Transcript Big Business Notes

Big Business
A. How to divide the money
1. Capitalism – Private business runs most of
the industries and competition sets the
prices.
2. Socialism – The government plays a big part
in running industries and setting prices.
3. Communism – All people own businesses
together and all share in their profits. There
is no government at all.
B. Ideas that lead to Big Business
1. Free Markets
– US is a Capitalist system
– Government and business leaders believe in
laissez-faire capitalism.
– Laissez-Faire means “to let do” in French.
– Governments would not regulate business but let
it control itself.
2. Social Darwinism
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Capitalism created inequalities among citizens
Rich people and poor people
Some believed this was part of the natural order.
Adapted Darwin’s beliefs of survival of the fittest
to society
– Strong businesses, governments, and people
would survive while weak ones failed
C. Corporations
1. What is a Corporation
– A corporation is a business that has legal status
just like it was a person
– It is owned by stock holders, people who buy
parts of the business
– Decisions are made by a board of directors
2. Why have Corporations
– Can raise lots of money by selling stock
– Limited risk, investors can only lose as much as
they invest
D. Industrial Tycoons
1. Rockefeller and Oil
– John D. Rockefeller start
Standard Oil (a refinery)
– Wanted to grow his business
– Took over companies that
supplied him with things
– Took over other oil
companies
– By 1897 Standard Oil refined
90% of all US oil
2. Carnegie and Steel
– Andrew Carnegie started a
steel company
– Bought out companies that
supplied him to expand his
business
– He sold Carnegie Steel for
$480 million in 1901
– Gave away about $350
million mostly to promote
education
3. Views on the Tycoons
– Two Ways to view them
– Robber Barons: Got their wealth buy squeezing
out competition and stepping on the little guy
– Captains of Industry: made the American
Economy more productive and stronger