Gilded Age Philosophies Laissez-faire economics- Laissez-faire economics- “HANDS OFF”- government does not get involved in business. Interference by government would decrease productivity and weaken economic foundations “HANDS OFF”- government does not get involved in business. Interference by government would decrease productivity and weaken economic foundations Social Darwinism- Social Darwinism- the strongest business will survive, the weak be damned, its natural. The weak go bankrupt and the strong thrive and get bigger the strongest business will survive, the weak be damned, its natural. The weak go bankrupt and the strong thrive and get bigger Algerism- based on Horatio Alger. Algerism- based on Horatio Alger. An ambitious person will succeed if he works hard, is thrifty, has integrity, follows the rules and has a little bit of luck An ambitious person will succeed if he works hard, is thrifty, has integrity, follows the rules and has a little bit of luck Materialism- Materialism- the idea that acquiring goods or wealth is one of the most positive pursuits in life. The desire to acquire wealth is a true “American” value the idea that acquiring goods or wealth is one of the most positive pursuits in life. The desire to acquire wealth is a true “American” value Gospel of Wealth Gospel of Wealth The belief that the wealthy have a responsibility to combine their economic power with Christian charity. Acquire wealth during your business life, then do philanthropy during retirement. The belief that the wealthy have a responsibility to combine their economic power with Christian charity. Acquire wealth during your business life, then do philanthropy during retirement. According to this theory,, who is not responsible for caring for the poor??? According to this theory,, who is not responsible for caring for the poor??? The rich do the charity, NOT THE GOVERNMENT!! The rich do the charity, NOT THE GOVERNMENT!! Aim: How did the captains of industry develop monopolies?

Types of Monopolies Monopoly -A situation in which a single company owns all or nearly all of the market for a given type of product or service. This would happen in the case that there is a barrier to entry into the industry that allows the single company to operate without competition Monopoly -A situation in which a single company owns all or nearly all of the market for a given type of product or service. This would happen in the case that there is a barrier to entry into the industry that allows the single company to operate without competitionsinglecompany ownsmarket productserviceindustrycompetitionsinglecompany ownsmarket productserviceindustrycompetition Cartel - loose association of businesses making the same product, that agree to share certain business practices, such as same pricing. Cartel - loose association of businesses making the same product, that agree to share certain business practices, such as same pricing. Trust - (invented by Rockefeller) different businesses that agree to be run by a common Board of Trustees, who got a profit from each of the businesses they oversaw Trust - (invented by Rockefeller) different businesses that agree to be run by a common Board of Trustees, who got a profit from each of the businesses they oversaw Rockefeller set up his businesses this way because the government did not allow for one company owning stock in another. Rockefeller set up his businesses this way because the government did not allow for one company owning stock in another. Aim: How did the captains of industry develop monopolies?

Why monopolies developed Various factors allowed for monopolies to develop and exist during the Gilded Age Various factors allowed for monopolies to develop and exist during the Gilded Age Government of policy of laissez-faire allowed for monopolies to develop in late 1800’s Government of policy of laissez-faire allowed for monopolies to develop in late 1800’s Both parties were usually kind to business Both parties were usually kind to business Unlimited resources Unlimited resources Basically no early competition for the original big businessmen Basically no early competition for the original big businessmen Technological advances in that field gave them superior advantage over any possible competition Technological advances in that field gave them superior advantage over any possible competition Aim: How did the captains of industry develop monopolies?

Andrew Carnegie “American Dream” rags to riches story “American Dream” rags to riches story Scottish immigrant, worked as telegraph messenger boy, eventually bought the company, then went into steel industry Scottish immigrant, worked as telegraph messenger boy, eventually bought the company, then went into steel industry Pittsburg Steel Co. Pittsburg Steel Co. Combination of Bessemer process, desperate need for steel (RR, cities), and Carnegie’s business acumen made him one of the richest men in the world Combination of Bessemer process, desperate need for steel (RR, cities), and Carnegie’s business acumen made him one of the richest men in the world In 1900, Carnegie was 66 years old, wanted to retire, told J.P. Morgan to buy his company or else In 1900, Carnegie was 66 years old, wanted to retire, told J.P. Morgan to buy his company or else Sold company, which Morgan renamed US Steel, for $400 million Sold company, which Morgan renamed US Steel, for $400 million Carnegie’s share was $226 million, which translates to $120 billion in today’s dollars Carnegie’s share was $226 million, which translates to $120 billion in today’s dollars To put in proper perspective,,,,, Bill Gates, the richest man in the world, has a net worth of $81 billion To put in proper perspective,,,,, Bill Gates, the richest man in the world, has a net worth of $81 billion Recent study put Carnegies wealth at $310 billion, Rockefeller $318 billion Recent study put Carnegies wealth at $310 billion, Rockefeller $318 billion Carnegie spends retirement as philanthropist, giving away 90% of all his wealth to charity (gospel of wealth) Carnegie spends retirement as philanthropist, giving away 90% of all his wealth to charity (gospel of wealth) Schools, libraries, hospitals/ the arts etc. Schools, libraries, hospitals/ the arts etc. Aim: How did the captains of industry develop monopolies?

