Presentation5

Industrialization
Chapter 5 1865-1901

Industrial
Revolution
• The Industrial
Revolution was the
major shift of
technological,
socioeconomic and
cultural conditions in the
late 18th and early 19th
century that began in
Britain and spread
throughout the world.
A Watt steam engine in Madrid. The
development of the steam engine
propelled the Industrial Revolution in
Britain. The steam engine was created to
pump water from coal mines, enabling
them to be deepened beyond
groundwater levels.

Effects
The effects spread throughout
Western Europe and North
America during the 19th
century, eventually affecting
most of the world.
► During that time, an
economy based on
manual labor was
replaced by one
dominated by industry
and the manufacture of
machinery.
The first major
technological
innovation was the
cotton gin.
The first innovation in cotton manufacture was the fly-
shuttle, which greatly speeded up the process of weaving
cotton threads into cloth.

Cottongin
• His cotton gin
removed the
seeds out of
raw cotton.

• While the spinning jenny is frequently
pointed to as the first, major technological
innovation of the industrial revolution, the
invention that really drove the revolution in
the eighteenth century was invented several
decades earlier: the steam engine. Along
with the growth in the cotton industry, the
steel industry began to grow by leaps and
bounds. This was largely due to a quirk in
English geography: England sits on vast
quantities of coal, a carbon based mineral
derived from ancient life forms.

• Coal burns better and more efficiently than
wood and, if you have lots of coal, its
infinitely cheaper. The English figured out
that they could substitute coal for wood in
the melting of metals, including iron, and
blissfully went about tearing coal from the
ground while manufacturers in Europe
looked on jealously.

• Mining coal, however, was not an easy
task. As you drew more and more coal out
of the ground, you had to mine deeper and
deeper. The deeper the mine, the more it
fills with water. In 1712, Thomas
Newcomen built a simple steam engine that
pumped water from the mines. It was a
single piston engine, and so it used vast
amounts of energy.

• Until a Scotsman named James Watt added a separate
cooling chamber to the machine in 1763; this cooling
chamber condensed the steam so the cylinder itself didn't
have to be cooled. Patented in 1769, Watt's steam engine
had the efficiency to be applied to all kinds of industries.
He was not, however, good at doing business and it was
only when he had teamed up with the businessman,
Matthew Boulton, that the steam engine began to change
the face of English manufacture. By 1800, Watt and
Boulton sold 289 of these new engines; by the middle of
the next century, the steam engine replaced water as the
major source of motive power in England and Europe.

How it Began?
• The Continental movement and the British Agricultural
Revolution made food production more efficient and
less labor-intensive, encouraging the surplus population
who could no longer find employment in agriculture
into cottage industry, for example weaving, and in the
longer term into the cities and the newly-developed
factories. The colonial expansion of the 17th century
with the accompanying development of international
trade, creation of financial markets and accumulation of
capital are also cited as factors.

TheSteelAgeBegins:
TheBessemer
Converter
Working independently, William Kelly, of the United States, and
Henry Bessemer, of England, both discovered the same method for
converting iron to steel. They learned that a blast of air through
molten pig iron burned out most of the impurities. The carbon
contained in the molten iron acted as its own fuel.
Kelly built his first converter in 1851. He received an American
patent in 1857. The inventor went bankrupt the same year, however,
and the method was to become known as the Bessemer process.
Bessemer announced his vertical converter in 1856. In 1860, he
patented a tilting converter. It could be tilted to receive molten iron
from the furnace and again to pour out its load of liquid steel.
The Bessemer process was able to make many tons of steel from iron
in a relatively short time, but the metal was still brittle. This problem
was caused by the sulfur and phosphorus impurities that remained and
by the oxygen from the air blast. In 1856, Robert F. Mushet, an
English metallurgist, discovered that adding spiegeleisen, an iron alloy
containing manganese, would remove the phosphorus and most of the
sulfur by adding limestone to the converter.Sir Henry
Bessemer
Spiegeleisen
Also, molten iron ran down ditches that had been previously formed in the floor
of the furnace room (molding room) and into slots molded from pieces of wood.
Early iron workers thought this arrangements looked like baby piglets sucking
from the mother sow, so these bars were called 'Pig Iron' and the name stuck.

• The presence of a large domestic market
should also be considered an important
driver of the Industrial Revolution,
particularly explaining why it occurred in
Britain. In other nations, such as France,
markets were split up by local regions,
which often imposed tolls and tariffs on
goods traded amongst them.

What Were the Social Effects
of the Industrial Revolution?
• In terms of social structure,
the Industrial Revolution
witnessed the triumph of a
middle class.
• Ordinary working people
found increased
opportunities for
employment
• Industrial workers were
better paid than those in
agriculture.
• With more money,
women ate better, had
healthier babies, who
were themselves better
fed.

