Yankee Ingenuity Electricity –How does this change American life? Communications –Why is more information better? Or is it? Heavy Industry –steel –coal mining –oil

Relative Share of World Manufacturing

Essential Question What factors led to a change in American business growth in the late 19 th century?

Productivity Producing more, so prices go down –cost of living –standard of living –what to do with surplus?

Unstable Markets Instability –recessions and depressions –bankruptcy –unemployment connections between an expanding market and unstable markets

New Business Culture Laissez Faire  the ideology of the Industrial Age.  Individuals should compete freely in the marketplace.  The market was not man-made or invented.  No room for government in the market! The “invisible hand” of economics.  Individuals should compete freely in the marketplace.  The market was not man-made or invented.  No room for government in the market! The “invisible hand” of economics.

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

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

“On Wealth” Andrew Carnegie $ “the man who dies rich, dies disgraced.” $ “Gospel of Wealth” (1901). $ Noblese oblige $ The Purtian ethic. $ Rugged indiviuslism $ “the man who dies rich, dies disgraced.” $ “Gospel of Wealth” (1901). $ Noblese oblige $ The Purtian ethic. $ Rugged indiviuslism

Socially Beneficial Projects Carnegie Hall

Socially Beneficial Projects Carnegie-Mellon University

Socially Beneficial Projects Renton Public Library

Rockefeller John D. Rockefeller Standard Oil Co. creation of vertical monopolies John D. Rockefeller Standard Oil Co. creation of vertical monopolies

Standard Oil Co.

What’s a Trust? A combination of firms or corporations. This means their may be multiple business but they are operated by one entity.

New Type of Business Entities Trust:  Vertical Integration  John D. Rockefeller Trust:  Vertical Integration  John D. Rockefeller  Horizontal Integration: o Gustavus Swift  Meat-packing o Andrew Carnegie  U. S. Steel  Horizontal Integration: o Gustavus Swift  Meat-packing o Andrew Carnegie  U. S. Steel

Pros and Cons of Trusts Negatives Raise prices Forces smaller companies out Positives Reduces waste New & efficient equipment Large quantities = lower prices R & D

U. S. Corporate Mergers

% of Billionaires in 1900

% of Billionaires in 1918

Regulating the Trusts 1877  Munn. v. IL 1886  Wabash, St. Louis & Pacific Railroad Company v. IL 1890  Sherman Antitrust Act  in “restraint of trade”  “rule of reason” loophole 1895  US v. E. C. Knight Co  Munn. v. IL 1886  Wabash, St. Louis & Pacific Railroad Company v. IL 1890  Sherman Antitrust Act  in “restraint of trade”  “rule of reason” loophole 1895  US v. E. C. Knight Co.

The ‘Robber Barons’ of the Past

The Protectors of Our Industries