The%20Rise%20of%20Big%20Business

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The Rise of Big Business
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Corporations Develop

• Until 1900s families owned small businesses that
  were local
• Corporations form that are owned by many people,
  had the same rights as citizens
• Corporations increase their profits by
• Paying low wagesupsets workers
• Broadened their advertising base
• Invested in inventors
• Many corporations formed monopolies in which they
  controlled the entire market (no competition)
• Using vertical and horizontal integration

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• Robber Barons

• Captains of Industry

• Entrepreneurs who built monopolies that were
  unfair to consumers
• Swindled the poor
• Bought out competitors
• Seen as bad for the economy
• Rockefeller

• Entrepreneurs that were seen as serving the
  nation in a positive way
• Creating jobs
• Stimulated innovation
• Were charitable
• Carnegie

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Social Darwinism

• Survival of the fittest promoted by Charles
  Darwin
• wealth was a measure of ones inherent value and
  those who had wealth were most fit
• Only the wealthy should rise to the top
• Dont use public funds to help the poor
• Said that the impoverished were unfit to
  reproduce
• Complete opposite of Gospel of Wealth

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Horatio Alger

• In his books, Alger told stories of young men who
  won wealth and fame by being honest and
  hardworking
• Advised Americans to seek success based on values
• Success through the strengths of their own efforts

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John D. Rockefeller

• Established the Standard Oil Company
• Bought up smaller oil companies to create his own
  company (horizontal integration)
• Bought the oil wells, pipelines, retail outlets
  and railroads
• Created a monopoly for the oil industry
• Controlled 90 of the oil in America

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Andrew Carnegie

• Steel tycoon
• Used the Bessemer process to mass produce steel
• Teamed up with J.P. Morgan to find investors in
  RR so that the demand for steel would increase
• Helped Carnegies create the industrial giant US
  Steel

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Gilded Age

• A term coined by Mark Twain that describes the
  last decade of the 19th century
• Said that America had a rotten core but was
  covered with gold paint (gilded)
• Describes how on the outside America looked
  wealthy (gold paint) and prosperous but there was
  poverty and despair (rotten core) underneath all
  the wealth
• The gap between the rich and the poor was too wide

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Other Entrepreneurs

• Cornelius Vanderbilt
• Made millions from the shipping and railroad
  business
• Became a symbol of the excesses during the Gilded
  Age

• George Westinghouse
• Developed air brakes and a device that allowed
  trains to switch from one track to another

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Government Regulation of Big Business

• Laissez-faire little government interference in
  the economy
• An American tradition
• But the stronghold that these capitalists had on
  the economy worried the government
• Interstate Commerce Commission set up to regulate
  railroads
• Sherman Antitrust Act outlawed monopolies and
  trusts (companies owned by stockholders)but not
  really enforced