1. Warm up – 1/30
Please begin quietly working on the Philosophies of Industrialists handout on your desk. Please answer the 2 questions on each excerpt.
During this time, please have your notebook/notes out for a note check (participation grade).

2. New Business Strategies
Horizontal Integration
Combining a number of firms engaged in same enterprise into a single corporation
Vertical Integration
Taking over all different businesses on which that company relied on

3. Vertical vs Horizontal
VERTICAL MONOPOLY
Control every stage of industrial production
HORIZONTAL MONOPOLY
Control the vast majority of the market for that product or service

4. Andrew Carnegie Steel Tycoon—Carnegie Steel Company
Net worth- $309 Billion (In today’s money)
Rags to Riches- Scottish immigrant
Donated to establish Libraries, schools, universities
“Gospel of Wealth”

5. Carnegie Steel Company
Founded- 1892
Used Bessemer Process to make steel
Lowered prices to drive out competition; included lowering wages and investing in new, efficient technology

6. John D. Rockefeller Oil tycoon Standard Oil Company
Predatory pricing, buyouts and efficiency destroyed competition

7. At his peak, Rockefeller was said to be worth $200 billion
Rockefeller, cont.
The Standard Oil Trust
Owned one step in each industrial process
RR gives large rebates due to large usage
At his peak, Rockefeller was said to be worth $200 billion

8. JP Morgan Financier, Banker Arranged Mergers
General Electric
Had influence in many large corporations in America
Creation of U.S. Steel, AT&T

9. OTHER GREAT ENTERPRENEURS
George Pullman– Railroad Cars
Railroad strike ruined business
Cornelius Vanderbilt – Transportation/Shipping
Worth $143 Billion (Today’s $)

10. Rags to Riches Mentality
Horatio Alger, Jr. – an American author
Stories of poor people who worked hard and gained wealth and fame
Anyone who works hard can escape poverty
Idea of self-made man- Powerful myth

11. How rich were the “robber barons” compared to Microsoft founder Bill Gates?

12. Social Darwinism Herbert Spencer Used to justify industrialists’ power
British Economist
Adopted Darwin’s ideas to humans
Society benefited form the elimination of the unfit and survival of the strong and talented
Used to justify industrialists’ power

13. Gospel of Wealth Andrew Carnegie “The Gospel of Wealth” 1902
Wealthy should consider all income in excess of their own needs to be used for the good of the community

14. Justifications for Industrialists’ Extreme Wealth
Social Darwinism
Herbert Spencer
Based on Charles Darwin’s theory of evolution
Rich are more fit, than those who are poor
Use science to explain social classes
Gospel of Wealth
Andrew Carnegie
God gave wealth to the most capable people
Duty of the wealthy to give money to help the poor

15. “Robber Barons” v. “Captains of Industry”
Monopolies with an unfair advantage
Small businesses bought out or destroyed
Unfair high prices for consumers
Businessmen served the country positively
Provided jobs, developed efficient business practices
Philanthropists