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CHICAGO IN THE AGE OF CAPITAL

UNIVERSITY OF ILLINOIS PRESS

Chapter One

DURING THE WINTER OF 1869, an article in the Chicago Daily Tribune found that "in our principal thoroughfares the richly-dressed lady of the avenue magnificently sweeps by her thinly-clad sister of the alley who, with scanty clothing, hurries from her fireless garret to perform her daily fourteen hours labor for a pittance too small to pay rent and purchase sufficient food, much less comfortable raiment, for this inclement season. Worse than this, there are houseless wanderers in our streets who in vain seek for employment, and whose mode of existence is a mystery. Worst of all, there are many among us to whose dire poverty is added sickness, or, may be, they are crippled from accident, and who are entirely dependent on the charity of the public." The writer was experiencing the shock of a new social order that had emerged with amazing rapidity during the 1860s, while the country was fighting the Civil War and trying to reconstruct the South. The new social world was rooted in the transformation of the city from a commercial center into a dynamo of industrial capitalism. Ironically, it was this new Chicago that burned down two years later in October 1871, only to be rebuilt with the same amazing rapidity with which it had emerged. Despite all this change, the sense of social distance and cultural crisis communicated by this author remained.

The social order being replaced in the 1860s was that of a preindustrial commercial city. Up through the 1850s, Chicago was a gateway for the exchange of eastern manufactured goods and western primary products. Its elite were composed of merchants who were boosters, promoters, and real estate speculators; they reinvested relatively little of their profits in manufacturing or the employment of labor. Instead they invested in land and then lobbied all levels of government to build the infrastructure that would turn it into profitable real estate. In the manufacturing sector, traditional craft labor practices remained, even as more advanced production techniques, such as stationary steam engines, made inroads. The shops in which the railroads repaired their cars were the city's most advanced manufacturing establishments, and they were funded by capital from outside the city, not by local entrepreneurs. Rather than invest in industrial pursuits, Chicago's merchant trading houses focused their energies on inventing and institutionalizing the modern commercial practices, such as grain futures and standard measures of quality, which permitted them to participate in an impersonal national, and even international, market.

The preindustrial outlook of the boosters had its counterpart in the way political leaders minimized the significance of wage labor. Abraham Lincoln famously described the antebellum North as a free labor society in which no man needed to be a wage earner for his whole life: "The prudent, penniless beginner in the world, labors for wages a while, saves a surplus with which to buy tools or land, for himself; then labors on his own account another while, and at length hires another new beginner to help him. This ... is free labor—the just and generous, and prosperous system, which opens the way for all." Lincoln exaggerated the extent of social mobility, while underestimating the permanence of wage labor within the larger free labor North.

Lincoln and his fellow Republican leaders knew that wage labor posed problems for their vision of the good and prosperous society, and they sought to reconcile the two. There were two major Republican factions. In the view of those like Lincoln, who believed that ownership of productive property was vital for an independent citizenry, wage labor became a phase in an individual's life dedicated to social mobility. The other large element of opinion among Republicans stressed wage labor's dignity and freedom, even if it was a permanent condition. Countering taunts from slaveholders that northern workers were "wage slaves," they stressed the choices workers had in selecting their employers, the products they bought, and their political leaders. They also stressed the dignified family life they led.

The fast-disappearing society that Lincoln mythologized was rooted in a mode of production in which households were the prevalent economic unit, and these households were led by men who owned productive property, most commonly land but also a shop or tools. To Lincoln such men, who were neither capitalists nor laborers, constituted the "large majority" of the population in the North: "Men, with their families—wives, sons and daughters—work for themselves, on their farms, in their houses and in their shops, taking the whole product to themselves, and asking no favors of capital on the one hand, nor of hirelings or slaves on the other." Although such productive households strove to make a profit, they were not organized to accumulate capital before all other objectives, just as they occasionally hired laborers but did not derive their wealth from them. This mode of production and the social order it sustained survived the Civil War in the rural North.

But in some rural areas and especially in the cities, another mode of production began to displace this producers' order from the center of national economic life. A capitalist economy based in wage labor became predominant in Chicago during and after the Civil War, and a new bourgeoisie organized it to produce capital accumulation, reinvesting profits in transforming the production process as well as the nature of work. Compared to large eastern cities, Chicago experienced these changes somewhat later and in a more compressed period of time, accentuating their impact. The system required a permanent wage-earning working class, and the mere existence of this class posed a challenge for men of Lincoln's social vision. The working class was also a social issue for those who found permanent wage earning to be legitimate, for their justification of it presupposed a standard of living that could support a dignified family life and considerable choice in purchasing products in the market.

