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Difficulty: HardRise of Industrial Capitalism and Business Consolidation

Source: William Graham Sumner, *What Social Classes Owe to Each Other*, 1883

"The concentration of great wealth in the hands of a few is a necessary condition of the development of civil society... The millionaires are a product of natural selection, acting on the whole body of men to pick out those who can meet the requirement of certain work to be done... They may be fairly regarded as the naturally selected agents of society for certain work. They get high wages and live in luxury, but the bargain is a good one for society."

Which of the following late nineteenth-century developments most directly challenges the assumptions about economic relationships presented in the excerpt?

  1. The federal government’s active promotion of industrial growth through protective tariffs and land grants to railroad companiesAnswer
  2. B
    The federal government’s strict adherence to laissez-faire principles, which prevented any involvement in economic affairs
  3. C
    The transition of the United States economy to a mercantilist system designed to extract raw materials from overseas colonies
  4. D
    The creation of regulatory agencies during the Progressive Era that completely dismantled the capitalist system

Answer

The federal government’s active promotion of industrial growth through protective tariffs and land grants to railroad companies
The correct answer is correct because William Graham Sumner’s argument relies on the social Darwinist premise that the concentration of wealth is a natural, self-regulating outcome of market competition. However, this is directly challenged by the fact that the federal government actively intervened to shape the economy and promote industrial growth through protective tariffs, massive land grants, and direct subsidies to railroad companies, demonstrating that Gilded Age capitalism was not a purely natural or laissez-faire system.

Step-by-Step Solution

1
Analyze the source text to identify the author's primary argument and underlying assumptions.
The author argues that the concentration of wealth in the hands of millionaires is a natural result of 'natural selection' in the marketplace, which ultimately benefits society.
Understanding the core argument is necessary to evaluate which historical developments would challenge it.
2
Recall and evaluate the role of the federal government in the Gilded Age economy.
Although the era is often described as 'laissez-faire,' the federal government actively supported business consolidation and industrial growth using policies like protective tariffs, land grants to railroads, and military intervention in strikes.
This step identifies the historical realities that contradict the idea of a purely natural, non-intervened market selecting the winners of industrial capitalism.
3
Compare the historical realities to the options to find the development that most directly challenges Sumner's free-market assumptions.
The option describing active government support for corporations via tariffs and land grants directly shows that wealth concentration was heavily engineered by state policy, not just natural market forces.
This establishes the correct option by matching the historical reality of government intervention against the author's laissez-faire assumption.

Key Concept

The role of the federal government in Gilded Age industrial capitalism and the contrast between laissez-faire rhetoric and government policy reality.
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Topics

Rise of Industrial Capitalism and Business Consolidation

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