IndustrialRevolution
The IR is when
people stopped
making goods at
home and started
making goods in
factories.

SteamEngine
• The steam
engine was not
just a
transportation
device. It ran
entire factories
the way rivers
used to.

Canals
• Canals are manmade waterways
dug between 2 large bodies of
water.
• The Erie Canal was a short cut
from the Atlantic Ocean to the
Great Lakes.

PanamaCanal
• The Panama Canal was a
shortcut from the Atlantic to the
Pacific (or backwards).

Telegraph
• Samuel Morse invented the
telegraph. It communicated
using a series of beeps (Morse
code).

telephone
• Alexander Graham Bell
invented the telephone.

FrayerModel
Industrial Revolution
Reason for it to occur Leaders and Inventors
Inventions Results

Quiz
1. What invention gave rise to factories
being able to locate anywhere?
2. Name an inventor or leader and their
invention of the Industrial Revolution.
3. Name a cause that led to the Industrial
Revolution.
4. What was a result of the Industrial
Revolution?
5. Even though used for hundreds of
years, what were being constructed to
improve transportation?

Capitalism,
Entrepreneurship,
and Culture

“Allowtobe” Laissez-faire (French, "leave alone"), in economics, is the
doctrine that the best economic policy is to let businesses make
their own decisions without government interference. This
doctrine of noninterference was first enunciated by the French
physiocrats of the 18th century as a reaction against the
restrictionist policies of mercantilism. Linked with the concept
of free trade, it became the basis of Adam Smith’s classical
economics, Wealth of Nations. Later, Jeremy Bentham and
John Stuart Mill applied the economic notions of laissez-faire
capitalism to utilitarian, individualistic political theory, and the
Manchester school economists John Bright and Richard
Cobden used them for practical political purposes.
Laissez-faire principles were strongest in the mid-19th century,
but the increasing practice of monopoly and the social costs of
the Industrial Revolution brought about greater government
regulation through Progressivism. Modern proponents of
laissez-faire stress the importance to economic growth of the
profit incentive and the undeterred entrepreneur. The phrase
has been largely supplanted by such terms as market economy
or free enterprise.

Capitalism: Our Economy
Capitalism is an economic system in which the means of production are privately owned.
Business organizations produce goods for a market guided by the forces of supply and
demand. Capitalism requires a financial system that enables business firms to borrow
large sums of money, or capital, to maintain and expand production. Underlying
capitalism is the presumption that private enterprise is the most efficient way to organize
economic activity. Adam Smith expressed this idea in his Wealth of Nations (1776),
extolling the free market in which the businessman is "led by an invisible hand to promote
an end which was no part of his intention."
The marketplace is the center of the capitalist system. It determines what will be
produced, who will produce it, and how the rewards of the economic process will be
distributed. From a political standpoint, the market system has two distinct advantages
over other ways of organizing the economy: (a) no person or combination of persons can
control the marketplace, which means that power is diffuse and cannot be monopolized by
a party or a clique; (b) the market system tends to reward efficiency with profits and to
punish inefficiency with losses. Economists often speak of capitalism as a free-market
system ruled by competition. But capitalism in this ideal sense cannot be found anywhere
in the world. The economic systems operating in Western countries today are mixtures of
free competition and governmental controlled regulation, thus negating the spirit of the
economy.

Verticalvs.Horizontal
Integration
In microeconomics and strategic management, the term
horizontal integration describes a type of ownership
and control. It is a strategy used by a business or
corporation that seeks to sell a type of product in
numerous markets. Horizontal integration in marketing
is much more common than vertical integration is in
production. Horizontal integration occurs when a firm
is being taken over by, or merged with, another firm
which is in the same industry and in the same stage of
production as the merged firm. The term vertical
integration describes a style of management control.
Vertically integrated companies in a supply chain are
united through a common owner. Usually each member
of the supply chain produces a different product or
(market-specific) service, and the products combine to
satisfy a common need.

Philanthropist
Entrepreneurs
• Andrew Carnegie owned US
Steel.

AndrewCarnegie born Nov. 25, 1835, Dunfermline, Fife, Scot. died Aug. 11, 1919, Lenox,
Mass., U.S. Scottish-born American industrialist who led the enormous
expansion of the American steel industry in the late 19th century. He was
also one of the most important philanthropists of his era.
During his trips to Britain he came to meet steelmakers. Foreseeing the
future demand for iron and steel, Carnegie left the Pennsylvania Railroad
in 1865 and started managing the Keystone Bridge Company. From about
1872–73, at about age 38, he began concentrating on steel, founding the J.
Edgar Thomson Steel Works near Pittsburgh, which would eventually
evolve into the Carnegie Steel Company.
In 1889 Carnegie's vast holdings were consolidated into the Carnegie Steel
Company, a limited partnership that henceforth dominated the American
steel industry. In 1890 the American steel industry's output surpassed that
of Great Britain's for the first time, largely owing to Carnegie's successes.
In 1900 the profits of Carnegie Steel (which became a corporation) were
$40,000,000, of which Carnegie's share was $25,000,000. Carnegie sold
his company to J.P. Morgan's newly formed United States Steel
Corporation for $250,000,000 in 1901. He subsequently retired and
devoted himself to his philanthropic activities, which were themselves
vast.
Carnegie's own distributions of wealth came to total about $350,000,000,
of which $62,000,000 went for benefactions in the British Empire and
$288,000,000 for benefactions in the United States.

