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

2. Robber Barons Business leader who made fortune by stealing from public. Drained natural resources, paid low wages to workers, required long hours of employees

3. 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.

4. “Robber Barons”

5. 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.

6. 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

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

8. Andrew Carnegie

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

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

11. “Gospel of Wealth” “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.

12. 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 (OPEC)

13. John D. Rockefeller Formed Standard Oil Company

14. 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

15. 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) 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 Trusts limit competition and cause prices to rise

16. Which Led to the Sherman Antitrust Act Enacted in 1890 Effort by Congress to end trusts Ineffective due to lack of enforcement More about it in future units

17. Vertical Integration/Consolidation Controlling businesses related to various phases of production for a product Own all elements of a business Carnegie Steel/Andrew Carnegie

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

19. Horizontal Integration/Consolidation When all of your competitors have been bought out Think MONOPOLY Standard Oil Company/John D. Rockefeller

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

21. Business Cycle The growth and contraction of a nation’s economy – New Problem in the late 1800s

22. Industrial Revolution Working Conditions

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

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

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

26. Division of Labor Changes Manufacturing one task When someone completes one task as part of the job Positive Positive: MASS PRODUCTION – it increases business productivity Negative Negative: workers no longer take pride in work and removes creativity

27. Think About Making Shoes as an Example of This Concept! He may never work on shoes!