Opinion: We are smack in the middle of a new Gilded Age

Golden Age, Gilded Age—there’s a world of difference. The contrast matters today as much as it did when the coal, steel and manufacturing barons ran the show. In our time the barons have new names and different industries, but they still use the same playbook.

Mark Twain coined the term “Gilded Age” in 1873 to describe the rampant greed and political corruption that characterized post-Civil War America. He put a satirical spin on “Golden Age” to describe its opposite: a period in which the world may appear golden, but only because a thin layer of gold leaf hides the foulness lurking beneath. In the financially booming era Twain wrote about, the gilding hid brutal and largely unregulated business practices, government rot, and crushing poverty within the working class.

Direct parallels can be drawn between that era and current times. From the splendor to the squalor, we are smack in the middle of America’s Second Gilded Age. Inventions such as the telephone, light bulb, phonograph, typewriter, moving pictures, and tungsten steel defined life-changing innovation in the first Gilded Age and produced a handful of magnates who controlled these industries. The new Gilded Age has brought personal computers, the iPhone, email, GPS, video games, artificial intelligence (AI), and electric cars—and its own group of moguls. A small number of companies control society’s basics like energy, communication, and the internet. And nothing reeks of a New Gilded Age like big tech companies’ massive profits, monopolization, and putting profits before people, including the recent race to roll out generative AI.

Tech watchers call the world-changing impact of generative AI equal to the introduction of the internet itself. And once again, big tech’s size and resources prevent smaller players from carving out a place in this new chapter of digital innovation. Generative AI (machine learning that creates new content instead of simply dishing up what’s already on the Internet) is dominated by a handful of power brokers whose influence keeps them on top.

The robber barons of the Gilded Age built their fortunes in factories, railroads, coal, oil, and steel by taking advantage of technological advances and paying low wages to the surplus of workers in the working class. They operated with little government regulation and used the influence of amenable politicians to create financially beneficial deals. This hasn’t changed.

Big tech companies play by their own rules, outpace regulation, and use their fortunes to lobby lawmakers to keep it that way. With the advent of widespread applications of generative AI, the booming power of the big tech barons will only expand.

The wealth gap also continues. By the last two decades of the 1800s, the richest 4,000 families in the United States, representing less than 1% of the population, had about as much wealth as the other 11.6 million familiesaltogether. In 2023, the wealth of the richest Americans—the “1%”—is about $44 trillion, roughlyone-third of the entire nation’s wealth.

The squalor factor has not budged, either. The U.S. Census reports that 11.6%, or 37.9 million Americans, live in poverty. Aboutone third of them, or 1 in 7, are children.

Power and special benefits for a handful of industries, gaping wealth inequities, and obscene poverty. 2023 is 1873 all over again.

Are we paying attention to these stunning and dangerous parallels as we cycle through 2023’s version of the Gilded Age? Mark Twain said, “History doesn’t repeat itself, but it often rhymes.” We have written an epic poem from the original Gilded Age to the one we are living through now, but apparently, we haven’t learned the lessons history has tried to teach us.

Hoffman is a Fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School of Government and author of Your Data, Their Billions. She wrote this commentary for the American-Statesman.

This article originally appeared on Austin American-Statesman: Opinion: We are smack in the middle of a new Gilded Age