1. Econ Review

2. Capitalism People own businesses and land
Hard work is rewarded / Competition
Inequality among the classes
Some excel (A+) some fail (U)
Social Darwinism - Strong take advantage of the weak
Many capitalist countries use welfare programs to help the poor (partial socialism)
There are no purely 100% Capitalist or Socialist/Communist countries

3. Communism Government owns land and businesses
Wealth is shared among citizens
Everyone gets a D+ to a D-
Freedoms are limited, rule by force
Rule by 1 or the privileged few
Government decides pay / reward, where you work, benefits
Communism is often used to achieve Socialism
No reward for hard work

4. Socialism
Definition: A utopian (perfect) economic system, but most Socialists want greater “economic” equality not a perfect utopia
All the world’s problems stem from the rich taking advantage of the poor
Everyone has a job to do for society and everyone shares in the reward.
Similar pay for most jobs, Not as large a pay scale
Society is more important than the individual

5. 2nd Industrial Revolution
Gilded Age

6. Business Culture “Terms”
Social Darwinism – Some individuals work harder, are smarter, and deserve more rewards
Survival of the fittest / strongest
Capitalism – People own land & businesses to make a profit; as they compete to make a profit consumers benefit
AKA Free Enterprise System
Entrepreneur – People who start their own business

7. Beginnings of Class Conflict
Numerous inventions at the end of the 19th century led to a 2nd industrial revolution
3 distinct classes arose in cities
Wealthy – Factory Owners
Middle Class – Factory Bosses / Managers
Working Class – Assembly Line Worker

8. Competing Views on Business and Government
Due to the extreme examples of wealth and privilege the era becomes known as “Gilded Age”
For workers, it’s the opposite; suffering, long hours, little pay
Conflict between rich and poor raises questions about who is to blame for poverty and the role of our government in addressing those problems

9. Are they Captains or Robbers

10. Business Leaders John D. Rockefeller – Standard Oil
Andrew Carnegie – Carnegie Steel
Bessemer Process – Caused the US to become the leading steel producer
Cornelius Vanderbilt – Railroad Tycoon
JP Morgan – Banking
Jay Gould – Railroads

11. The Govt., Rich, and Workers
Our government’s job is to ensure our peace and prosperity
Government and business leaders became natural allies
However, during the 2nd IR, the gap between the rich and powerful and working poor grew
Fuels massive class conflict

12. 2 Views of the wealthy develop in the US
Robber Barons - Negative
Captains of Industry – Positive

13. Captains of Industry
Wealthy business leaders have earned what they have through hard work, dedication (smarter)
Provided Jobs
Created New Products
Pay Taxes to the govt.
Philanthropy – giving large sums of money to charity
Carnegie gave millions to public libraries
“Gospel of Wealth”
Many gave to universities

14. Robber Barons
Robber Barons became a common nickname for Capt. of Ind. among the working class
They got unbelievably rich while workers lived in tenements (slums)
Workers worked long hours in unsafe conditions for little pay and no benefits
No Insurance, Overtime, Vacations
You get hurt you get fired
Kids worked the same hours as adults

15. The Govt., Rich, and Workers
Corporation – Large business, buy stock
Get a cut of the company profits
Trust / Monopoly – Companies in a field join together
Prices go up, quality down
Laissez faire – Govt. did not regulate businesses; working conditions or trade
Which caused Corruption
Raised the question of class conflict again and if govt. favored the rich

16. Business Owners & Political Corruption
Govt. allowed / helped companies to produce products people needed, especially railroads
Viewed as a benefit to all Americans
Business owners made huge fortunes making these produces
Rich donated heavily to politicians
Again raised question if govt. only cared about the rich, especially when scandals made the news

17. Credit Mobilier – VP of Union Pacific Railroad (congressman) sold land to members of Congress below value
Also charged the govt. millions more to build railroads than they cost
Credit Mobilier and his friends scandals almost cost President Grant his reelection bid

18. Populism and the Rise of the Unions

19. Populist Movement
Populism – Political party created to bring greater equality to the working class / common man
A short depression led to political populist support
Increased focus on class conflict
Rich vs. poor

20. Government’s Role in Poverty?
Western Life – Wood shortages, Homes of dirt & buffalo chips, huge families for labor, very lonely, hot summers cold winters
National Grange – Poor Farmers united to try to lower railroad rates (monopoly)
“Populists”
Populists call for increased regulation of businesses and/or govt. ownership of some businesses

21. Water, Electric, Railroads
Things necessary for daily life
Interstate Commerce Act – US govt. regulated railroad rates
1st time ever govt. regulated a business
Considered a victory by poor farmers over rich railroad owners

22. The Gold Standard
Populists campaigned to change US money system, by adding silver
More money for working poor
Fear of rapid inflation
William Jennings Bryan “Man should not be crucified to a Cross of Gold”
Terrified business leaders donated heavily to Republican William McKinley’s victory

23. Working Conditions Triangle Shirt Waist Fire
140 women died in a factory “sweatshop” fire
Bosses had locked many doors to prevent theft or workers leaving early
Fire escapes were old and rusty; Broke as workers stampeded the exits
Building was too tall for fire ladders
Led to numerous new safety laws

25. Union Terms
Unions – Workers banded together for better hours, pay, conditions
Strikes and boycotts were common tactics
Strike – Refusal to work
Boycott – Refusal to buy a product
Scab – A worker who replaces a worker on strike

26. Business vs. Labor
Knights of Labor and the American Federation of Labor (Samuel Gompers) were early unions
Common issues were the 8 hour workday, better pay, safer work environment, and an end to child labor
Argument over who can join a union
Skilled vs. Unskilled workers
Skilled workers (welders, electricians, etc.) make a lot more than unskilled

27. Famous Strikes
Haymarket Riot – Unions struck over wage cuts; riot broke out after police attacked strikers; 11 dead
Homestead Strike – Union struck over wages; Carnegie hired mercenaries to end the strike; 16 dead
Great Railroad Strike – Unions struck over wage cuts; conflict led to the army ending the strike

28. Pullman Strike – Union struck over wages & layoffs; army ended the strike since it interfered with mail delivery
Eugene V Debs
4 time socialist candidate for President

30. Owners Retaliate
Blacklists – Business owners tried not to hire union members / leaders
Forced workers to sign papers promising not to join unions – Yellow Dog Contract
All 3 branches of US govt. routinely sided with the owners
Owners as robber barons became the norm

31. More Unions, More Radical
As existing unions fought over who could join (Skilled vs. Unskilled) more sprang up
Industrial Workers of the World (IWW) “Wobblies” – Led by Big Bill Haywood
Used strikes and boycotts, would also use sabotage in the factories

32. Mixed success, US govt. cracked down on the group and they fell apart
Fueled fear that unions were anarchists, socialists, and anti-US