1. Industrial Revolution
Working Conditions

2. Division of Labor Changes Manufacturing
When someone completes one task as part of the job
Positive: increases productivity for businesses
Negative: workers no longer take pride in work and removes creativity

3. Think About Making Shoes
He may never work on shoes!

4. Growing Work Force
Immigrants
Former Farm Families
Women and Children
Does not include African Americans

5. Survival Guide for Poor Families (aka, immigrants!)
Send children as young as age 6 to work
Force children to leave school
Ask for aid from a private charity (church, etc.) Government Welfare is non-existent at this time!

6. Workday Length
Typically 12 hours/day, 6 days/week

7. The Growth of Big Business
The Good and The Bad

8. Robber Barons
Business leaders who made fortune by taking advantage of others.
Drained natural resources, paid low wages to workers, required long hours of employees

9. “Robber Barons”

10. They persuaded public officials to interpret laws in their favor.
They ruthlessly drove their competitors to ruin.
Paid their workers meager wages and forced them to toil under dangerous and unhealthful conditions.

11. Captains of Industry
The business leaders served their nation in a positive way.
Increased the supply of goods by building factories.
Raised productivity and expanded markets.

12. Created jobs that enabled many Americans to buy new goods and raise their standard of living.
Also created museums, libraries, and universities, many of which still serve the public today.
Carnegie Hall

13. Robber Baron versus Captain of Industry
Robber Baron – negative
Captain of Industry – positive

14. Andrew Carnegie

15. Andrew Carnegie Captain of Industry for steel production in Pittsburgh
Used Bessemer Process to produce stronger steel
Utilized vertical integration or consolidation
Scottish Immigrant

16. Carnegie as a Philanthropist
A Philanthropist uses wealth to improve society
Carnegie funded the building of libraries, education facilities, and music/arts facilities

17. “Gospel of Wealth”
Carnegie’s philosophy - A person should be able to make as much money as they can, BUT they should also use their wealth to improve society.

18. Social Darwinism
Based on Darwin’s Theory of Evolution (1859) regarding natural selection and survival of the fittest
Businessmen are justified in using any means to become rich and powerful – the government should stay out!

19. American businessmen adopted eagerly the ideology of Social Darwinism in order to defend their business practices as "natural."
James J. Hill, a leading "Robber Baron" of the railroad-building era, saw the chance to justify his actions with "scientific" terminology:
"The fortunes of railroad companies are determined by the law of the survival of the fittest." --James J. Hill

20. Monopoly vs. Cartel
Monopoly – one company with complete control of a product or a service
Cartel – a loose association of businesses in a similar field or that make the same product and agree to limit supply to drive up prices

21. Formed Standard Oil Company
John D. Rockefeller
Formed Standard Oil Company

22. John D. Rockefeller and the Standard Oil Company
Wealthy individual who saw the oil industry as a way to get richer
Made illegal deals with railroads to transport oil cheaper, thus weakening other refineries that he would eventually buy
Utilized horizontal integration or consolidation for business purposes

23. Also important re: Standard Oil ... Trusts
A group of separate companies that are placed under the control of a single managing board (Board of Directors)
Trusts limit competition and cause prices to rise

24. What’s so bad about Monopolies?
They underpay workers and drive competitors out of business
They offer consumers NO CHOICE!
Prices rise and quality falls!

25. Which Led to the Sherman Antitrust Act
Enacted in 1890
Effort by Congress to end trusts
Ineffective due to lack of enforcement

26. How Do I Get a Monopoly?

27. Vertical Integration/Consolidation
Buying out or controlling businesses related to various phases of production for one product
Carnegie Steel/Andrew Carnegie

28. Controlling the Market
Using Vertical Integration, Bob could control the Pizza market in town by controlling many of the costs associated with making his pizza!
Bob’s Pizza
Bob’s Trucking Company
Bob’s Cheese Factory
Bob’s Farm

29. Horizontal Integration/Consolidation
When you buy out all of your competitors (firms that are part of the same business)
Standard Oil Company/John D. Rockefeller

30. Controlling the Market
Bob’s Pizza
Delaware
Pizza
Happy Time
Pizza
Pizza Pizza
Using Horizontal Integration, Bob could control the Pizza market in town by buying the other Pizza shops!
Bob’s Pizza
Bob’s Pizza
Bob’s Pizza
Bob’s Pizza

31. Business Cycle The growth and contraction of a nation’s economy
growth peak recession depression
Business Cycle
The growth and contraction of a nation’s economy
A new concept in the mid-late 1800s