1. Big Business and Organized Labor
Chapter 18 – Section 2
Big Business and Organized Labor

2. New Ways of Doing Business Entrepreneur’s and corporations
An entrepreneur is a person who sets up a new business to make a profit.
In order raise capital (money) entrepreneur’s became corporations  meaning they sold stocks or shares of their company.
Why would anyone just give a company money?
They expected a profit from the sale of that stock when the company did well!
Only risk the money you initially pay for the stock. (much less risky than before!)

3. Wall Street – 1867 & 1900

4. New Financial Businessman
The Broker:
J. Pierpont Morgan

5. Growth of Big Business New Business Culture
Laissez Faire  the ideology of the Industrial Age.
Individuals should compete freely in the marketplace.
No room for government in the market
Laissez Faire attitude of the government toward business created companies that were monopolies. They controlled most or all business in a particular industry!

6. The New Way of Business Business
Trust  John D Rockefeller
His company  Standard Oil Co.
Was a trust because his group of corporations was run by one single board of directors!

7. Standard Oil Co.

8. New Type of Business Entities
Two ways of creating Trusts:
1. Horizontal Integration  John D Rockefeller
2. Vertical Integration:
Gustavus Swift  Meat-packing
Andrew Carnegie  U. S. Steel

9. New Type of Business Entities

10. Iron & Steel Production

11. U. S. Corporate Mergers

12. Are Trusts Good or Bad? Some people saw trusts as bad because:
They said it was a threat to the free enterprise system and limited competition.
Also business leaders used their influence and wealth to control the government.
Some people saw trusts as good because:
They built up the economy and created jobs.
They said that by limiting costly competition they would be able to lower their price to the consumer.

13. The ‘Robber Barons’ of the Past

14. Social Darwinism
Comes from Charles Darwin’s ideas from the “Origin of the Species” to humans
Charles Darwin applied his ideas of “Survival of the fittest” to the species of the world, but in the early 1900’s it was applied to big business!
Those who survived and drove out competition must be the “fittest” and deserve it

15. Social Darwinism in America
Individuals must have absolute freedom to struggle, succeed or fail.
Therefore, state intervention to reward society and the economy is futile!
In other words  the philosophy of the times was that government needs to keep their hands off and out of the way of “Big Business”!

16. The ‘Bosses’ of the Senate

17. % of Billionaires in 1900

18. % of Billionaires in 1918

19. The Gospel of Wealth: Religion in the Era of Industrialization
Wealth no longer looked upon as bad.
Viewed as a sign of God’s approval.
Christian duty to accumulate wealth.
Should not help the poor.
Russell H. Conwell

20. “On Wealth” The Anglo-Saxon race is superior.
“Gospel of Wealth” (1901).
Inequality is inevitable and good.
Wealthy should act as “trustees” for their “poorer brethren.”
Andrew Carnegie

21. Relative Share of World Manufacturing

22. Changes in the Workplace
The relationship between the workers and their boss became much less personal when industry grew.
In some industries, such as textile mills, the majority of the workers were women.
It was not uncommon for children as young as eight to work in mills, mines, factories, and sweatshops.
Many dangers in factories and every worker was replaceable!

23. Workers Organize!
Had to be secretive because you could be fired for joining if you boss found out!
Fought for:
Safer working conditions
Higher wages
Shorter hours

24. Two types of Unions
Knights of Labor (Terence Powderly) – became biggest union in the nation because it allowed women, blacks, immigrants, and unskilled workers!
2. American Federation of Labor or AFL (Samuel Gompers) – skilled workers only because this allowed for collective barganing which led to more of an ability to meet demands of the union.

25. Labor Strikes
1893  economic depression caused many people to be without a job, and those who had a job were paid less than before.
This resulted in strikes all over.
Pullman strike one of the most famous.
George Pullman cut his workers wages by 25%, but expected them to pay the same for the mandatory housing they lived in.
Angry workers went on strike to protest.
Not all labor disputes were peaceful, some were violent and associated with being the fault of radicals that belong to unions
By 1900 only 3% of Americans belonged to a union.