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CONTROVERSIES Over the Role of GOVERNMENT in the Gilded Age [APUSH Review 6.12] Period 6: 1865-1898 - YouTube
Channel: Heimler's History
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Well hey there and welcome back to Heimler’s
History. So we’ve been going through Unit 6
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of the AP U.S. History curriculum and in
this video it’s time to talk about the
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controversies over the role of government
during the Gilded Age, and that means it’s
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about to get saucy. So if you’re ready to get
them brain cows milked, then let's get to it.
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So all through this unit we’ve been talking
about the rise of industry in America and
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how that changed the production of goods and
the demographics of cities and the structure
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of classes. Long story short, the rise of
industry was a big deal during the Gilded
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Age. And one of the most pointed and fierce
debates that occurred in this time was with
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respect to the role government should take in
relationship to all these changing realities.
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And the truth is, this debate about the role
of the federal government in the economy is
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one that stretches back to the founding
of the country. That was one of the main
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fights between Alexander Hamilton and Thomas
Jefferson with respect to the National Bank. It
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reared its head again when debates over Henry
Clay’s American System erupted in Congress,
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and they argued fiercely about whether the
government ought to sponsor infrastructure
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improvements like roads and canals. And I could
name many other examples, but the point is,
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controversies over the role of government in
the economy is not a new thing in this period.
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So in the last few videos I’ve mentioned a
lot of realities that argued FOR government
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intervention in business, things like unfair
labor practices and the growing gap between
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the rich and the poor. So in this video I’m
going to focus on the other side of the debate,
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namely, the arguments that were being
made against government regulation.
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So in order to get into this, let’s remind
ourselves about the dominant economic ideology
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during this period, namely, laissez-faire
economics. Now laissez-faire is French for
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“leave alone,” or “let alone,” or whatever, some
French speaker always corrects me in the comments.
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[Call Matt, what does laissez faire mean?] Anyway
this way of understanding economics is this:
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just leave everything alone and
eventually all shall be well.
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Now the industrialists and the politicians
who supported them didn’t make up this way
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of thinking. It actually goes back to 1776 when
Adam Smith published The Wealth of Nations. His
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argument was that economies are best governed by
the laws of supply and demand, and that if you
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just let people make decisions in their own best
interest then the invisible hand of the market
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will always flourish best under those conditions
and therefore lead to the flourishing of society.
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Now the problem is that while Gilded Age
politicians and tycoons were spouting off
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about Adam Smith and the invisible hand,
they apparently forgot that the scenario
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they created was nothing like what Adam Smith
envisioned. One vital ingredient for a healthy
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economy in Smith’s view is competition, but
these business leaders had so consolidated
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power in their respective industries that
competition vanished like a fart in the wind.
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But that didn’t keep these folks from arguing
against government regulation in business or
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the economy as a whole. And that was true
even during economic downturns. During the
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severe Panic of 1893 President Grover Cleveland
largely did nothing to alleviate the economic
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disaster for many Americans who ended up
standing in bread lines to feed themselves.
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And even when the federal government did get
involved, they did so half-heartedly. For example,
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in 1886 the Supreme Court handed down
a decision in a case whose name you
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don’t really need to know, but the decision
basically said that states couldn’t regulate
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railroads. And so the government created
a federal agency called the Interstate
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Commerce Commission to ensure that states
didn’t violate this law. But the ICC was
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deeply underfunded and therefore had no
real power to meddle in states’ affairs.
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So all that to say, laissez faire was the
rule of the game during the Gilded Age,
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both for enterprise and for
politics. However, the government
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DID get involved when gains for business
and the economy could be made. For example,
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business leaders worked with Republican
politicians to expand markets overseas by
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means of diplomacy. Now this will come into focus
very clearly at the start of the next period,
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so here I’ll just mention a couple
of examples of how this played out.
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First, laissez-faire capitalists strongly
supported the overthrow of the Hawaiian
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monarchy in 1893. Eventually that would lead to
the U.S. annexing the islands in 1898 and that
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meant new markets were opened. Second, was the
Open Door Policy established between China and
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the United States in 1899-1900. Essentially
it just advocated for equal trading rights
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in all the ports in China which were being
rapidly consumed by European powers. Again,
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we’ll get way more into that in
the next period, but for now,
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you just need to understand that during the
Gilded Age the government DID get involved
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in business when the outcome looked to be good
economically for them. However, the government
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almost never got involved in any meaningful
way when it came to regulating business.
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OKay, that’s what you need to know about Unit
6 Topic 12 of the AP US History Curriculum.
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If you need help getting an A in your
class and a five on your exam in May,
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then you might want to click here and
let the invisible hand guide you towards
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my Ultimate Review Packet. If you want
me to keep making these videos for you,
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then the way you can let me know that is by
subscribing, and I shall oblige. Heimler out.
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