THE COMMERCIAL CITY, BOOSTERS, AND IMMIGRANTS

Starting as a trading post and fort, Chicago's growth accelerated in the 1830s as the national economy boomed and construction began on the Illinois and Michigan Canal. By connecting the Chicago and Illinois Rivers, the canal linked the Great Lakes and Mississippi River systems and opened much of frontier Illinois to a regional and even national market. With access to Lake Michigan, the produce of the Illinois prairie could reach the East Coast through the Erie Canal.

The Illinois and Michigan Canal also marked the beginning of massive investment in infrastructure that culminated in Chicago's becoming the railroad hub of the midcontinent. Construction on Chicago's first railroad began the year the canal was completed—1848. During the mid-1850s, investment in Chicago's railroad network profited as violence over slavery in Missouri and Kansas diverted Yankee capital from St. Louis to the Windy City. Within fifteen years, Chicago's railroads pulled both the midwestern prairie and the Great Plains into the city's economic orbit, creating the transportation infrastructure and markets for Chicago's nation-leading grain, lumber, and meatpacking industries.

The trading village of five thousand in 1840 became a significant town of thirty thousand in 1850 and a substantial city of over one hundred thousand by 1860. Within the next twenty years, Chicago literally rose from the ashes of the Great Fire of 1871 to surpass its rivals St. Louis and Cincinnati, becoming the predominant city in the Midwest and one of the leading manufacturing centers of the country. In 1880 it had a population of half a million, making it the nation's fourth largest city, and it ranked third among America's manufacturing centers, after New York and Philadelphia. America's "shock city," a sort of New World Manchester producing meat and metal instead of textiles, Chicago came to symbolize in the popular and literary imagination the fascinating and frightening future of urban industrial America.

Chicago's explosive growth presupposed the emergence of a large and prosperous rural market for the city's products and services. Based in the Midwest's family farms, this market reflected an extraordinary increase in land brought under cultivation, the emergence of profitable commercial agriculture, and the national economy's robust recovery from the depression that had begun in the late 1830s. The sheer amount of land brought under the plow in the 1850s dwarfed pervious decades, as the expansion of the railroad network carried people and the market to formerly isolated and underpopulated areas.

Even more important, however, was the contemporaneous emergence of commercial agriculture—that is, production for sale. Douglass North illustrated this change using four counties in central Illinois that the railroad made accessible in the 1850s. In that decade, their population grew by 178 percent while their production of wheat exploded by 655 percent. (The comparative figures for the whole state were 101 percent and 114 percent, respectively.) Wheat was primarily a crop for the market, which meant that the settlement of the land and the growth of commercial agriculture took place together in this decade. New uses for corn illustrated the same phenomenon: Huge amounts of corn were consumed locally to feed livestock, which presupposed the farmers' ability to ship cattle to the East on the railroad. Formerly, Illinois cattle had been driven to Ohio for fattening and shipment east. This was the economic context that fired Lincoln's enthusiasm for a free labor society rooted in productive households.

The emergence of commercial agriculture produced the income that created a huge market. Jeremy Atack and Fred Bateman calculated that in 1859 and 1860 owner-occupied farms in the Midwest earned an average of $113 per capita, with Illinois far in the lead at $165. Chicago not only transshipped and marketed the products of these farmers but also produced many of the products on which they spent their income, most obviously farm implements, such as Cyrus McCormick's famous reaper. Chicago firms were leaders in building the tools for the mechanization of agriculture that contributed the most to increasing agricultural productivity.

The import of commercial agriculture for both rural life and the history of Chicago was complex. Just because farmers produced a surplus for the market did not mean that their main economic goals were the same as meat-packers and other manufacturing capitalists in Chicago. Farming was a way of life as well as a commercial enterprise, and farmers commonly made decisions that preserved and enhanced their life on the land rather than brought them the most possible return on their investment. As Allan Kulikoff has written, farmers "attended to market demand for their products but ultimately chose to produce grain or raise hogs or cattle that could be used for family subsistence as well." One of their most important decisions was to stay in farming. Atack and Bateman's quantitative analysis of northern agriculture reinforces the findings of other historians that there was "some sort of agrarian bias among Americans that led them to become and remain farmers despite potentially better opportunities in nonfarm occupations." Capital invested elsewhere would likely have been more profitable as well: Throughout most of the nineteenth century, returns from investment in manufacturing were consistently better than in farming. Nonetheless, the substantial attractions of agrarian life compared to the city, the availability of land, and the real, though uncertain, promise of profit in the commodity markets helped keep people in agriculture.

