American industrialization began in the textile factories of New England during the 1820s but grew explosively in the half century following the Civil War (1861–1865) (see Map 17.3). The country’s huge size, the ready availability of natural resources, its expanding domestic market, and its relative political stability combined to make the United States the world’s leading industrial power by 1914. At that time, it produced 36 percent of the world’s manufactured goods, compared to 16 percent for Germany, 14 percent for Great Britain, and 6 percent for France. Furthermore, U.S. industrialization was closely linked to that of Europe. About one-third of the capital investment that financed its remarkable growth came from British, French, and German capitalists. But unlike Latin America, which also received much foreign investment, the United States was able to use those funds to generate an independent Industrial Revolution of its own.

As in other second-wave industrializing countries, the U.S. government played an important role, though less directly than in Germany or Japan. Tax breaks, huge grants of public land to the railroad companies, laws enabling the easy formation of corporations, and the absence of much overt regulation of industry all fostered the rise of very large business enterprises. The U.S. Steel Corporation, for example, by 1901 had an annual budget three times the size of the federal government. In this respect, the United States followed the pattern of Germany but differed from that of France and Britain, where family businesses still predominated.

The United States also pioneered techniques of mass production, using interchangeable parts, the assembly line, and “scientific management” to produce for a mass market. The nation’s advertising agencies, Sears Roebuck’s and Montgomery Ward’s mail-order catalogs, and urban department stores generated a middle-class “culture of consumption.” When the industrialist Henry Ford in the early twentieth century began producing the Model T at a price that many ordinary people could afford, he famously declared: “I am going to democratize the automobile.” More so than in Europe, with its aristocratic traditions, self-made American industrialists of fabulous wealth such as Henry Ford, Andrew Carnegie, and John D. Rockefeller became cultural heroes, widely admired as models of what anyone could achieve with daring and hard work in a land of endless opportunity.

Nevertheless, well before the first Model T rolled off the assembly line, serious social divisions of a kind common to European industrial societies mounted. Preindustrial America had boasted of a relative social equality, quite unlike that of Europe, but by the end of the nineteenth century, a widening gap separated the classes. In Carnegie’s Homestead steel plant near Pittsburgh, employees worked every day except Christmas and the Fourth of July, often for twelve hours a day. In Manhattan, where millions of European immigrants disembarked, many lived in five- or six-story buildings with four families and two toilets on each floor. In every large city, such conditions prevailed close by the mansions of elite neighborhoods. To some, the contrast was a betrayal of American ideals, while others saw it as a natural outcome of competition and “the survival of the fittest.”

As elsewhere, such conditions generated much labor protest, the formation of unions, and strikes, sometimes leading to violence. In 1877, when the eastern railroads announced a 10 percent wage cut for their workers, strikers disrupted rail service across the eastern half of the country, smashed equipment, and rioted. Both state militias and federal troops were called out to put down the movement. Class consciousness and class conflict were intense in the industrial America of the late nineteenth and early twentieth centuries.

Unlike many European countries, however, no major political party emerged in the United States to represent the interests of the working class. Nor did the ideas of socialism, and especially Marxism, appeal to American workers nearly as much as they did to European laborers. At its high point, the Socialist Party of America garnered just 6 percent of the vote for its presidential candidate in the 1912 election, whereas socialists at the time held more seats in Germany’s Parliament than any other party. Even in the depths of the Great Depression of the 1930s, no major socialist movement emerged to champion American workers. How might we explain this distinctive feature of American industrial development?

One answer lies in the relative conservatism of major American union organizations, especially the American Federation of Labor. Its focus on skilled workers excluded the more radical unskilled laborers, and its refusal to align with any party limited its influence in the political arena. Furthermore, massive immigration from Europe, beginning in the 1840s, created a very diverse industrial labor force on top of the country’s sharp racial divide. This diversity contrasted sharply with the more homogeneous populations of many European countries. Catholics and Protestants; whites and blacks; English, Irish, Germans, Slavs, Jews, and Italians—such differences undermined the class solidarity of American workers, making it far more difficult to sustain class-oriented political parties and a socialist labor movement. Moreover, the country’s remarkable economic growth generated on average a higher standard of living for American workers than their European counterparts experienced. Land was cheaper, and home ownership was more available. Workers with property generally found socialism less attractive than those without. By 1910, a particularly large group of white-collar workers in sales, services, and offices outnumbered factory laborers. Their middle-class aspirations further diluted impulses toward radicalism.

But political challenges to the abuses of capitalist industrialization did arise. In the 1890s, among small farmers in the U.S. South, West, and Midwest, “populists” railed against banks, industrialists, monopolies, the existing money system, and both major political parties, all of which they thought were dominated by the corporate interests of the eastern elites. More successful, especially in the early twentieth century, were the Progressives, who pushed for specific reforms, such as wages-and-hours legislation, better sanitation standards, antitrust laws, and greater governmental intervention in the economy. Socialism, however, came to be defined as fundamentally “un-American” in a country that so valued individualism and so feared “big government.” It was a distinctive feature of the American response to industrialization.