Transcript Chapter 13
The Rise of Industrialism Before this time U.S. mainly Agricultural Society. TJ saw U.S. as a land of Yeoman farmers Inventions needed investors to be able to fund these new ideas capitalism: an economic system in which factories, equipment, and other means of production are privately owned rather than controlled by government. Investing was a big risk, but paid off for many Example: Edison backed by J.P Morgan Patents protected inventors and investors Big Inventions Electric Lightbulb- Thomas Edison ( the Wizard of Menlo Park) The Telegraph – Samuel F.B. Morse The Telephone- Alexander Gram Bell The Automobile- Came from Europe The First powered airplane flight- The Wright Brothers near Kitty Hawk, NC Oil Drilling- Use instead of Whale Oil Bessemer Process- New stronger steel= bigger buildings central generating station for electricity- Thomas Edison Companies selling goods nation wide- need new ways to operate to meet demand How to do it? Specialized Machinery Many Unskilled Workers- and a few supervisors Reorganize the factory- one person does a single task Fredrick Taylor Motion Studies- more efficient- The Principles of Scientific Management Henry Ford Pioneered the moving assembly line As business grows the factors of production grow as well land, labor, and capital Capital is any asset that can be used to produce an income. Money, buildings, tools, and machinery are all forms of capital. A corporation is a company that is recognized by law as existing independently from its owners By buying stock, investors became owners of the company. Business owners began devising ways to reduce competition. One method was to buy or bankrupt competitors. Rockefeller- Standard Oil- Monopoly. Monopoly-company that completely dominates an industry trusts [trust: a set of companies managed by a small group known as trustees, who can prevent companies in the trust from competing with each other]. A trust is a set of companies that are managed by a small group known as trustees. Keep companies from competing Trusts and monopolies concentrated capital—and power—in the hands of a few people horizontal integration [horizontal integration: a corporate expansion strategy that involves joining together as many firms from the same industry as possible]. – Rockefeller- Standard Oil vertical integration [vertical integration: a corporate expansion strategy that involves controlling each step in the production and distribution of a product, from acquiring raw materials to manufacturing, packaging, and shipping].- Carnegie Steel The Government Leaves Business Alone laissez-faire [laissez-faire: the idea that the free market, through supply and demand, will regulate itself if government does not interfere]. “Allow to do” or “Leave business alone” social Darwinism [social Darwinism: an idea, based on Charles Darwin's theory of evolution, that the best-run businesses led by the most capable people will survive and prosper], The Government actually aided business by tariffs and low prices on land Allows the economy to prosper By 1900, the United States had the strongest industrial economy in the world. Government Takes Some Action to Limit Business Sherman Antitrust Act [Sherman Antitrust Act: an 1890 federal law that outlawed trusts, monopolies, and other forms of business that restricted trade] the Sherman Antitrust Act was full of vague language which made it hard to enforce Book by Mark Twain-The Gilded Age. = Something that is gilded looks like gold, but only on the outside. 3 Industries make U.S. economy soar 1. Steel-Carnegie 2. Oil- Rockefeller 3. Railroads-Vanderbilt Entrepreneurs-bold risk-takers who established new businesses. Along the way, they amassed huge fortunes. Carnegie’s Rags to riches story After arriving from Scotland in 1848 at the age of 12, he worked in a Pennsylvania cotton mill earning $1.20 a week. His thrift and shrewd investments gave him a $50,000 annual income by the time he was 30. "A man who dies rich dies disgraced." philanthropist [philanthropist: a person who gives money to support worthy causes] Carnegie and Rockefeller both gave millions to education, libraries, etc. Vanderbilt never believed he had a duty to use his wealth to benefit society. Nevertheless, he donated $1 million to found Vanderbilt University in Nashville, Tennessee. Robber Barons or Captains of Industry??