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c haPter 2

Liberalism: Power, Economic

Crisis, Reform, War

A

s Americans welcomed the 20th Century, they were looking at a world
that was considerably different than any previous generation in the
United States. The pain of the Civil War was still fresh, and much of the
destruction had not yet been repaired. The massive and rapid economic
change brought on by Capitalism had led to at-times violent class struggle,
and a society based on traditional labor like small farming and crafts work was
now industrializing and workers were being paid a wage to do unskilled labor
inside a factory. Already, the impact of these changes had been seen in labor
uprisings, riots, and farm rebellions, all of which had been eventually crushed
by the capitalist class. But those events did not end the conflict between the
new elite of powerful industrial and financial men and working people. If
anything, even as Capitalism was clearly established as the American eco-
nomic model, social protests and struggles grew and even moved beyond U.S.
borders. And all of this was due to the establishment of the ideology that
would be the basis of American political-economic life from that point
onward, liberalism.
Today, liberals are usually identified with social causes like poverty, abor-
tion, birth control, gay marriage, or affirmative action. But liberalism, in its
origins, was an economic philosophy. While it may seem complicated, it was
built on a basic idea—that private individuals and interests should own banks,