September 22

Capitalism or the Free Market Capital The money invested in a business to pay for the means of production (the factory, raw materials, transportation, labor/workers…) Entrepreneurs People who take a financial risk by investing their own money in a business in the hope of making a profit. Labor The workers Consumers People who purchase items/buyers Profit $ earned in a business after capital expenses are paid Free market- businesses are free to compete with each other to attract consumers to buy their products or services

Create a picture or write an example An entrepreneur Taking a risk to set up a business (show/explain where their capital comes from to display the risk) Show/explain what their capital costs are (labor, raw materials, rent, ads) Show/explain how they are competing on the free market Show how they are making their profit Also write 1 advantage and disad of capitalism

New Type of Business Entities Corporation- shared ownership of a business –Write two advantages and disadvantages to corporations Horizontal Integration- to consolidate many of the same firms into one business –Describe McDonald’s using horizontal integration. Vertical Integration- gaining control of the different businesses that make up all the phases of a product’s development. –Draw a picture or write a description of vertical integration with Nike tennis shoes. Four parts of production must be included. Corporation- shared ownership of a business –Write two advantages and disadvantages to corporations Horizontal Integration- to consolidate many of the same firms into one business –Describe McDonald’s using horizontal integration. Vertical Integration- gaining control of the different businesses that make up all the phases of a product’s development. –Draw a picture or write a description of vertical integration with Nike tennis shoes. Four parts of production must be included.

Monopoly- complete control by one company over the sale of a product or service. What are some advantages and disadvantages of monopolies?

“let it be…”  No gov’t interference in the market  Competition best for productivity and economic growth  No laws that will restrict business growth or interfere with free competition of business  No gov’t interference in the market  Competition best for productivity and economic growth  No laws that will restrict business growth or interfere with free competition of business Laissez Faire

Pursuing the American Dream The “self made man”  Horatio Alger [100+ novels] The “self made man”  Horatio Alger [100+ novels] “Rags to riches stories”

Standard Oil Co.

U. S. Corporate Mergers

The Reorganization of Work Frederick W. Taylor The Principles of Scientific Management (1911) Frederick W. Taylor The Principles of Scientific Management (1911)

The Reorganization of Work The Assembly Line

% of Billionaires in 1900

% of Billionaires in 1918

The Protectors of Our Industries

The ‘Bosses’ of the Senate

The ‘Robber Barons’ of the Past

Cornelius [“Commodore”] Vanderbilt Can’t I do what I want with my money?

Regulating the Trusts 1887  Interstate Commerce Commission (1CC)  Monitor railroads that cross state lines  Only oversight power- cannot pass laws or limit transactions 1890  Sherman Antitrust Act  Outlawed any trust that operated in “restraint of trade” among several states  More often used against labor unions! 1887  Interstate Commerce Commission (1CC)  Monitor railroads that cross state lines  Only oversight power- cannot pass laws or limit transactions 1890  Sherman Antitrust Act  Outlawed any trust that operated in “restraint of trade” among several states  More often used against labor unions!

Relative Share of World Manufacturing

Modern ‘Robber Barons’??