One result was to create an enormous labor shortage in Chicago's booming economy that could only be met by immigrants. Daniel Nelson considers this phenomenon characteristic of the whole Midwest: "The classic transfer of labor from farm to factory, common to New England in the nineteenth century and the South in the twentieth, did not occur in the Midwest until the post–World War II years. As a result industrialists had to seek workers elsewhere. Midwestern factories, mines, and lumber camps became enclaves of European immigrants and their children." Another result of the rural population remaining on the land was a politics shaped by frequently disgruntled agricultural producers, who remained, in Kulikoff's terms, "janus-faced, looking backward to subsistence and the perpetuation of their farms and forward to the market exchange that made agriculture possible." Living and working in a sector of the economy still organized around households, farmers in the North often opposed and misunderstood urban workers, not only because immigrants constituted so high a proportion of the industrial working class, but also because urban laborers had different interests as full participants in a labor market. Similarly, while trying to get the highest prices for their goods in the Chicago markets, farmers resented the rewards and attractions of urban life and particularly the capital accumulators in Chicago who made so much money from them by selling their grain or slaughtering their livestock. Thus commercial farmers in the rural Midwest often entered politics wearing a populist face, shaping the political environment in which Chicago's labor movement, rooted in immigrant workers, maneuvered.

To take advantage of this huge rural market, the city needed workers, entrepreneurs, and capital, and it imported all three in great quantities. Only a minority of workers came from Chicago's hinterland; the overwhelming majority arrived from abroad. Figure 2 illustrates the trends in nativity among Chicago's workers. Between 1850 and 1860 the percentage of the foreign-born in Chicago's working class rose from 70 to 80 percent, although over the next two decades it declined somewhat. The reduction in the percentage of the foreign-born and increase of native-born workers derived largely from the growth in the numbers of children of immigrants born in America. In 1880, almost 60 percent of native-born skilled workers had foreign-born fathers; among the unskilled, the figure was 65 percent. Chicago's working class was therefore overwhelmingly of foreign stock, and the proportion of foreign-born would rise again when the next wave of European immigration peaked in the 1880s. Immigrants from Germany, Ireland, and Great Britain met most of Chicago's demand for labor between 1850 and 1880, although Scandinavians made up a substantial share beginning in the mid-1860s.

Manufacturing in Chicago can be divided into a declining artisan or producer sector and an emerging capitalist one, which was characterized most prominently by sustained capital investment in the production process and in hiring new wageworkers. Though it is difficult to draw precise boundaries between the two sectors, we focus on five major indices: the degree of concentration of capital, the transformation of production illustrated by the use of steam power, the increasing scale and sophistication of firms, the growth and transformation of the wage-earning workforce, and the emergence of a more unified and sophisticated market for labor. The development of wage earners and the bourgeoisie as social classes underlay the phenomena measured by these indices, and the emergence of all of them together, which can be summarized as class formation and capital accumulation, constituted capitalism as a mode of production.

The growing proportion of capital invested by the largest firms was a precondition for the transformation of production and the growth of the workforce. The increasing use of steam power was a marker for a much larger transformation of production. A firm might use a stationary steam engine but not organize all or most of its production around it. The systematic use of inanimate power throughout a plant was a sophisticated managerial project that involved reorganizing and sometimes eliminating craft labor. The capital needed to obtain steam engines and the managerial ability to systemically use them increased with the size of the firm. The larger firms, of course, needed more workers, who performed different kinds of semi- and unskilled labor than had been done by the dockhands and day laborers familiar in antebellum American cities. The larger firms obtained these workers in a labor market that integrated boardinghouses, saloons, and immigrant aid societies into a communications system linking the city to the East Coast and even abroad.

(Continues...)

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Excerpted from CHICAGO IN THE AGE OF CAPITAL by John B. Jentz Richard Schneirov Copyright © 2012 by Board of Trustees of the University of Illinois. Excerpted by permission of UNIVERSITY OF ILLINOIS PRESS. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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