Above: The Breakers, the summer cottage of the Vanderbilt family in Newport, RI (1895)
We recently took a Northeast Road Trip where we spent a few days in Newport, Rhode Island. Newport was the summer retreat of the uber-rich during the period from about 1875 to the end of the 19th century. Mark Twain called this time the “Gilded Age” referring to the thin layer of gold that covered just about everything. It was not a compliment.
After touring the Vanderbilt mansions in Newport, I read Anderson Cooper’s book, “Vanderbilt, the Rise and Fall of an American Dynasty.” It is an amazing story of how huge amounts of money were made and spent in a relatively short period of time. Cooper is the Fourth-Great Grandson of Cornelis Vanderbilt, and he insists that it was up to him to build his own resources, even helping his mother, Gloria Vanderbilt with her expenses in her later years.
Known as “The Commodore” because of his ruthlessness, Cornelius was a shipping and railroad tycoon who made his money not only by developing a railroad monopoly but having thousands of employees working at what was barely subsistence conditions. A typical wage was about $350 per year which would be about $5,000 in 2025 dollars, less than $2.00 per hour in 2025 dollars. The result was that his heirs had the financial resources to build fabulous mansions and threw million-dollar parties while the majority of people lived in slums and tenements with no heat or running water.
The Vanderbilts, Astors, and others of the super-rich of the Gilded Age considered themselves royalty and copied the styles of European Royalty, right down to decorating their homes in the style of Versailles and other European Palaces. Most of these houses have not survived because they were seriously impractical. The ones that remain are museums to excess and perhaps a cautionary tale as well. The term “Conspicuous Consumption” was coined to apply to the Vanderbilts.
President Teddy Roosevelt broke up the trusts and monopolies, and unions and laws such as minimum wages helped end the period where a few people became super rich and most people lived in poverty.
Progressive income tax, where higher income people pay at a higher tax rate and low-income people pay a lower tax, helped build the middle class beginning in the mid-twentieth century. That along with better working conditions driven by unions and government regulations lifted the average family’s standard of living.
Flattening the tax rates under President Reagan and lessening other government regulations of labor and banking have shifted the curve again resulting in a shrinking middle class, more poverty, and most obviously, a new class of super-rich Americans.
We now have a new group of super-rich billionaire Americans who once again consider themselves kings and therefore above the law. Only time will tell how it works out this time, but we will watch to see if the idea that “the world’s systems move toward justice, but they just move slowly and not always in a straight line” can be the eventual outcome. Until then, we each have decisions to make about how we either spend or conserve our resources and how we can help others not only to survive but to thrive along the way.
Above: Tenement housing, NYC, (1890) The land on which these slums were built was owned by the Astors.
