19 2 big business

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19 2 big business

  1. 1. CHAPTER 19:The Industrial Age Section 2: Big Business
  2. 2. THE U.S. ECONOMY Based on capitalism –Economic system in which privatebusinesses run industries • Provides for free markets and competition • Keeps prices low and quality high
  3. 3. Capitalism and the Free Market
  4. 4. HOW BUSINESSES GREW – Formed corporationsbusiness that sells portions ofownership called stock shares
  5. 5. How Corporations Work
  6. 6. HOW BUSINESSES GREW Stockholders:• Get a % of the profit• Elect board of directors to runcompany
  7. 7. HOW BUSINESSES GREW Using horizontal integration –Acquiring ownership of otherbusinesses in the same field
  8. 8. Horizontal Integration
  9. 9. HOW BUSINESSES GREW Using vertical integration –Acquiring ownership ofbusinesses involved in each stepof a manufacturing process
  10. 10. Vertical Integration
  11. 11. HOW BUSINESSES GREW Making a trust – Legalarrangement grouping together anumber of companies under asingle board of directors
  12. 12. A Trust
  13. 13. A Trust
  14. 14. HOW BUSINESSES GREW to run• Set prices very lowcompetitors out of business, thenraised prices very high
  15. 15. HOW BUSINESSES GREW monopoly – Goal was to form aTotal ownership of a product orservice
  16. 16. HOW BUSINESSES GREW• No competition left• Raise prices to whatever theywanted• Quality of products decreased
  17. 17. TWO LEADERS IN BUSINESS Some men used integration andtrusts to become extraordinarilywealthy
  18. 18. TWO LEADERS IN BUSINESS Andrew Carnegie – Controlledmost of the steel production in theU.S.
  19. 19. TWO LEADERS IN BUSINESS John D. Rockefeller –Controlled most of the oilproduction in the U.S.
  20. 20. WHY DID THESE MEN BECOME SO RICH? Some said they were cheatingthe system Others justified their actionsthrough a theory called SocialDarwinism • “Survival of the fittest” determined which human beings would succeed in business and in life in general
  21. 21. Social Darwinism and“Survival of the Fittest”
  22. 22. Social Darwinism and“Survival of the Fittest”

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