The Rise of Big Business Rober Barons and Capitans of Industry

Entrepreneurs Someone who sets up a new business to make a profit.

Corporations Organization owned by many people but treated by law as though it were a single person People who own the corporation are called stockholders A corporation can raise large amounts of money for big projects while spreading out the risk.

Vertical Integration (p.449) A company owns all of the different businesses on which it depends for its operation. Carnegie and Steel: Instead of buying coal, lime, and iron from other companies, he bout coal mines, limestone quarries and iron ore fields so that he controled the entire process.

Horizontal Integration Combining many firms engaged in the same type of business into one large corporation. When a company began to lose too much business, it would often sell out to competitors to create a larger organization. Often creates monopolies.

Monopoly When a single company achieves control over an entire market. Rockefeller’s horizontal integration gave him control of about 90% of the oil refining industry.

Trusts A legal concept that allows one person, a trustee, to manage another person’s property. This was a way for trustees to control a group of companies as if they were one large merged company…but they weren’t.

Robber Barons vs. Captians of Industry acteristics of a Captains of IndustryRobber Barons Increases availability of goods by building factories. Drains the country of its natural resources Raises productivityCorrupts pubic officials to interpret laws in their favor Expands marketsDrives competitors to ruin Creates more jobsPays poor wages Funds many of the nation’s public institutions: practices philanthropy Forces workers to toil under dangerous and unhealthy conditions Organizes the factors of productions efficiently Exploits the factors of production