IndustrializationIndustrialization

Making of the Good LifeMaking of the Good Life

INDUSTRY Causes of INDUSTRY Causes of IndustrializationIndustrialization

Abundant Natural ResourcesAbundant Natural Resources– Lumber, Coal, OilLumber, Coal, Oil

LaborLabor– Immigrants from Europe & Asia Immigrants from Europe & Asia

Supportive Governmental PoliciesSupportive Governmental Policies Nation’s Cultural Climate Nation’s Cultural Climate

INDUSTRY: Effects of INDUSTRY: Effects of Industrialization Industrialization

Increased standard of living Increased standard of living Increase in citiesIncrease in cities Mass Consumerism and increase in Mass Consumerism and increase in

prod. prod. Extreme concentration of wealth Extreme concentration of wealth Better transportation Better transportation Coal up 800%Coal up 800% Farmers out # 3 to 1Farmers out # 3 to 1 Steel up 800%Steel up 800%

TECHNOLOGY: Impact of TECHNOLOGY: Impact of IndustrializationIndustrialization

Major Industries DevelopMajor Industries Develop

ELECTRIC LIGHT ELECTRIC LIGHT

RailroadRailroad

Telegraph Telegraph

Telephone Telephone

Cheap Consumer Goods Cheap Consumer Goods ProducedProduced

UNIONS: Problems of UNIONS: Problems of IndustrializationIndustrialization

Low wages and poor conditions for Low wages and poor conditions for workersworkers

Small group of wealthy business Small group of wealthy business ownersowners

Millions of poor workersMillions of poor workers No Government regulation No Government regulation Pollution of the EnvironmentPollution of the Environment 1885 Knights of Labor 1885 Knights of Labor American Federation of Labor American Federation of Labor

Consequences of Labor Consequences of Labor Uprising Uprising

1886: Haymarket Riot 1886: Haymarket Riot 1892: homestead1892: homestead 1894: Pullman Strike 1894: Pullman Strike

BIG BUSINESS BIG BUSINESS

The Mindset of Big BusinessThe Mindset of Big Business

““The Growth of A Large The Growth of A Large Business is Merely a Survival of Business is Merely a Survival of

the Fittest”the Fittest”-John D. Rockefeller, founder of -John D. Rockefeller, founder of

Standard OilStandard Oil

““Watch the costs, and the Watch the costs, and the profits will take care of profits will take care of

themselves”themselves”-Andrew Carnegie, founder of Carnegie Steel

BIG BUSINESSBIG BUSINESS

CARTELS CARTELS ASSOCIATIONSASSOCIATIONS TrustsTrusts MONOPOLIESMONOPOLIES INTERSTATE COMMERCE INTERSTATE COMMERCE

COMMISSIONCOMMISSION SHERMAN ANTI-TRUST ACTSHERMAN ANTI-TRUST ACT BY 1900: LARGE CORPS DOMINATEDBY 1900: LARGE CORPS DOMINATED

The Good LifeThe Good Life

Social DarwinismSocial Darwinism– Economic Competition is Natural Economic Competition is Natural

LawLaw– The Fittest in Business will The Fittest in Business will

SurviveSurvive– Business should not be regulatedBusiness should not be regulated– The weak companies go under, The weak companies go under,

while the Strong Survivewhile the Strong Survive

The Good LifeThe Good Life

Gospel of WealthGospel of Wealth–Economically Successful Economically Successful People have the People have the Responsibility to use their Responsibility to use their money for Charity and money for Charity and Social PurposesSocial Purposes

Caption reads: "Forty-Millionaire Carnegie in his Great Double Role. As the tight-fisted employer he reduces wages that he may play philanthropist and give away libraries, etc."This cartoon originally appeared in the July 9, 1892 edition of The Saturday Globe, a pro-union weekly out of Utica, New York.

The Good LifeThe Good Life

How to Succeed: Horatio AlgerHow to Succeed: Horatio Alger An Ambitious Person can Succeed An Ambitious Person can Succeed

Financially:Financially: if they Work Hard, if they Work Hard, are Thrifty, are Thrifty, Practice Integrity, Practice Integrity, Follow the Rules, Follow the Rules, and Have some Luckand Have some Luck

The Good LifeThe Good Life

Materialism:Materialism:– Idea that Material Objects such Idea that Material Objects such

as Goods and Wealth offer the as Goods and Wealth offer the Highest Values to be Pursued in Highest Values to be Pursued in LifeLife

–STOP STOP

What are some What are some problems with these problems with these

Theories?Theories?

Which do you believe?Which do you believe?

Were Carnegie and Were Carnegie and RockefellerRockefeller Captains of Captains of

IndustryIndustry or or Robber Robber BaronsBarons??

Andrew Carnegie: “Rags Andrew Carnegie: “Rags to Riches Success Story”to Riches Success Story”

Came to the US as a poor 12 year old Came to the US as a poor 12 year old Scottish immigrantScottish immigrantUsed vertical integration to control all Used vertical integration to control all aspects of manufacturing steel and earn aspects of manufacturing steel and earn more than $40 millionmore than $40 million

Rockefeller and Standard Oil Rockefeller and Standard Oil CompanyCompany

Emphasized Cost Cutting and EfficiencyEmphasized Cost Cutting and Efficiency– Undersold the competitionUndersold the competition

Stressed Importance of Customer LoyaltyStressed Importance of Customer Loyalty Used the Latest Refining TechnologiesUsed the Latest Refining Technologies Advertised Heavily Advertised Heavily Controlled Transportation: Tanker Cars Controlled Transportation: Tanker Cars

and New Pipelines and New Pipelines

Ousting the CompetitionOusting the Competition

Rockefeller tried to buy out local Rockefeller tried to buy out local refineriesrefineries

Set up Set up PoolsPools: : an agreement between an agreement between several companies that set several companies that set production quotas and fixed pricesproduction quotas and fixed prices

By 1879: Rockefeller controlled 90% By 1879: Rockefeller controlled 90% of the country’s oil-refining capacityof the country’s oil-refining capacity

Standard Oil TrustStandard Oil Trust TrustTrust: Business Organization which granted trust : Business Organization which granted trust

certificates in exchange for stock. certificates in exchange for stock. PurposePurpose: Board of Trustees set up to run several : Board of Trustees set up to run several

corporations as one giant business and establish corporations as one giant business and establish a monopolya monopoly

– Are monopolies good or badAre monopolies good or badfor the economy?for the economy?

Business IntegrationBusiness Integration

Vertical IntegrationVertical Integration: Control every part of : Control every part of production and retailingproduction and retailing– Ex: If Papa John’s both grew the food to Ex: If Papa John’s both grew the food to

make pizza and then sold the pizza to the make pizza and then sold the pizza to the publicpublic

Horizontal IntegrationHorizontal Integration: Merge all : Merge all competing companies into one giant competing companies into one giant system.system.– Ex. If Papa John’s bought out all other pizza Ex. If Papa John’s bought out all other pizza

places like Domino’s, Pizza Hut, etc. places like Domino’s, Pizza Hut, etc.

Government RegulationGovernment Regulation

Fear that Trusts would raise prices and Fear that Trusts would raise prices and run out small businessrun out small business

Sherman Anti-Trust Act 1890Sherman Anti-Trust Act 1890– Outlawed trusts and any other contracts Outlawed trusts and any other contracts

or combinations in restraint of tradeor combinations in restraint of trade Companies found new ways around Companies found new ways around

lawlaw Supreme Court lenient Supreme Court lenient

on enforcementon enforcement