10 Richest Individuals All time 10. Cornelius Vanderbilt $185 billion 10. Cornelius Vanderbilt $185 billion 9. Henry Ford $199 billion 9. Henry Ford $199 billion 8. Muammar Gadafi $200 billion 8. Muammar Gadafi $200 billion 7. William the Conqueror $209 billion 7. William the Conqueror $209 billion 6. Jakob Fugger $221 billion 6. Jakob Fugger $221 billion 5. Mir Osman Ali Khan $230 billion 5. Mir Osman Ali Khan $230 billion And 147 kids!!! And 147 kids!!! 4. Czar Nicholas II $300 billion 4. Czar Nicholas II $300 billion 3. Andrew Carnegie $310 billion 3. Andrew Carnegie $310 billion 2. John D. Rockefeller $318 billion 2. John D. Rockefeller $318 billion 1. Mansa Musa $400 billion 1. Mansa Musa $400 billion Aim: How did the captains of industry develop monopolies?

John D. Rockefeller Started his 1 st company at 19 years old. Started his 1 st company at 19 years old. Eventually buys out almost all of the competition Eventually buys out almost all of the competition Standard Oil Company Standard Oil Company By 1870’s, Standard was refining 90% of US petroleum By 1870’s, Standard was refining 90% of US petroleum 2/3rds of world oil shipping!!! 2/3rds of world oil shipping!!! Creates the trust form of business Creates the trust form of business Gives away ½ of his wealth throughout his life Gives away ½ of his wealth throughout his life Aim: How did the captains of industry develop monopolies?

Biographer Allan Nevins, answering Rockefeller's enemies, concluded: Biographer Allan Nevins, answering Rockefeller's enemies, concluded:Allan NevinsAllan Nevins “The rise of the Standard Oil men to great wealth was not from poverty. It was not meteor-like, but accomplished over a quarter of a century by courageous venturing in a field so risky that most large capitalists avoided it, by arduous labors, and by more sagacious and farsighted planning than had been applied to any other American industry. The oil fortunes of 1894 were not larger than steel fortunes, banking fortunes, and railroad fortunes made in similar periods. But it is the assertion that the Standard magnates gained their wealth by appropriating "the property of others" that most challenges our attention. We have abundant evidence that Rockefeller's consistent policy was to offer fair terms to competitors and to buy them out, for cash, stock, or both, at fair appraisals; we have the statement of one impartial historian that Rockefeller was decidedly "more humane toward competitors" than Carnegie; we have the conclusion of another that his wealth was "the least tainted of all the great fortunes of his day."[73] “The rise of the Standard Oil men to great wealth was not from poverty. It was not meteor-like, but accomplished over a quarter of a century by courageous venturing in a field so risky that most large capitalists avoided it, by arduous labors, and by more sagacious and farsighted planning than had been applied to any other American industry. The oil fortunes of 1894 were not larger than steel fortunes, banking fortunes, and railroad fortunes made in similar periods. But it is the assertion that the Standard magnates gained their wealth by appropriating "the property of others" that most challenges our attention. We have abundant evidence that Rockefeller's consistent policy was to offer fair terms to competitors and to buy them out, for cash, stock, or both, at fair appraisals; we have the statement of one impartial historian that Rockefeller was decidedly "more humane toward competitors" than Carnegie; we have the conclusion of another that his wealth was "the least tainted of all the great fortunes of his day."[73] Carnegie Aim: How did the captains of industry develop monopolies?

