1. The Growth of Big Business
Chapter 13 Section2
The Growth of Big Business

2. Social Darwinism Survival of the fittest
Believed in little government interference

3. How did the theory of social Darwinism affect the government’s relationship to big business?
It encouraged government to take a hands-off approach to big business

4. Oligopoly
Occurs when to cost of starting a certain type of business is high

5. Monopoly
When a business gains complete control of a product or service

6. Cartel
A loose association of businesses that make the same product

7. Andrew Carnegie
Founded first plants to use Bessemer Process to produce steel

8. Gospel of Wealth A personal philosophy of Andrew Carnegie
Became a movement of the early 20th century

9. Gospel of Wealth Carnegie donated money to build 3,000 libraries
Supported art and research institutes

10. Vertical Consolidation
Business tactic of Andrew Carnegie

11. Economies of Scale
As production increases, the cost of each item produced is lower

12. John D. Rockefeller
Founded Standard Oil in 1870

13. Horizontal Consolidation
Business tactic of Rockefeller
Bringing together many firms in the same business (taking over your competitors)

14. How did methods such as vertical and horizontal consolidation, and factors such as economies of scale help companies dominate their markets?
Through horizontal consolidation, companies purchased competing companies
Through vertical consolidation and economies of scale, companies lowered production costs so much that other companies could not compete

15. Trust
Different firms in the same business (oil for example) being run as one company by a board of trustees

16. Sherman Antitrust Act
Outlawed any combination of companies that restrained interstate trade or commerce

17. Why did the Sherman Antitrust Act seek to stop big business from forming trusts?
Trusts threatened fair competition in industry
Trusts may cause prices to rise due to lack of competition

18. What were some features of the new big businesses?
Large amounts of capital
Wider geographic span
Broader range of operations (they make more than one thing)