BUSINESS NOTES

Besides improvements in technology and cheap labor, what else was needed to industrialize? shrewd business leaders entrepreneurs to gamble on new products capital to build factories and market inventions

How were business leaders able to do this? They combined funds and resources into large companies.

What were some of these new business combinations? Monopolies - complete control of a product or service. Cartel-a loose association of businesses that make the same product. ( ex might decide to limit supply to keep prices high). Trust-a group of businesses controlled by the same board of trustees as a single unit.

How did industrialists create trusts? Horizontal Consolidation-bringing together all the companies that produce the same product into a single company. (ex Standard Oil). Vertical Consolidation-bringing together all the different businesses that make up all phases of a product's development. (ex Carnegie Steel).

Why create a trust? Lower production costs. Increase profits. Eliminate competition.

Who were big business leaders or industrialists during industrialization? Andrew Carnegie - Steel John D. Rockefeller - Oil Cornelius Vanderbilt - Rail Roads

How do historians view these men? Captains of Industry - increased the supply of goods by building factories, marketed goods, expanded markets, and created jobs. Robber Barons - built their fortunes by stealing from the public.

What role did industrialists think the government should take in the business world? Felt that the government should not regulate business (lassie faire). As a result, the most "fit" business would survive and benefit society (Social Darwinism).

What was the government's actual role during industrialization It did not tax businesses' profits. It did not regulate the relationship between employer and employee.

How did these changes affect Americans? Increased the income gap between the wealthy and the poor. Workers became over-worked and under-paid while owners became very rich. Rapid industrialization intensified the business cycle (period of boom and bust) because often times more goods were produced than could be sold so workers lost their jobs on a regular basis.

Summary: How did industrialization benefit business owners over employees? ( words):