an Electrical Engineer by education, and worked for an Energy Management company in Atlanta, USA. After staying for 5 years in United States, I have moved back to my country, India. Besides work, I am a bibliophile and enjoys reading about history, current affairs, and biographies. I practice ‘Sudarshan Kriya Yoga‘ meditation and volunteer for a NGO, Art of Living. I am a vegetarian, and also a fitness enthusiast. I intend to work for spreading awareness about Cancer. Finally, I enjoy writing and I hope to integrate this interest into my career with more experience. Please like, share and subscribe to my blog. Thank you for visiting!

3 thoughts on “The return of the gilded age!”

  1. Great post. I was checking continuously this blog and I’m
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    Liked by 1 person

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