Part I: Why Big Business is Good Defending the Corporation in American Society,

Why Big Business? A Growing National Market  Railroad Mileage: 46,000 in 1865, 238,000 in  Railroads: Faster, More Efficient, Operate in Night and Bad Weather.  National Goods Began Replacing Local Operations (Examples: Swift and Armour Meatpacking Companies)

Rise of a National Market Created Consumer Culture Example: Sears Catalog In 1880s

Why Big Business Becomes More Productive  Vertical Integration: “All parts of the production process—from raw materials to final product—are controlled by a company.”  Economies of Scale: “When producing more means producing more cheaply on a per unit basis.”  Example: James Bonsack’s Cigarette Machine

Was the Rise of Big Business Inevitable?  A. Probably Yes  B. No

Life Before Big Business: The Oil Industry Oil Fields Oil Transportation Refineries Retailers

John D. Rockefeller Integrated Oil Industry Oil Fields

John D. Rockefeller Integrated Oil Industry Oil Fields Oil Transportation

John D. Rockefeller Integrated Oil Industry Oil Fields Oil Transportation Refineries

John D. Rockefeller Integrated Oil Industry Oil Fields Oil Transportation Refineries Retailers

Why Rockefeller Was More Productive  Most efficient refining technology.  Not dependent on outside suppliers: own railroad cars, own barrels, own pipelines.  Frantic devotion to cutting costs: The glue example.  Economies of Scale: Price of Kerosene Falls

Big Business Pioneered New Management Techniques Middle Managers: More Prominent, More Important

The Virtues of Big Business: Andrew Carnegie  Poor Immigrant from Scotland  Tom Scott & Pennsylvania RR  From PA RR to Carnegie Steel

Carnegie Demonstrated “Virtues” of Big Business  Opportunity to All (Immigrants)

Carnegie Demonstrated “Virtues” of Big Business  Opportunity for All (Immigrants)  Continuous Technological Change

Carnegie Demonstrated “Virtues” of Big Business  Opportunity for All (Immigrants)  Continuous Technological Change  Lower Prices Revolutionize Economic Life (Survival of the Fittest)

Lower Prices Generally Benefit …  A. The Rich  B. The Lower and Middle Classes

Innovation Keeps Coming Oil Steel Automobile

“Giving it All Away”

Part II: Why Big Business Was Bad

Rich Societies Are Generally Happier than Poor Societies A.Yes B.No

Why Big Business Was Bad  Exploitation of Workers

Why Big Business Was Bad  Exploitation of Workers  Rise in Inequality

Why Big Business Was Bad  Exploitation of Workers  Rise in Inequality  Plight of Small Producers (End of Free Labor Ideology?)

Why Big Business Was Bad  Exploitation of Workers  Rise in Inequality  Plight of Small Producers (End of Free Labor Ideology?)  Big Business and Political Corruption