1. The Free Enterprise System The Corporation Before the Civil War, most American businesses were owned by individuals or by a group of partners. After the Civil War, corporations became very common in the United States. A corporation is a company owned by shareholders who own stocks (a part of the company). The more stocks a person owns, then that person has a larger ownership of that company.

2. The Corporation Corporations allowed people to pool their money together and raise large amounts of money. Corporations allowed people to pool their money together and raise large amounts of money. This allowed companies to build railroad lines, coal and iron mines, steel mills, and factories. This allowed companies to build railroad lines, coal and iron mines, steel mills, and factories. Corporations made large modern production possible. Corporations made large modern production possible.

3. The Free Enterprise System The United States has an economic system called the free enterprise system. In an free enterprise system, individuals are free to produce and sell whatever they wish. In a free enterprise system, individuals are free to buy and use whatever they can afford. Individuals enjoy the freedom of making their own economic decisions.

4. In a free enterprise system, producers (individuals, companies) get to decide: What to produce and sell whatever they wish What to produce and sell whatever they wish What to pay employees What to pay employees What to charge customers for their goods What to charge customers for their goods Decisions in a free enterprise are only influenced by competition and supply and demand.

5. The main objective of individuals and companies in a free enterprise system is to make a profit. Several producers often make the same goods or offer the same services. This gives consumers a choice This increases competition while offering customers lower prices and higher quality.

6. Entrepreneurship and Philanthropy Entrepreneur-a person who starts a business in the hope of making a profit. In the 1870’s, after the Civil War, entrepreneurs began to dominate American economic life. Due to large-scale production, these entrepreneurs lowered the price of goods, making them more affordable, while also improving their quality. Entrepreneurs became very rich! These entrepreneurs became famous for their lavish lifestyles. Because of their lifestyle, the period after the Civil War (1865) until 1900 is known as the Gilded Age.

7. Entrepreneurship and Philanthropy Captains of Industry or Robber Barons? Some people considered these entrepreneurs “Captains of Industry” because they invented the modern industrial economy. Critics called them “robber barons” because they ruthlessly destroyed the competition and kept their employees wages low. Andrew Carnegie John D. Rockefeller

8. Andrew Carnegie Had iron ore fields, coal mines, and steel mills. His steel mills where in Pittsburgh, Pennsylvania. Paid his workers low wages, forced them to work 12 hour shifts, crushed their attempts to form labor unions. A great philanthropist (a person who gives away his wealth) He gave away $350 million in his lifetime (about $9 billion in today’s dollars). He gave libraries to most towns in America and gave to universities.

9. Carnegie wrote a book called “The Gospel of Wealth”. In this book, Carnegie stated that every wealthy person must give back most of his money to help the needy.

10. John D. Rockefeller Controlled the refining of oil. Forced to dissolve it when his company obtained a stranglehold (MONOPOLY) on the oil industry. Monopoly-a company having complete control over a product or service Like Carnegie, a great philanthropist

12. Monopolies The Pros and Cons of Monopolies Pros Large business are more efficient, leading to lower prices They can hire large number of workers They can produce goods in large quantities They have the money to invent new products Cons They have an unfair advantage against smaller businesses They sometimes take advantage of workers They sometimes pollute around their factories They have unfair influence over the government.

13. Laws Against Anti-Competitive Practices At first, the government did little to regulate big business. Government believed in laissez-faire. Laissez-faire-government should not interfere in the operation of a free market. However, the government decided to act when monopolies took over. Therefore, the US Government passed: INTERSTATE COMMERCE ACT (1887): This federal law made it illegal for railroads to charge unfair rates. The Interstate Commerce Commission was established to police the railroads. This was the first time that Congress stepped in to regulate business in America. SHERMAN ANTI-TRUST ACT (1890)-Made monopolies illegal.