The Growth of Big Business

The Growth of Big BusinessI. Businesspeople & Investors pool

resources to create huge companies

A. Robber Barons or Captains of Industry?

Robber Baron or Captain of Industry?

1. Robber Baron – steal from public to build fortunes, exploit workers, etc.

2. Captains of Industry – Serve nation in a positive way by create jobs, etc.

3. Most were both!

Question 1

• What is your general opinion of “big business” in America? How do you view the owners of these major corporations, etc.?

• Is “big business” good for the American economy and consumers?

• Do you think the owners of major corporations are inherently more talented than other businessmen?

II. Social DarwinismA. Society & Government should do as little as

possible to interfere with someone’s pursuit of success. – laissez- faire

B. Those “fit” would succeed and become rich, those “unfit” would not

C. Survival of the fittest

Question 2

• Do you agree with the concept of Social Darwinism? Explain.

Andrew Carnegie

III. Andrew CarnegieA. “Gospel of Wealth” – people should be free to

make as much money as they can…then give it back to society in positive ways.

B. Carnegie Steel Co. – Pittsburgh, PAC. Vertical Consolidation – control all businesses

that make up all phases of a product’s development

A. Carnegie gave away 350 million by his death 1919. Great Philanthropist!

John D. Rockefeller

IV. John D. Rockefeller A. Standard Oil Co. – Cleveland, OHB. Horizontal Consolidation – Bring competitors

into the same business. “buy them out” and combine operations.

C. Created a Trust – A board of trustees was formed to run all companies as one

D. Gave away over 500 million to charities & institutions by his death

V. Types of Big BusinessesA. Oligopoly – a few large profitable businesses

dominate an industryB. Monopoly – One company has complete control

of a product or serviceC. Cartel – competing businesses form an alliance

to control prices without officially merging

Question 3

• In your opinion, who used more ruthless tactics to control their respected industry Carnegie or Rockefeller? Explain.

New precedent of Govt. regulation

VI. Government ResponseA. Sherman Anti-Trust Act 1890 – outlawed any

combination of companies that restrained interstate trade or commerce.

B. Limits on industrial competition bad for consumer – prices rise

C. Sherman Anti-Trust Act ineffective1. To hard to define a trust2. Courts were pro-business

Question 4

• What role do you think the government should play in our economy?

• Should the government have the right to break up monopolies? Explain.

Captains of Industry Project• Get into groups of 4. You must do your best

to have 2 girls and 2 boys in each group.• Assign someone to be the “team leader”, and

send them up to see me to get the directions for the project.

Industrial Revolution changed ways of life

1. People moved from countryside to cities2. People took jobs in factories

3. This created problems in the citiesa. No sanitationb. Small, dirty houses (row house)c. Not enough schools for all the kids

4. Factory and mine conditions were bada. People worked 14 hour daysb. People worked 6 days a weekc. Wages were lowd. Children as young as 6 worked in factories and mines

Industrialization and Workers

• Cities crowded in mid-late 1800s (urbanization)

• 14 million people to US between 1860-1900• 8-9 million Americans moves off farms to

cities in late 1800s.• 1860 = 20% urban workers / 80% rural• 1900 = 40% urban / 60% rural• 1900 = 30% of labor force industrial

Conditions

• Harsh conditions, foremen demeaning and harsh

• Dangerous machines• Fast pace• 12 hours a day• 6 days a week

• Piecework = those who produced the most, the fastest got paid the most

• Sweatshops = long hours, low pay, poor conditions

• Division of labor = brake tasks down into steps• Took joy, pride, and quality out of work• Childhood labor common = 5% of industrial

labor in 1880s.• Uneducated kids, stunted growth, health

issues, vices, etc.

Coal Tub

Jacob Riis

• Very little change due to social Darwinism.• Public made aware by “muckraking”

journalists such as Jacob Riis• Children of the Poor• How the Other Half Lives

Jacob Riis