Industrialism The “Cost” of Big Business

Would you rather: Live in a town built and run by your employer… or work hour days Buy all of your goods at an artificially high interest rate… or take out loans from your employer to pay for those goods Start work at the age of 10… or go to school Suffer severe stunted growth due to working in small factories… or suffer stunted mental capability Work 6 days/week… or in a sweatshop Move to a new country to find a job with no guarantee… or work for low wages Be forced into wage slavery to repay loans… or face the potential of losing a finger every day at work

Essential Question Industrialization increased the standard of living and the opportunities of most Americans, but at what cost?

Back to the Basics What is at play here? Capitalism Private ownership of business Individual economic freedom Free market Supply and Demand Motivator = Profit Monopoly: Industry owned by a single corporation Cartel: When companies band together to engage in price fixing

Causes of Rapid Industrialization 1.Oil boom 2.Technological Innovations (Bessemer process, light bulb, motion picture camera, telephone, etc…) 3.The Railroad: First big business in the US. A magnet for financial investment. The key to opening the West. How? Aided the development of other industries.

Causes of Rapid Industrialization con’t 4. Unskilled & semi-skilled labor in abundance. 5. Abundant capital 6. New, talented group of businessmen [entrepreneurs] and advisors (risk takers). 7. Market growing as U.S. population increased. 8. Government willing to help at all levels to stimulate economic growth. 9. Abundant natural resources.

Mass Production Ford Model T Automobile Henry Ford -mass production of the automobile “I want to pay my workers so that they can afford my product!”

Other Ruthless Entrepreneurs Cornelius Vanderbilt:

Other Ruthless Entrepreneurs George Pullman Sleeper Car – importance? J. Pierpont Morgan Banker who bailed out the U.S. gov’t in 1895 Bought Carnegie steel for ($480 million) in 1901 making him the richest man in the world at that time

Now, what do we do with all of this $$$? Andrew Carnegie’s Gospel of Wealth (1901). p.113 Anglo-Saxon race is > Inequality is inevitable and good Wealthy should act as trustees for the poor

Legacy: Cornelius Vanderbilt (Railroads, Steamships) John D. Rockefeller (Oil) J.P. Morgan (Finance) Andrew Carnegie (Steel)

Social Darwinism Individuals must have absolute freedom to struggle, succeed or fail. It is truly, survival of the fittest in the corporate world

The Government Intervenes Interstate Commerce Commission(1887) Oversee railroad operations Records sent to Congress, time consuming and difficult to enforce Sherman Anti-Trust Act: Outlawed any trust that operated in “restraint of trade or commerce among the several states.” created to lessen the power of big corporations

Poor Working Conditions Employers paid low wages and offered poor working conditions Immigrant population just needed to work Poor ventilation + Low light = sickness and injury Long hours, 6 days/week Dangerous – fast moving parts, hurt = out of work Company towns (Pullman) Why did they stay?! They believed they could be easily replaced!

Child Labor

A “Company Town” Pullman, IL

The Workers React Labor Unions Form: Collective bargaining  workers joining together for common cause of better working conditions Approach employer with a platform Knights of Labor – first labor union, importantly accepts African Americans AF of L (American Federation of Labor) – skilled labor union Samuel Gompers