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New Industrial Age

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New Industrial Age New Industrial Age Presentation Transcript

  • Growth of Big Business Brought to you by Local Sweatshop Laborers Mr. Hyer Room 108
  • Take Careful Notes Today I’m Giving You the Secret Formula of How to become a GazillionMillionBillionaire
    • Identify management and business strategies that contributed to the success of business tycoons such as Andrew Carnegie.
    • Explain Social Darwinism and its effects on society.
    Learning Objectives
  • Causes of Rapid Industrialization
    • Steam Revolution of the 1830s-1850s
    • The Railroad fueled the growing US economy:
      • * First big business in the US.
      • * A magnet for financial investment.
      • * The key to opening the West.
      • * Aided the development of other industries.
  • Causes of Rapid Industrialization
    • Technological innovations. * Bessemer Process (Steel)
      • * Refrigerated cars * Edison  “Wizard of Menlo Park”  light bulb, power plants
      • * Extension of Work day
  • Causes of Rapid Industrialization
    • Unskilled & semi-skilled labor in abundance.
    • Abundant capital.
    • New, talented group of businessmen [ entrepreneurs ] and advisors.
    • Market growing as US population increased.
    • Government willing to help at all levels to stimulate economic growth.
    • Abundant natural resources.
  • U. S. Patents Granted 1790s  276 patents issued. 1990s  1,119,220 patents issued.
  • Late 19 th Century Business Ideology
    • Laissez Faire
    • Social Darwinism
    • Laissez Faire
    • Power to the Individual
    • Market Not Man-made or invented
    • Individuals Compete Freely in Marketplace
    • No room from government interference
  • Social Darwinism A Dubious Business “Theory” based on the Work of Naturalist Charles Darwin. The Origin of Species (1859)
  • Darwin’s “The Origin of Species.” This is a first edition.
    • Based on the research of Charles Darwin
    • Earth is billions of years old
    • All life forms, including humans, developed gradually over several million
    • Natural selection
    • Mutated genes create changes over time
    • Meaning the organisms best adapted to their environment survive above others
    EVOLUTION
  • “ Survival of the Fittest” ???
    • Society, like the jungle, fostered a ruthless struggle for survival
    • The fit survive and spread
    • The weak perish
    • Instead of tooth and claw, the struggle is economic
    • Government interference to reward society and the economy is futile
    • This “natural selection” necessary for the advancement of human race
    • Carnegie adds to this grim concept: “ Gospel of Wealth :” the economic winners have a responsibility to those below. (What a guy!)
    Individuals must have absolute freedom to struggle, succeed or fail Hello, Little People
  • Carnegie I’m so full of Contradictions The “theory” he loved so dearly lacked consistency He argued against Government Regulation He welcomed Government Assistance (tax abatements, grants, tariffs, etc.
  • Economies of Scale With faster machines, businessmen discover:
    • Cost per unit decrease as number of units produced increase
    • More raw product purchased, the cheaper suppliers’ asking price
    • The closer capacity they kept new, faster machines running, the less the cost of labor and electricity
    • The lower their costs, the cheaper they could sell their products
    • The cheaper the product, the more they sold
    Huge Profits
  • Horizontal Integration John D. Rockefeller (Standard Oil Company)
  • Vertical Integration Andrew Carnegie (U.S. Steel) Gustavus Swift  Meat-packing
  • Vertical Integration Holding Company
    • Own controlling interest in:
    • Production of raw material
    • Transportation to factory
    • The factory itself
    • Distribution network of product
    Monopoly of Entire Industry
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  • Horizontal Integration Purchase or Put out of Business Competing Firms Trusts Ex: Oil, Whiskey, Sugar, Lead, Railroads
  • U. S. Corporate Mergers
  • World’s Industrial Output
  • Who’s Winning? Who’s Losing?
  • The “Robber Barons” of the Past
  • “ The Bosses of the Senate”
  • “ The Protectors of Our Industries”
  • Time for Government Intervention? Gov’t: Expansion of Mergers and Trusts Stifling Free Market Sherman Anti-Trust Act (1890)
    • This federal law forbid any “combination…or conspiracy in the restraint of trade” between states or with other countries.
    • Difficult to enforce (“Trust” not clearly defined.)
    • Supreme Court overturned 7 of 8 cases against Trusts
    • Companies reorganized to avoid “Trust” designation
    • Better laws to come (Watch out for Teddy and Taft)
  • Coming Attraction Workers of the World Unite
  • Labor Unions Emerge
    • Summarize the emergence and growth of unions.
    • Explain the violent reactions of industry and government to union strikes.
    Learning Objectives
  • The Changing American Labor Force
  • Why Labor Unions?
    • Seven Day Workweeks
    • 12 -14- hour workdays
    • Low Wages
    • No Vacation Time
    • No Sick Leave
    • No Disability Insurance
    • No Healthcare
    • No Unemployment Compensation
    • Dangerous Working Conditions
  • The Tournament of Today: A Set-to Between Labor and Monopoly
  • What Are Labor Unions?
    • Trade Union = Group of SKILLED workers within single trade
    • American Federation of Labor (Led by Samuel Gompers ) – Confederation of trade unions (Skilled workers)
    • Unskilled Workers Unions would form a few years later – one of these is led by Eugene V. Debs (Socialist)
    • Early Labor Unions excluded immigrants and blacks
  • Labor Unions = Dangerous Ideas
    • Unions Considered Radical Organizations
    • Utopian or Socialistic Leanings
    • Government Wary of Supporting Them
    • Businesses and Courts Hostile to Them
    Socialism – An economic system in which the government owns most of the major means of production and distribution. (Coal, steel, transportation) Other industries privately owned. Reduces inequality among citizens.
  • “Bread and Butter” Issues
    • Higher Wages and Shorter Workdays
    • Avoid Larger Political Issues
    • Easier to Achieve Reform with Business Owners than through Gov’t Sponsored Reform Laws
    Samuel Gompers
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  • Haymarket Square Riot – Public Begins to Turn Against Unions (1886)
    • Only organized a small fraction of workers (Not enough members to push business owners to change)
    • Business owners had too much money and power to bend to union demands
    • Government tended to support corporations and not the unions
    • It won’t be until the 1930s when the Union’s gain real power
    Unions’ Weaknesses
  • Mary Harris Jones “ Mother” Jones
    • Helped Push for Child Labor Reform
    • Organized Women Workers
  • Triangle Shirtwaist Factory Fire! Shirtwaist Tragedy Leads to Better Workplace Conditions
    • 3 or 4 doors locked to prevent theft
    • Faulty Fire Escape
    • No Sprinklers – too expensive
    • Owners avoid jail – pay $75 per death (146 x $75 = $10,975)
  • Asch Building 8th, 9th & 10 th Floors
  • Thank Goodness, the Firemen have arrived!! OOPS!
    • Ladders only reach to six floor – fire is on 8,9 & 10
    • Pumps can raise water to 9 & 10
    • Don’t worry – building is “fire proof”
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