What was the Industrial Revolution? The era between 1700 and 1900 when changes in technology transformed the world Shifted the way people worked From human and animal power to water and steam powered machines (allows for mass production) Fueled by innovation and inventions Starts in Great Britain and comes to America by the early 1800s

Today’s LEQ What motivates people to invent and be innovative?

Why Invent? Population boom increases demand for goods and services Immigration Healthier people Inventions were made to solve problems Problem: How do we speed up production to meet the huge increase in demand? Solution: Invent new machines for mass production

Why Invent? There is profit to be made!!! Capitalism – an economic system where factories, equipment, and other means of production are privately owned rather than being controlled by the government There is profit to be made!!! Capitalists funded new technology, scientific research, and the building of railroads and factories Hoped to make a profit in return. Generally speaking, the bigger the risk, the bigger the reward

Capitalism Cont’d… Let’s Discuss… Financial backers protected their investments through patents License to use, make, and sell an invention Let’s Discuss… Why would patents protect the investments of capitalists?

Key Improvements of the Industrial Revolution There were many inventions and innovations after the Civil War that completely transformed the nation Improvements in Communication Improvements in Transportation Improvements in Oil Drilling Agricultural Improvements Bessemer Process Electricity *** In pairs, you will learn more about specific inventions and innovations in each category. Stand by for further instructions  ***

Why is the Bessemer Process so Important? Allowed for the growth of cities! Turned iron into steel (harder, stronger, and lighter) Railroads switched to steel rails Used for heavy construction Now we have longer bridges and taller buildings!

Early Skyscrapers Strong steel plus elevators mean that America’s teeming cities can now grow upwards!

The Brooklyn Bridge, designed with steel cables suspended from high towers, was made possible by mass production.

Automobile Automobile – Henry Ford made the car more affordable by using the assembly line Assembly line – process where each worker does one task in the making of a final product 11

Division of Labor When someone completes one task as part of the job Positive: Allows for mass production (productivity greatly increases) Allows for specialization (concentrate labor on one specific task) Negative: workers no longer take pride in work and removes creativity

Compare The Idea of Making Shoes He may never work on shoes!

Frederick Winslow Taylor “Father of Scientific Management” Organized and systemized factories How fast should the line move? Goal: to get workers to produce more in less time

Industrial Revolution Business Leaders Business Practices Business Regulations Today’s LEQ: Why might the rise of industry be good or bad for the U.S.?

The Rise of Corporations Small business owners didn’t have all the capital they needed to expand and formed corporations Recognized as legal entity separate from its owners (can own property, borrow money, sue, or be sued) People invest in a corporation by buying stock (shares of a company); the more shares a person buys the more of the company they own

Corporations Cont’d Corporations competed for business – this benefited the consumer! Lower prices, more variety, better quality Cut throat competition! Business owners devise plans to get rid of their competitors

Getting Rid of the Competition Monopoly – when one company buys out each of its competitors and dominates a particular industry What if there were only 1 cell phone company?! Trusts – multiple companies selling the same product agree to set their prices and split the profits evenly instead of competing with each other What if all the cell phone companies agreed to charge you $1,000 a month for your cell phone?! Cartels - a loose association of businesses in a similar agree to limit supply to drive up prices What if Chevrolet controlled the steel industry, railroads, and oil companies?!

Big Business and Government Trusts and monopolies put money and power in the hands of a few people Industrial giants = “big business” Corporations expanded in two ways: Horizontal Integration – joining together as many firms from the same industry as possible Vertical Integration – taking control of each step in the production and distribution of a product

Controlling the Market Bob’s Pizza Using Vertical Consolidation, Bob could control the Pizza market in town by controlling many of the costs associated with making his pizza! Bob’s Trucking Company Bob’s Cheese Factory Factory Bob’s Farm

Controlling the Market Bob’s Pizza Delaware Pizza Happy Time Pizza Pizza Pizza Using Horizontal Consolidation, Bob could control the Pizza market in town by buying the other Pizza shops! Bob’s Pizza Bob’s Pizza Bob’s Pizza Bob’s Pizza

Governments Leave Businesses Alone By the 1800s, many Americans realized that big business was limiting competition Caused prices to rise (helped producers; hurt consumers) Politicians favored a policy of laissez-faire (French for “allow to do” or leave it alone)– the market, through supply and demand, would regulate itself if government didn’t interfere

WAKE UP!!!!! YOU! Put your head up!

Social Darwinism Another influential idea at the time was Social Darwinism – “survival of the fittest” The best-run businesses led by the most capable people would survive and prosper Held the idea that government should leave businesses alone to succeed or fail on their own Monopolies, cartels, and trusts all exemplified the practice of Social Darwinism

Government Takes Some Action to Limit Business Public concern provokes response from the federal government Congress passed the Sherman Antitrust Act in 1890 – outlawed trusts, monopolies, and other forms of business that restricted trade

Two Types of Business Owners Captains of Industry Or Robber Baron

Stop whining… We’re almost done!

Captains of Industry Practiced Social Darwinism to an extent but: They increased the supply of goods by building factories. They raised productivity and expanded markets, further lowering prices They created jobs at decent wages and in safe factories that enabled many Americans to buy new goods and raise their standard of living. They also funded museums, libraries, and universities, many of which still serve the public today.

Robber Barons Business leaders who made their fortunes by taking advantage of the public They drained natural resources and charged high prices They persuaded public officials to interpret laws in their favor. They ruthlessly drove their competitors to ruin. They paid their workers meager wages and forced them to toil under dangerous and unhealthful conditions.