The Age of Innovation and Industry US History Learning Target: I can identify the positive and negative impacts of Industrialization

Essential Vocabulary CapitalismCapitalism Definition: an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporationsDefinition: an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations

Essential Vocabulary Free EnterpriseFree Enterprise Definition: an economic and political doctrine holding that a capitalist economy can regulate itself in a freely competitive market through the relationship of supply and demand with a minimum of governmental intervention and regulation.Definition: an economic and political doctrine holding that a capitalist economy can regulate itself in a freely competitive market through the relationship of supply and demand with a minimum of governmental intervention and regulation.

Essential Vocabulary IndustrializationIndustrialization Definition: an economic organization of society built largely on mechanized industry rather than agriculture, craftsmanship, or commerce.Definition: an economic organization of society built largely on mechanized industry rather than agriculture, craftsmanship, or commerce.

Essential Vocabulary Labor UnionLabor Union Definition: an organization of wage earners or salaried employees for mutual aid and protection and for dealing collectively with employers.Definition: an organization of wage earners or salaried employees for mutual aid and protection and for dealing collectively with employers.

Essential Vocabulary SocialismSocialism Definition: a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.Definition: a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.

Inventions What do you think the three most important inventions created are?What do you think the three most important inventions created are? How have they changed life?How have they changed life?

Essential Question Was the rise of Industry good for the United States?Was the rise of Industry good for the United States?

Causes of Rapid Industrialization 1.Steam Revolution of the 1830s-1850s. 2.The Railroad fueled the growing US economy:  First big business in the US.  The key to opening the West.  Aided the development of other industries. 1.Steam Revolution of the 1830s-1850s. 2.The Railroad fueled the growing US economy:  First big business in the US.  The key to opening the West.  Aided the development of other industries.

Causes of Rapid Industrialization 3.Technological innovations.  Bessemer and open hearth process  Refrigerated cars  Edison o “Wizard of Menlo Park” o light bulb, phonograph, motion pictures. 3.Technological innovations.  Bessemer and open hearth process  Refrigerated cars  Edison o “Wizard of Menlo Park” o light bulb, phonograph, motion pictures.

Model T Automobile Henry Ford I want to pay my workers so that they can afford my product! Henry Ford I want to pay my workers so that they can afford my product!

“ Model T” Prices & Sales

U. S. Patents Granted 1790s  276 patents issued. 1990s  1,119,220 patents issued.

4.Unskilled & semi-skilled labor in abundance. 5.Abundant capital. 6.New, talented group of businessmen [entrepreneurs] and advisors. 7.Market growing as US population increased. 8.Government willing to help at all levels to stimulate economic growth. 9.Abundant natural resources. 4.Unskilled & semi-skilled labor in abundance. 5.Abundant capital. 6.New, talented group of businessmen [entrepreneurs] and advisors. 7.Market growing as US population increased. 8.Government willing to help at all levels to stimulate economic growth. 9.Abundant natural resources. Causes of Rapid Industrialization

New Business Culture 1.Laissez Faire  the ideology of the Industrial Age.  Individual as a moral and economic ideal.  Individuals should compete freely in the marketplace.  The market was not man-made or invented.  No room for government in the market!  Individual as a moral and economic ideal.  Individuals should compete freely in the marketplace.  The market was not man-made or invented.  No room for government in the market!

2. Social Darwinism × Adapted Darwin’s ideas × Notion of “Survival of the Fittest.” $ Individuals must have absolute freedom to struggle, succeed or fail. $ Therefore, state intervention to reward society and the economy is futile! × Adapted Darwin’s ideas × Notion of “Survival of the Fittest.” $ Individuals must have absolute freedom to struggle, succeed or fail. $ Therefore, state intervention to reward society and the economy is futile! Herbert Spencer

New Business Culture: “The American Dream?” 3.Protestant (Puritan) “Work Ethic”  Horatio Alger [100+ novels] 3.Protestant (Puritan) “Work Ethic”  Horatio Alger [100+ novels] Is the idea of the “self-made man” a MYTH??

New Type of Business Entities 1.Pool – a group making secret agreements, setting prices and determining business conditions 2.Trust – a combination of firms or corporations formed by a legal agreement headed by a small group. The goal of a trust is to reduce or eliminate competition. 1.Pool – a group making secret agreements, setting prices and determining business conditions 2.Trust – a combination of firms or corporations formed by a legal agreement headed by a small group. The goal of a trust is to reduce or eliminate competition.

New Types of Business Entities 2.Trust: * Horizontal Integration  John D. Rockefeller * Vertical Integration: A. Gustavus Swift  Meat-packing B.Andrew Carnegie  U. S. Steel C.John D. Rockefeller – Standard Oil B.Andrew Carnegie  U. S. Steel C.John D. Rockefeller – Standard Oil

New Type of Business Entities

Iron & Steel Production

U. S. Corporate Mergers

% of Billionaires in 1900

% of Billionaires in 1918

Big Business Emerges Andrew CarnegieAndrew Carnegie Steel Baron – 80% of American SteelSteel Baron – 80% of American Steel Management GeniusManagement Genius Gospel of WealthGospel of Wealth 90% ($325 million) donated to music, arts, and libraries90% ($325 million) donated to music, arts, and libraries John D. Rockefeller (*1 Billionaire in the US)John D. Rockefeller (*1 Billionaire in the US) Oil Baron – Standard Oil – 90% of American OilOil Baron – Standard Oil – 90% of American Oil Consolidate, compete, and dominateConsolidate, compete, and dominate Philanthropist - $500 million to U of C, foundations, and hospitalsPhilanthropist - $500 million to U of C, foundations, and hospitals J.P. MorganJ.P. Morgan Financial GeniusFinancial Genius Philanthropist – smaller scale but still huge $$Philanthropist – smaller scale but still huge $$

The Gospel of Wealth: Religion in the Era of Industrialization $ Inequality is inevitable and good. $ Wealthy should act as “trustees” for their “poorer brethren.” $ Wealth no longer looked upon as bad. $ Viewed as a sign of God’s approval. $ Christian duty to accumulate wealth. $ Wealth no longer looked upon as bad. $ Viewed as a sign of God’s approval. $ Christian duty to accumulate wealth.

Regulating the Trusts 1890  Sherman Antitrust Act  passed by Congress in 1890, it was an early attempt to try to control abuses by large combinations of businesses called trusts. It generally outlawed combinations of companies that acted in restraint of free trade  Sherman Antitrust Act  passed by Congress in 1890, it was an early attempt to try to control abuses by large combinations of businesses called trusts. It generally outlawed combinations of companies that acted in restraint of free trade.

Relative Share of World Manufacturing

Modern ‘Robber Barons’??