The original Gilded Age extended from the end of the US Civil War to the early years of the twentieth century, an era when industrialization took root and a small cabal took control of critical sectors of the economy. Given the failure of the political classes to prevent the war between the states and the bankrupt economy that followed, in some respects the emerging dominance of private capital was a necessary evil. While committed first and foremost to empire building, robber barons such as John D. Rockefeller, Andrew Carnegie, and J. P. Morgan also invested massively in infrastructure, helping to build the nation through roads and railroads, universities, libraries, hospitals, etc. Such men amassed vast fortunes, some of which they spent on elegant manors and castles staffed with armies of servants in New York City and Newport, Rhode Island. Canada’s own Gilded Age arrived later on, but its legacy can still be seen in Mont­real’s Golden Square Mile, a neighbourhood of giant and regal homes that hug Mount Royal.

Extraordinary wealth in the US led to political power and highly useful state benefits for the rich like protect­ive tariffs, free land for railways, and anti-strike measures. The codependent relationship that developed between the state and the super-wealthy is perhaps best exemplified by the Panic of 1893, when a deep depression led to a run on the gold supply. President Grover Cleveland asked financier J. P. Morgan to create a syndicate to supply the US Treasury with gold. Morgan did, and the national bank was rescued from insolvency. “That episode illustrated the bankers were more powerful than the government,” says Alan Lessoff, a professor of history at Illinois State University and an expert on the Gilded Age.

Special interests have always exercised undue influence on society, but after the shocks of two world wars and the Depression, most North Americans experienced an unparalleled rise in wages and living standards between the late 1940s and roughly 1980. By the mid-1970s, one-quarter of the US workforce and over one-third of Canadian workers were unionized, and working people were consistently winning significant wage concessions. Fordism – the notion that increasing wage rates for workers meant more consumers with more money to spend – prevailed in heavy industry. “It was an unpreced­ented period in the history of capitalism, where for a variety of reasons working people were able to advance their demands,” recalls Jim Stanford, an economist with the Can­adian Auto Workers union.

But not all was quiet in corporate America. In 1971, just prior to being appointed by Richard Nixon to the US Supreme Court, Lewis F. Powell Jr. – a prominent corporate lawyer who sat on the boards of more than fifteen cor­porations – wrote a memorandum claim­ing that “the American economic system is under broad attack” and that businesspeople must “confront this problem as a primary responsibility of corporate management.” Circulated to members of the US Chamber of Commerce, the memo claimed that big business had “shown little stomach for a hard-nosed contest with their critics” and that in terms of framing government policy, “the American business executive is truly the ‘forgotten man.’”

With the US mired in Vietnam and anti-war demonstrations becoming more vociferous, Powell Jr. attacked campus liberals, Ralph Na­der and his acolytes, and the press. While the stage was set for a firm business rebuttal, econom­ic preoccupations took a back seat to Watergate and the US’s failure in Vietnam. Dispiriting years followed but, by the late 1970s, with Jimmy Carter in the White House and corporate profits declining, some precipitously, the counter-revolution that Powell Jr. had attempted to spark gained renewed vigour.

Powell Jr.’s manifesto spelled out an array of tactics that big business could employ to challenge critics on campus, in the media and courts, and in the political arena. Most notable in this percolating ideological war was the formative role of conservative think tanks. The Heritage Foundation, funded initially by Joseph Coors, beat the drum for economic deregulation, a theme also central to the American Enterprise Institute, the Cato Institute, and the Hudson Institute, among others. Such groups began producing reports – customarily distilled into press releases and disseminated to major media outlets – as well as training young ideologues to staff key government and congressional posts. If the initial impetus was to promote Ronald Reagan’s “trickle down” economic theories, “expert analysts” from conservative think tanks were soon dominating the television talk show circuit, radio programs, and print journalism, and they were weighing in on practically every conceivable subject.

This business counterattack was highly organized, says Doug Henwood, publisher of the New York-based Left Business Observer, which covers Wall Street. “By the time Ronald Reagan and [Federal Reserve chairman] Paul Volcker were in power, they had an agenda. It was class warfare from above, and people at the bottom didn’t know what hit them.”

Canada came a little later to this game, but ultimately the Fraser and C. D. Howe institutes and the Canad­ian Council of Chief Executives came to play a similar role: all call for capital to be freed from constraints imposed by governments, all promote free trade, are generally critical of consumer protection laws and the welfare state, and make regular appearances in the media.

In the early 1980s, Volcker drove up interest rates in order to offset inflation, plunging the North American economy into its deepest recession since the Great Depression. By the time the Reagan administration broke the 1981 air traffic controllers’ strike by replacing unionized workers with scab labour, Fordism had effectively been defeated. Unions were on the defensive and corporations were extracting wage concessions.

With increased globalization and freer trade, North American workers were soon forced to compete for jobs with low-wage workers in the developing world. The era of the closed union shop was over, and organized labour wilted as a force for equalization in North American society. Today, the portion of the private sector workforce that is unionized is 7.4 percent in the US and 17 percent in Canada. Explains the caw’s Stanford, “Working people have lost power, not maintained their share of the pie, and seen a decline in their living standards.”