Elizabeth Warren on the Second Gilded Age

Editor’s Note: This article previously appeared in a different format as part of The Atlantic’s Notes section, retired in 2021.
Pro-suffrage cartoon by Hy Mayer in Puck, in 1915. That was during the Progressive wave that followed the original Gilded Age. (Wikimedia)

This afternoon at the annual conference of New America, in Washington, I heard Sen. Elizabeth Warren give a speech about how to deal with the economic dislocations of the “gig economy.”

The text is here (in PDF), and it’s actually worth reading. “Actually” in that it was neither just a bleat/complaint about the injustices of the new tech economy nor a simple assurance that technology and innovation will solve all the problems they create. (Ie, that the long-term arc of creative destruction will always bend toward greater creativity.)

Instead Warren addressed the question I said was on my mind, at the end of my March issue article. That was the Second Gilded Age question: if the dislocations, the inequalities, the injustices, but also the possibilities of this era of high-speed technical change parallel those of 125 years ago, is there any hope or guidance to be drawn from the responses of the Progressive era through the New Deal?

Lots of scholars and writers have taken their cracks as the topic — one obvious example is Paul Starr’s “How Gilded Ages End” — always with proper cautions that history never quite repeats itself. Without belaboring the historiography, Elizabeth Warren made the main, simple point: technology creates new wealth and opportunities, and vibrant economies have always embraced it. But policy shapes how the wealth is shared, and how the inevitable pain and damage of rapid change can be minimized. As she put it:

It’s exciting—and very hip—to talk about Uber and Lyft and Taskrabbit, but the promise and risks of these companies isn’t new. For centuries, technological advances have helped create new wealth and have increased GDP. But it is policy – rules and regulations – that will determine whether workers have a meaningful opportunity to share in that new wealth.

A century ago, the industrial revolution radically altered the American economy. Millions moved from farms to factories. These sweeping changes in our economy generated enormous wealth.

They also wreaked havoc on workers and their families. Workplaces were monstrously unsafe. Wages were paltry and hours were grueling.
America’s response wasn’t to abandon the technological innovations and improvements of the industrial revolution. We didn’t send everyone back to their farms. No. Instead, we came together, and through our government we changed public policies to adapt to a changing economy – to keep the good and get rid of much of the bad.

The list of new laws and regulations was long: A minimum wage. Workplace safety. Workers compensation. Child labor laws. The 40-hour workweek. Social Security. The right to unionize.

But each of these changes made a profound difference. They put guardrails around the ability of giant corporations to exploit workers to generate additional profits at any cost. They helped make sure that part of the increased wealth generated by innovation would be used to build a strong middle class.

Warren’s speech doesn’t answer all these questions, but at least it’s a beginning. It’s worth reading and using as a benchmark for what the U.S. might do, if it wanted to do something to maximize the creativity and minimize the destruction of this era.

Bonus, on why national-level policy would be useful:

Wherever possible, [we should] streamline laws at the federal level so that employers operating across state lines don’t have to jump through a crazy number of hoops when they employ workers from more than one state. A small business owner with workers in several states shouldn’t have to spend her valuable time struggling to master different state regulations.

After Warren, Senator Jeff Flake, of Arizona, also spoke at the conference. I don’t see any version of his speech online any place right now, but if you come across it sometime: please compare his version of a “response” to today’s challenges with Warren’s.

***

For the record: #1, I’m involved with New America, having been the chairman of its board for its first eight years of existence (and still being on the board). #2, one of my sons is a director at Uber.