1. Inspiring a Nation: Invention to Industrialization Mrs. Post – American Cultures 2 Adapted from Susan Pojer -pptpalooza.com “Rise of Big Business”

2. Essential Question Does Invention promote society or society promote invention?

3. Causes of Rapid Industrialization 1.Steam Revolution of the 1830s-1850s. 2.The Railroad fueled the growing US economy:  First big business in the US.  A magnet for financial investment.  The key to opening the West.  Aided the development of other industries. 1.Steam Revolution of the 1830s-1850s. 2.The Railroad fueled the growing US economy:  First big business in the US.  A magnet for financial investment.  The key to opening the West.  Aided the development of other industries.

4. The Cycle of Business Late 1800’s

5. Understanding Economics Profit drives business = to make profit you subtract all of your cost from your total sales More risk = higher returns Laissez-faire Capitalism = business is free from government regulations Free Enterprise = freedom of choice (buy, sell, manufacture)

6. Causes of Rapid Industrialization 3.Technological innovations.  Bessemer and open hearth process Bessemer  Refrigerated cars  Edison Edison o “Wizard of Menlo Park” o light bulb, phonograph, motion pictures. 3.Technological innovations.  Bessemer and open hearth process Bessemer  Refrigerated cars  Edison Edison o “Wizard of Menlo Park” o light bulb, phonograph, motion pictures.

7. Thomas Alva Edison “Wizard of Menlo Park”

8. The Light Bulb

9. The Phonograph (1877)

10. The Ediphone or Dictaphone

11. The Motion Picture Camera

12. Alexander Graham Bell Telephone (1876)

13. Alternate Current George Westinghouse

14. Alternate Current Westinghouse Lamp ad

15. The Airplane Wilbur Wright Orville Wright Wilbur Wright Orville Wright Kitty Hawk, NC – December 7, 1903 Kitty Hawk, NC – December 7, 1903

16. Model T Automobile Model T Automobile Model T Automobile Model T Automobile Henry Ford I want to pay my workers so that they can afford my product! Henry Ford I want to pay my workers so that they can afford my product!

17. “Model T” Prices & Sales

18. U. S. Patents Granted 1790s  276 patents issued. From 1870-1890s  440, 400 patents issued 1790s  276 patents issued. From 1870-1890s  440, 400 patents issued 1990s  1,119,220 patents issued.

19. √Unskilled & semi-skilled labor in abundance. √Abundant capital. √New, talented group of businessmen [entrepreneurs] and advisors. √Market growing as US population increased. √Government willing to help at all levels to stimulate economic growth. √Abundant natural resources. √Unskilled & semi-skilled labor in abundance. √Abundant capital. √New, talented group of businessmen [entrepreneurs] and advisors. √Market growing as US population increased. √Government willing to help at all levels to stimulate economic growth. √Abundant natural resources. Causes of Rapid Industrialization

20. Essential Question In what ways did industrial leaders influence American society? In what ways did industrial leaders influence American society?

21. Middle Management is Born As companies grew, more difficult for owners to oversee Created Departments More employees Faster production Specialization AFTER BEFORE

22. Welcome to Department Stores! Competed with & replaced small stores & markets Add convenience of one stop shopping Stores began advertising

23. How Business Grew The art of Mergers = –business leaders would buy out competitors to expand their corporations Corporations would combine together to create Trusts = –all stock together run by a board of trustees (owners) What does this do? = –eliminates competitors Monopolies resulted from mergers (trusts)

24. New Business Culture 1. Laissez Faire  the ideology of the Industrial Age.  Individual as a moral and economic ideal.  Individuals should compete freely in the marketplace.  No room for government in the market!  Individual as a moral and economic ideal.  Individuals should compete freely in the marketplace.  No room for government in the market!