Biographer Ron Chernow wrote of Rockefeller: Biographer Ron Chernow wrote of Rockefeller:Ron ChernowRon Chernow “What makes him problematic—and why he continues to inspire ambivalent reactions—is that his good side was every bit as good as his bad side was bad. Seldom has history produced such a contradictory figure “What makes him problematic—and why he continues to inspire ambivalent reactions—is that his good side was every bit as good as his bad side was bad. Seldom has history produced such a contradictory figure Aim: How did the captains of industry develop monopolies?

Vanderbilt NY Central RR NY Central RR We already did his story We already did his story Aim: How did the captains of industry develop monopolies?

J.P Morgan Banker and consolidator Banker and consolidator JP Morgan (Chase) JP Morgan (Chase) Bought out Edison Bought out Edison Bought out Carnegie to form US Steel Bought out Carnegie to form US Steel Loaned the US government $52 million of his own gold to bail out government after Panic of 1893 Loaned the US government $52 million of his own gold to bail out government after Panic of 1893 Aim: How did the captains of industry develop monopolies?

Captains of Industry or Robber Barons? “Robber Barons” “Robber Barons” Stealing from public wealth Stealing from public wealth Exploited workers- low wages Exploited workers- low wages “international scouts”- recruited immigrants- why? “international scouts”- recruited immigrants- why? Corruption in business and of political leaders Corruption in business and of political leaders Drained US of its natural resources Drained US of its natural resources Damaged environment Damaged environment River pollution, air, garbage etc. River pollution, air, garbage etc. Drove competitors out of business Drove competitors out of business “Captains of Industry” “Captains of Industry” Increased national output-GNP Increased national output-GNP Gave jobs Gave jobs Created new products/technology Created new products/technology Gave back with charity- museums, libraries, etc. Gave back with charity- museums, libraries, etc. Aim: How did the captains of industry develop monopolies?

Big Businessmen Quotes The growth of large business is merely survival of the fittest- Rockefeller The growth of large business is merely survival of the fittest- Rockefeller What do I care about the law, havent I got the power?-Vanderbilt What do I care about the law, havent I got the power?-Vanderbilt I believe with $200,000 we can get the bill we want passed- Collis Huntington RR owner I believe with $200,000 we can get the bill we want passed- Collis Huntington RR owner The public be damned. I am working for my stockholders- William Vanderbilt The public be damned. I am working for my stockholders- William Vanderbilt Well, I don’t know if I want a lawyer to tell me what I cannot do. I hire him to tell me how to do what I want to do- JP Morgan Well, I don’t know if I want a lawyer to tell me what I cannot do. I hire him to tell me how to do what I want to do- JP Morgan You have undertaken to cheat me. I won't sue you, for the law is too slow. I'll ruin you. Cornelius Vanderbilt Aim: How did the captains of industry develop monopolies?

The way to make money is to buy when blood is running in the streets. John D. Rockefeller John D. Rockefeller John D. Rockefeller I always tried to turn every disaster into an opportunity. John D. Rockefeller I always tried to turn every disaster into an opportunity. John D. Rockefeller John D. Rockefeller John D. Rockefeller Aim: How did the captains of industry develop monopolies?

Michael Moore-2003 "So, here's my question: after fleecing the American public and destroying the American dream for most working people, how is it that, instead of being drawn and quartered and hung at dawn at the city gates, the rich got a big wet kiss from Congress in the form of a record tax break, and no one says a word? How can that be? I think it's because we're still addicted to the Horatio Alger fantasy drug. Despite all the damage and all the evidence to the contrary, the average American still wants to hang on to this belief that maybe, just maybe, he or she (mostly he) just might make it big after all.“ "So, here's my question: after fleecing the American public and destroying the American dream for most working people, how is it that, instead of being drawn and quartered and hung at dawn at the city gates, the rich got a big wet kiss from Congress in the form of a record tax break, and no one says a word? How can that be? I think it's because we're still addicted to the Horatio Alger fantasy drug. Despite all the damage and all the evidence to the contrary, the average American still wants to hang on to this belief that maybe, just maybe, he or she (mostly he) just might make it big after all.“ Agree/Disagree with the quote? Why/why not? Agree/Disagree with the quote? Why/why not? Aim: How did the captains of industry develop monopolies?