What Made America Great in the Gilded Age
26th February 2026
“We were at our richest from 1870 to 1913. That’s when we were a tariff country,” said President Donald Trump recently, and he’s not wrong. But tariffs aren’t the whole story. The genius of the Gilded Age was interstate regulatory and tax competition.
That economy boomed. From 1870 to 1913, America’s gross domestic product grew at nearly 5% per year. Even though America’s population nearly tripled during that time, with 30 million immigrants, per capita GDP doubled. Steel production boomed, surpassing Britain, France, and Germany combined. Railway miles quadrupled. A period that began amid the ruins of civil war ended with America in first place among the world’s great economic powers.
Washington collected lots of tariffs then, but little else. Before the 16th Amendment paved the way for federal income taxes in 1913, Congress was spending barely 1% of GDP—compared with nearly 25% today. Meanwhile, the federal power to regulate commerce was limited to transactions that actually crossed state lines, leaving the vast majority of regulation to the states.
The year 1913 was the year America went to shit: 16th Amendment (income tax), 17th Amendment (direct popular election of Senators, turning a republic into a democracy), Woodrow Wilson (fascism comes to America), the Federal Reserve (government gets to pee in the soup by printing money whenever it wants to).
Then 1919 put the last nails in the coffin: 18th Amendment (prohibition, giving us the Mafia), 19th Amendment (votes for women, giving us emotion-driven politics), and the Treaty of Versailles (giving us Hitler and eventually World War II).