Warm-Up 4/12/10• Over the break if you were

watching the news you might have heard about the mine in West Virginia.

• With a hazardous workplace, does this make the mine owner a Robber Baron?

Robber BaronsRobber Barons

►Business leaders who Business leaders who made their fortune by made their fortune by stealing from the public.stealing from the public.

►Drained natural resources, Drained natural resources, paid low wages to paid low wages to workers, required long workers, required long hours of employeeshours of employees

Robber BaronsRobber Barons

►Persuaded public officials Persuaded public officials to interpret laws in their to interpret laws in their favorfavor

►Ruthlessly drove their Ruthlessly drove their competitors to ruincompetitors to ruin

►Paid workers low wages in Paid workers low wages in dangerous and unhealthful dangerous and unhealthful conditionsconditions

Captain of IndustryCaptain of Industry

►Business leaders who Business leaders who served the nation in a served the nation in a positive waypositive way

►Increased supply of goods Increased supply of goods by building factoriesby building factories

►Raised productivity and Raised productivity and expanded marketsexpanded markets

Captain of IndustryCaptain of Industry

►Created jobs that enabled Created jobs that enabled many Americans to buy many Americans to buy new goods and raise their new goods and raise their standard of livingstandard of living

►Created museums, Created museums, libraries and universities libraries and universities (may of which still serve (may of which still serve the public today)the public today)

Robber Baron v. Captain Robber Baron v. Captain of Industryof Industry

►Robber Barron – negative Robber Barron – negative termterm

►Captain of Industry – Captain of Industry – positive termpositive term

Andrew CarnegieAndrew Carnegie

Andrew CarnegieAndrew Carnegie

►Captain of industry for steel Captain of industry for steel production in Pittsburghproduction in Pittsburgh

►Used Bessemer Process to Used Bessemer Process to produce stronger steelproduce stronger steel

►Utilized vertical integration Utilized vertical integration for business purposesfor business purposes

►ScottishScottish

PhilanthropistPhilanthropist

►Uses wealth to improve Uses wealth to improve societysociety

►Carnegie funded the Carnegie funded the building of libraries, building of libraries, education facilities, and education facilities, and music/arts facilitiesmusic/arts facilities

Gospel of WealthGospel of Wealth

►Philosophy that states a Philosophy that states a person should be able to person should be able to make as much money as make as much money as they can, they can, BUTBUT they they should also use their should also use their wealth to improve wealth to improve society.society.

Social DarwinismSocial Darwinism►Based on Darwin’s Theory Based on Darwin’s Theory of Evolution (1859) of Evolution (1859) regarding natural selection regarding natural selection and survival of the fittestand survival of the fittest

►States that society should States that society should allow people to do the same allow people to do the same with business – the with business – the government should stay government should stay out!out!

MonopolyMonopoly

►One company with One company with complete control of a complete control of a product or a serviceproduct or a service

TrustTrust►A group of separate A group of separate companies that are companies that are placed under the control placed under the control of a single managing of a single managing board (Board of board (Board of Directors)Directors)

►Trusts limit competition Trusts limit competition and cause prices to riseand cause prices to rise

CartelCartel

►A loose association of A loose association of businesses in a similar businesses in a similar field or that make the field or that make the same product and agree same product and agree to limit supply to drive to limit supply to drive up pricesup prices

Sherman Anti-Trust ActSherman Anti-Trust Act

►Enacted in 1890Enacted in 1890

►Effort by Congress to Effort by Congress to end trustsend trusts

►Ineffective due to lack of Ineffective due to lack of enforcementenforcement

John D. RockefellerJohn D. Rockefeller

John D. RockefellerJohn D. Rockefeller

►Wealthy individual who Wealthy individual who saw the oil industry as a saw the oil industry as a way to get richerway to get richer

►Formed Standard Oil Formed Standard Oil CompanyCompany

John D. RockefellerJohn D. Rockefeller►Made illegal deals with Made illegal deals with railroads to transport oil railroads to transport oil cheaper, thus weakening cheaper, thus weakening other refineries that he other refineries that he would eventually buywould eventually buy

►Utilized horizontal Utilized horizontal integration for business integration for business purposespurposes

Horizontal Horizontal Integration/ConsolidationIntegration/Consolidation

►Many firms that are part Many firms that are part of the same businessof the same business

►Standard Oil Standard Oil Company/John D. Company/John D. RockefellerRockefeller

Controlling the MarketControlling the Market

Bob’s Pizza

Delaware

Pizza

Pizza PizzaHappy Time PizzaUsing 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

Vertical Vertical Integration/ConsolidationIntegration/Consolidation

►Many businesses related Many businesses related to various phases of to various phases of production for one productproduction for one product

►Carnegie Steel/Andrew Carnegie Steel/Andrew CarnegieCarnegie

Controlling the MarketControlling 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

Frederick Winslow Frederick Winslow TaylorTaylor

►Organized and Organized and systemized factoriessystemized factories

►Goal: get workers Goal: get workers

to produce more in to produce more in

less timeless time

Division of LaborDivision of Labor►When on completes When on completes one one tasktask as part of the as part of the productionproduction

Artisinal SystemDivision of

Labor

Division of LaborDivision of Labor

►Positive: increases Positive: increases productivity for businessesproductivity for businesses

►Negative: workers no Negative: workers no longer take pride in work longer take pride in work and removes creativityand removes creativity

•ImmigrantsImmigrants

•Former Farm Former Farm FamiliesFamilies

•Women and ChildrenWomen and Children

•Does notDoes not include include African AmericansAfrican Americans

Growing Work ForceGrowing Work Force

Poor/Needy FamiliesPoor/Needy Families►Children as young as 6 Children as young as 6 sent to worksent to work

►Children Children

forced to forced to

leave leave

schoolschool

Poor/Needy FamiliesPoor/Needy Families

►Private charity might aid Private charity might aid familiesfamilies

►Government Welfare Government Welfare does not exist at this does not exist at this time!time!

Workday in the 1860sWorkday in the 1860s►Typically 12 hour daysTypically 12 hour days

►6 day weeks6 day weeks

►After 1868,After 1868,GovernmentGovernmentEmployees Employees sparedspared

Closer 4/12/10

• With all the facts about business that we learned today, do you think this is a positive step for American society? Why or why not? Make sure to provide evidence

to back up your claim.