1. Industrialization
( )

2. Causes of Industrialization
Natural Resources
Population Growth
US population tripled b/t 1860 & 1910
31.5 million to 92.2 million
Improvements in Transportation
Transcontinental Railroad
Population Ticker

3. 1st Transcontinental Railroad (1869)
Railroads created the need for time zones

4. “let people do as they choose”
Laissez Faire
“let people do as they choose”
Economic system in which there is no government involvement
Only gov’t role is to protect property rights and maintain peace
Supply and Demand decide prices and wages
Basis of capitalism – our current economic structure in the United States

5. Adam Smith Wealth of Nations (1776) Invisible Hand
Self-interest guides the most effective use of resources in an economy
Supply and Demand Economics

6. Adam Smith (cont.) What people make the most money under this system?
Difficult and Dangerous Jobs = $$$
Specialization of Labor

7. Karl Marx ( )
Communism – an ideology that seeks to create a classless society in which the gov’t controls the means of production (economy). COMMAND economy.
An equality-based society
Community shares wealth
Same wages for all occupations

9. Capitalism-ish or Communism-ish?
Mrs. Houser decides to cut a rap album and to sell it in the school cafeteria.
The minimum wage
Pay for work past 40 hour
Federal regulation of housing prices
Public schools
I sell my own rap albums for $1 in order to put Mrs. Houser out of business and then raise my prices to $20

10. Economic Terms Corporation – business owned by multiple entrepreneurs
Pepsico, Altria, Proctor and Gamble,
News Corporation
25 Biggest Corporations
Stock – ownership in a business
Google, Apple
Pools – agreements to maintain prices at a certain level

11. More Terms Fixed Costs - $$$ a company has to pay all the time
Loans, mortgages, taxes
Operating Costs - $$$ a company must pay only when producing
Wages, utilities, shipping, materials, etc.

12. Here Come the Rockefellas
Vertical Integration
A business purchases other businesses that it depends on
Andrew Carnegie (US Steel)

13. Horizontal Integration
Combing firms in the same industry under one corporation
Buying out the competition
More control over prices
John Rockefeller
Standard Oil

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15. Changes Brought By Industrialization
Machine based factories – less manual labor
Poor working conditions
Lint, dust, toxic fumes
Increase in worker injuries
Standard of Living goes up
Real wages increase 50% b/t 1860 and 1890
22 cents an hour; 59 hours per week in 1900
Deflation – a rise in the value of money
Opposite of inflation
Factories tried to lower worker wages

16. Response to Conditions = Unions
Union - an organization of workers, formed to deal/negotiate with employers
Workers love ‘em – Employers hate ‘em

17. Attempts to Prevent Unions
Blacklist – union organizers fired and put on a list that was distributed
Lockout – union workers locked out of factory and not paid – scabs hired
Strikebreakers
Courts often ruled in favor of big business

18. The Great Railroad Strike of 1877
Upset with pay cuts following Panic of 1873’s recession
80,000 workers in 11 states
Fights b/t workers and state militias sent to quell the violence
100 dead, millions of $$$ in damage

19. A better way
Arbitration – allowing a third party to help workers and management reach an agreement
Wanted…
8 hr work day, no child labor, equal pay for women, worker- owned companies

20. American Federation of Labor
AFL – Samuel Gompers
Three goals
Convince companies to recognize unions
Closed shops
8 hour work day
500,000 members in 1900
AFL-CIO

24. Thomas Edison
The Wizard of Menlo Park