Civilizing capitalism: “good” and “bad” greed from the enlightenment to Thorstein Veblen (1857-1929)

"As we look over the country today we see two classes of people. The excessively rich and the abject poor, and between them is a gulf ever deepening, ever widening, and the ranks of the poor are continually being recruited from a third class, the well-to-do, which class is rapidly disappearing and being absorbed by the very poor." Milford Wriarson Howard (1862-1937), in The American Plutocracy, 1895. This paper argues for important similarities between today’s economic situation and the picture painted above by Milford Howard, a member of the US Senate at the time he wrote The American Plutocracy. This was the time, the 1880s and 1890s, when a combination of Manchester Liberalism – a logical extension of Ricardian economics – and Social Darwinism – promoted by the exceedingly influential UK philosopher Herbert Spencer – threatened completely to take over economic thought and policy on both sides of the Atlantic. At the same time, the latter half of the 19th century was marred by financial crises and social unrest. The national cycles of boom and bust were not as globally synchronized as they later became, but they were frequent both in Europe and in the United States. Activist reformer Ida Tarbell probably exaggerated when she recalled that in the US “the eighties dripped with blood”, but a growing gulf between a small and opulent group of bankers and industrialists produced social unrest and bloody labour struggles. The panic on May 5, 1893 triggered the worst financial crisis in the US until then.