II.%20The%20Growth%20of%20Industry%20in%20the%20US%20

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II. The Growth of Industry in the USRise of
Big Business
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The Industrial Revolution1871-1912

• The Rise of Industry
• The Captains of Industry
• The Labor Force/ Working Conditions
• Inventions

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1. The Rise of Industry

• a. Five features led the rise of industry in the
  late 19th century
• i. Abundant coal deposits (cheap energy)
• ii. Rapid spread of technological innovations

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• iii. Pressure to cut costs prices (eliminating
  competition building monopolies)
• iv. Expanded labor force (Immigrants who were
  willing to work for CHEAP!)
• v. Continued governmental attitude of Laissez
  Faire toward businesses.

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2. U.S. Economic System

• a. Capitalism private businesses run most
  industries competition drives the cost of goods/
  wages of workers.
• b. Laissez Faire Let alone/ Hands off - No
  government intervention in the economy.

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3. Economic Philosophies

• Karl Marx Opposed capitalism (he said the
  business owners took advantage of the workers).
• COMMUNISM Individual ownership of property
  should not be allowed. Property and means of
  production are owned by everyone.

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• b. Herbert Spencer proposed Social Darwinism
• 1. Society progresses through natural
  competition. The fittest people, businesses, or
  nations will rise to positions of wealth and
  power the unfit will fail.

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4. The Corporation

1. CORPORATION organizers raise money by selling
   shares of stock, or certificates of ownership, in
   the company. Stockholders are those who buy
   shares and receive dividends (a of
   corporations profits). They have little say (if
   any) in the affairs of the company

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• b. Trusts a group of companies turn control of
  their stock over to a common board of trustees.
• c. Monopoly when a trust gains exclusive control
  of an industry marked by little to no
  competition - the company has almost complete
  control over the price and quality of a product.

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5. Legislation- Government
Business

• US policies most often
• favored industrialists, not
• workers (because of laissez-faire).
• As big business owners formed
• monopolies, Americans demanded that
• trusts and monopolies be outlawed

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• b. Sherman Anti-Trust Act Congress response to
  Americans demands- passed in 1890. This law
  outlawed all monopolies and trusts that
  restrained trade.
• 1. However, law failed to define what was
  considered a monopoly or trust.
• 2. Law was difficult to enforce.

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6. Railroads

• a. Railroads were the first monopoly in America.
• b. States developed railroad commissions to look
  into complaints.
• 1. Charging more for short hauls and less for
  long hauls
• 2. Offering rebates to favored customers

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7. Mass Marketing

• Brand names and packaging played important roles
  in promoting goods.
• Advertising promoted products
• DEPARTMENT STORES sold a variety of goods.
  Marshall Fields and RH Macy were
• among the first
• department store
• owners.

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Captain of Industry
Robber Baron?
OR

• Business leader who dominated his industry,
  amassing great wealth, usually by unfair business
  practices that hurt the majority of Americans.

• Business leader who used his wealth and power to
  positively impact the country in some way, often
  through providing more jobs or through
  philanthropy.

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• Horizontal integration- strategy used by a
  business or corporation that seeks to sell one
  type of product in numerous markets. Horizontal
  integration occurs when one company gains control
  over other companies producing the same product.
• Rockefellers Standard Oil Company was one of the
  most well-known companies to use horizontal
  integration to control its industry!

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• Vertical integration - The process in which
  several steps in the production and/or
  distribution of a product or service are
  controlled by a single company or entity

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Carnegie Steel Works

• One of the earliest, largest and most famous
  examples of vertical integration was the Carnegie
  Steel company.

Iron Mine
Coal Mine
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The American Dream

• Many people, including monopolists of the time,
  began pursing the idea of the American Dream.
• The term was first used by James Truslow Adams in
  his book The Epic of America.

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• He states The American Dream is "that dream of a
  land in which life should be better and richer
  and fuller for everyone, with opportunity for
  each according to ability or achievementIt is
  not a dream of motor cars and high wages merely,
  but a dream of social order in which each man and
  each woman shall be able to attain to the fullest
  stature of which they are innately capable, and
  be recognized by others for what they are,
  regardless of the fortuitous circumstances of
  birth or position."
• How would you describe the American Dream today?