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19 2 big business 19 2 big business Presentation Transcript

  • CHAPTER 19:The Industrial Age Section 2: Big Business
  • 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
  • Capitalism and the Free Market
  • HOW BUSINESSES GREW – Formed corporationsbusiness that sells portions ofownership called stock shares
  • How Corporations Work
  • HOW BUSINESSES GREW Stockholders:• Get a % of the profit• Elect board of directors to runcompany
  • HOW BUSINESSES GREW Using horizontal integration –Acquiring ownership of otherbusinesses in the same field
  • Horizontal Integration
  • HOW BUSINESSES GREW Using vertical integration –Acquiring ownership ofbusinesses involved in each stepof a manufacturing process
  • Vertical Integration
  • HOW BUSINESSES GREW Making a trust – Legalarrangement grouping together anumber of companies under asingle board of directors
  • A Trust
  • A Trust
  • HOW BUSINESSES GREW to run• Set prices very lowcompetitors out of business, thenraised prices very high
  • HOW BUSINESSES GREW monopoly – Goal was to form aTotal ownership of a product orservice
  • HOW BUSINESSES GREW• No competition left• Raise prices to whatever theywanted• Quality of products decreased
  • TWO LEADERS IN BUSINESS Some men used integration andtrusts to become extraordinarilywealthy
  • TWO LEADERS IN BUSINESS Andrew Carnegie – Controlledmost of the steel production in theU.S.
  • TWO LEADERS IN BUSINESS John D. Rockefeller –Controlled most of the oilproduction in the U.S.
  • 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
  • Social Darwinism and“Survival of the Fittest”
  • Social Darwinism and“Survival of the Fittest”