1. The Rise of Big Business

2. Corporations Develop
Until 1900’s families owned small businesses that were local
Corporations form that are owned by many people, had the same rights as citizens
Corporations increase their profits by:
Paying low wages…upsets workers
Broadened their advertising base
Invested in inventors
Many corporations formed monopolies in which they controlled the entire market (no competition)
Using vertical and horizontal integration

3. Entrepreneurs that were seen as serving the nation in a positive way
“Robber Barons”
“Captains of Industry”
Entrepreneurs who built monopolies that were unfair to consumers
Swindled the poor
Bought out competitors
Seen as bad for the economy
Rockefeller
Entrepreneurs that were seen as serving the nation in a positive way
Creating jobs
Stimulated innovation
Were charitable
Carnegie

4. Social Darwinism “Survival of the fittest” promoted by Charles Darwin
wealth was a measure of one’s inherent value and those who had wealth were most fit
Only the wealthy should rise to the top
Don’t use public funds to help the poor
Said that the impoverished were unfit to reproduce
Complete opposite of Gospel of Wealth

5. Horatio Alger
In his books, Alger told stories of young men who won wealth and fame by being honest and hardworking
Advised Americans to seek success based on values
Success through the strengths of their own efforts

6. John D. Rockefeller Established the Standard Oil Company
Bought up smaller oil companies to create his own company (horizontal integration)
Bought the oil wells, pipelines, retail outlets and railroads
Created a monopoly for the oil industry
Controlled 90% of the oil in America

7. Andrew Carnegie Steel tycoon
Used the Bessemer process to mass produce steel
Teamed up with J.P. Morgan to find investors in RR so that the demand for steel would increase
Helped Carnegies create the industrial giant US Steel

8. Gilded Age
A term coined by Mark Twain that describes the last decade of the 19th century
Said that America had a rotten core but was covered with gold paint (gilded)
Describes how on the outside America looked wealthy (gold paint) and prosperous but there was poverty and despair (rotten core) underneath all the wealth
The gap between the rich and the poor was too wide

9. Other Entrepreneurs Cornelius Vanderbilt: George Westinghouse:
Made millions from the shipping and railroad business
Became a symbol of the excesses during the Gilded Age
George Westinghouse:
Developed air brakes and a device that allowed trains to switch from one track to another

10. Government Regulation of Big Business
Laissez-faire: little government interference in the economy
An American tradition
But the stronghold that these capitalists had on the economy worried the government
Interstate Commerce Commission set up to regulate railroads
Sherman Antitrust Act outlawed monopolies and trusts (companies owned by stockholders)…but not really enforced