Opener: Let’s do some economics

Why is coal cheap? Why are diamonds expensive?

Why have gas prices risen over the past few years?

How much would you pay for a glass of lemonade? Explain : $???

Story time about Mr. Fries’ lemonade stand

In the 1900’s the U.S. government had a “hands off” approach to the economy. They believed in a system of pure capitalism.

Capitalism - Economic system in which supply and demand determine prices. - Goal of Capitalism?

Laissez-Faire Government should keep its hands off of businesses

During the early 1900s, some Americans made their fortunes through industry

Entrepreneur A person who takes a risk and starts a company.

Andrew Carnegie John D. Rockefeller

Monopoly One business has complete control of a product or service

Can someone explain the board game Monopoly to me?

Produced 1/4 of American steel “Steel King” Poor Scottish immigrant $25 million per year

Used Bessemer Process – allowed for large skyscrapers to be built

Guess where Carnegie ran his business…..

One business controls all aspects of production

Philanthropist Someone who makes charitable donations to benefit human welfare

Carnegie Mellon University

Carnegie Hall

Carnegie Library

Merger: combining many competing firms into one John D. Rockefeller pioneer of the merger mov’t (Standard Oil Company)

Trusts A group of separate companies that are placed under the control of a single board

Horizontal Consolidation All competing companies are merged into 1 area of business

Rockefeller Institute for Medical Research

University of Chicago

Carnegie and Rockefeller were Captains of Industry because they: -Increased the supply of goods -Created hundreds of jobs -Built museums and donated $

Or were they??????? ???

Robber Barons -Stole from the public -Drained natural resources -Controlled government -Drove small business out of business -Paid workers very little -Horrible working conditions

Late 1800s Gilded: Anything that glitters on the surface but is rotten underneath Coined by Mark Twain

Why would this period of time be known as the Gilded Age?

Much wealth was being created by a few but there was a lot of poverty & bad working conditions

Is this OK? English philosopher Herbert Spencer, said yes!

Application of Darwin’s theory of evolution to human society

Progress occurs through competition in which the weak fall & the strong thrive