25. 2. Social Darwinism × British economist. × Advocate of laissez-faire. × Adapted Darwin’s ideas from the “Origin of Species” to humans. × Notion of “Survival of the Fittest.” × British economist. × Advocate of laissez-faire. × Adapted Darwin’s ideas from the “Origin of Species” to humans. × Notion of “Survival of the Fittest.” Herbert Spencer

26. 3. Social Darwinism in America William Graham Sumner Folkways (1906) $Individuals must have absolute freedom to struggle, succeed or fail. $Therefore, state intervention to reward society and the economy is futile! $Individuals must have absolute freedom to struggle, succeed or fail. $Therefore, state intervention to reward society and the economy is futile!

27. Birth of the Robber Baron Industry leaders who eliminate competitors and take any means necessary to make money Mansions, Money & Parties –Think “Great Gatsby” Blame problems on poor Ruthless business ethics

28. The Good side of Greed 2% of people held 20% of wealth in the country Robber Barons were philanthropist –Giving element of Social Darwinism –“give to the poor” Charities on the rise –Andrew Carnegie funded libraries and arts education (museums, concert halls), 350M –Vanderbilt 50K to churches, funded university –Rockefeller, 80M to Univ. of Chicago –JP Morgan paid national debt off –Ford, Ford Foundation for Education

29. % of Billionaires in 1900

30. % of Billionaires in 1918

31. “Trust” me Trust = combining of companies to dominate an industry Standard Oil Trust  John D. RockefellerStandard Oil Trust  John D. Rockefeller Pushed small businesses out of businessPushed small businesses out of business MonopolyMonopoly Trust = combining of companies to dominate an industry Standard Oil Trust  John D. RockefellerStandard Oil Trust  John D. Rockefeller Pushed small businesses out of businessPushed small businesses out of business MonopolyMonopoly

32. Standard Oil Co.

33. Horizontal Integrations John D. Rockefeller This is how he made his millions Acquiring companies that compete with your initial product Buying out competitors = monopoly -> control prices of goods

34. Let’s Merge FordGMCVolvo

35. Vertical Integration Andrew Carnegie was the professional Vertical Integrator –This is how he made his millions Acquiring companies that sell the supplies and sell the supplies and services that create your initial product Controlling each stage of production = lowest $ -> eliminate competitors -> eliminate competitors

36. Let’s Merge FordGMCVolvo

37. New Type of Business Entities

38. U. S. Corporate Mergers

39. Notable Robber Barons The Broker:  J. Pierpont Morgan The Broker:  J. Pierpont Morgan

40. Wall Street – 1867 & 1900

41. Notable Robber Barons The Car Salesman:  Henry Ford The Car Salesman:  Henry Ford

42. The Reorganization of Work The Assembly Line

43. Cornelius [“Commodore”] Vanderbilt Can’t I do what I want with my money?

44. William Vanderbilt $ The public be damned! $ What do I care about the law? H’aint I got the power? $ The public be damned! $ What do I care about the law? H’aint I got the power?

45. Andrew Carnegie “Eureka! We have found it. Here was something new to all of us, for none of us had ever received anything but from toil.” – 1 st profits (text, p. 173)

46. “On Wealth” Andrew Carnegie $ The Anglo-Saxon race is superior. $ “Gospel of Wealth” (1901). $ Inequality is inevitable and good. $ Wealthy should act as “trustees” for their “poorer brethren.” $ The Anglo-Saxon race is superior. $ “Gospel of Wealth” (1901). $ Inequality is inevitable and good. $ Wealthy should act as “trustees” for their “poorer brethren.”

47. The Gospel of Wealth: Religion in the Era of Industrialization $ Wealth no longer looked upon as bad. $ Viewed as a sign of God’s approval. $ Christian duty to accumulate wealth. $ Should not help the poor. $ Wealth no longer looked upon as bad. $ Viewed as a sign of God’s approval. $ Christian duty to accumulate wealth. $ Should not help the poor.

48. The Protectors of Our Industries

49. The ‘Bosses’ of the Senate

50. The ‘Robber Barons’ of the Past

51. Regulating the Trusts 1890  Sherman Antitrust Act  in “restraint of trade”  “rule of reason” loophole  Monopolies Illegal – Never defined “monopoly” 1890  Sherman Antitrust Act  in “restraint of trade”  “rule of reason” loophole  Monopolies Illegal – Never defined “monopoly”