1. RISE OF BIG BUSINESS Late 19 th century

2. THE ‘ROBBER BARONS’ OF THE PAST

3. IRON & STEEL PRODUCTION

4. U. S. CORPORATE MERGERS

5. 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.  A magnet for financial investment.  The key to opening the West.  Aided the development of other industries.  Middle Management 1.Steam Revolution of the 1830s-1850s. 2.The Railroad fueled the growing US economy:  First big business in the US.  A magnet for financial investment.  The key to opening the West.  Aided the development of other industries.  Middle Management

6. 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

7. 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!

8. 2. SOCIAL DARWINISM × British economist. × Advocate of laissez-faire. × Adapted Darwin’s ideas from the “Origin of Species” to humans. × Notion of “Survival of the Fittest.” × British economist. × Advocate of laissez-faire. × Adapted Darwin’s ideas from the “Origin of Species” to humans. × Notion of “Survival of the Fittest.” Herbert Spencer

9. 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??

10. 2. ANDREW CARNEGIE “MAN OF STEEL” a. Management techniques i. Hired talented workers 1.Offered stock 2.Competition = increased production/lower costs ii. Better products cheaper b. “Winning” Strategy i. Vertical integration 1. Buy out all of your suppliers 2. Control quality and costs

11. 3. JOHN D. “SLICK” ROCKEFELLER a.Standard Oil Company b.Owned 90% of refining business c.Treated employees poorly d.“anything goes”/bend the rules e.Winning Strategy i. Horizontal consolidation 1.Merging of companies with similar products; oil companies

12. NEW FINANCIAL BUSINESSMAN The Broker:  J. Pierpont Morgan The Broker:  J. Pierpont Morgan

13. % OF BILLIONAIRES IN 1900

14. % OF BILLIONAIRES IN 1918

15. RELATIVE SHARE OF WORLD MANUFACTURING

16. 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. 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.

17. 1. John D. Rockefeller—336 billion 1. John D. Rockefeller—336 billion 2. Andrew Carnegie-309 billion 2. Andrew Carnegie-309 billion 3.Bioll Gates (peak : 136 billion) 3.Bioll Gates (peak : 136 billion)