Philanthropist
Entrepreneurs
• John D. Rockefeller owned the
the oil industries

John D. Rockefeller
American industrialist and philanthropist John Davison Rockefeller, b.
Richford, N.Y., July 8, 1839, d. May 23, 1937, began his career in Cleveland,
Ohio, before the Civil War. In 1863 he and his partners formed an oil
business that eventually absorbed many Cleveland refineries and expanded
into Pennsylvania oil fields to become the world's largest refining concern.
Rockefeller founded (1870) the Standard Oil Company of Ohio; the
Standard Oil Trust, which he formed in order to avoid state controls, was
dissolved (1892) by the Ohio Supreme Court. The division of his operations
into 18 companies--later to include more than 30 corporations--under the
umbrella of Standard Oil of New Jersey (1899) helped him to accumulate a
personal fortune of over $1 billion. In 1911 this venture, however, was
interpreted by the U.S. Supreme Court as "a monopoly in restraint of trade"
and thus illegal according to the Sherman Anti-Trust Act; Standard Oil was
broken up into 39 separate companies. Rockefeller retired the same year but
expanded his efforts in philanthropy, which claimed about one-half of his
vast fortune. He created such institutions as the Rockefeller Foundation, the
General Education Board, and the Rockefeller Institute for Medical
Research; founded the University of Chicago; and presented many gifts to
colleges and churches.

John D. Rockefeller & Standard Oil
Wood River Refinery, Illinois, 1908

Monopoly
• Carnegie and Rockefeller ran
their competition out of
business.
• A monopoly is when one
company controls the entire
industry.

ProgressiveViewof
StatndardOil

ThomasEdison
• The light bulb allowed factories
to work at night.
Night was now banished

Edison’sinventions
• Motion picture camera
Led to movie theaters

Additional
entrepreneurs
• Cornelius Vanderbilt- American shipping and railroad
magnate who acquired a personal fortune of more than
$100,000,000.
• George Westinghouse- American inventor and
industrialist who was chiefly responsible for the adoption
of alternating current for electric power transmission in
the United States.
• George M. Pullman- American industrialist and
inventor of the Pullman sleeping car for use on railroads.
• Milton S. Hershey- American manufacturer and
philanthropist who founded the Hershey Chocolate
Corporation and was instrumental in popularizing
chocolate candy throughout much of the world.
• Éleuthère Irénée du Pont- The Dupont company was in
Delaware in 1802 to produce black powder and later
other explosives, which remained the company's main
products until the 20th century, when it began to make
many other chemicals as well- nylon, rayon, polyester.
• Gustavus F. Swift- founder of the meat-packing firm
Swift & Company and promoter of the railway
refrigerator car for shipping meat.
• Philip D. Armour - American entrepreneur and innovator
whose extensive Armour & Company enterprises helped
make Chicago the meatpacking capital of the world.

POLITICAL CARTOON ILLUSTRATING PEOPLE INVOLVED IN THE SCANDAL BEING
SENTENCED TO HARA-KIRI (A FORM OF RITUAL JAPANESE SUICIDE, IN THIS CASE THE
COMPANY GOING BANKRUPT AND CONGRESSMEN INVOLVED GETTING KICKED OUT) BY
UNCLE SAM WHO REPRESENTS THE AMERICAN PEOPLE.
The federal government in 1864 had chartered a “Union Pacific Railroad,”
with $100,000,000 capital, to complete a transcontinental line west from
the Missouri River. It offered to assist it by a loan of $16,000 to $48,000 a
mile according to location, over $60,000,000 in all, and a land grant of
20,000,000 acres, worth $50,000,000 to $100,000,000. Even this offer
attracted no subscribers: it meant building 1,750 miles of road through
desert and mountain, at enormous freight costs for supplies, with frequent
bloody encounters with Indians, and no probable early business to pay
dividends.
In 1867, Dr. Thomas C. Durant was replaced as head of Crédit Mobilier by
Congressman Oakes Ames.[3] In that year Ames offered to members of
Congress shares of stock in Crédit Mobilier at its discounted value rather
than market value, which was much higher. The Congressmen and others
who were allowed to purchase shares at a discount could reap enormous
capital gains simply by, in turn, offering their discounted shares to a
grossly under-subscribed market, that was very eager to own shares of
such a “profitable” company. These same members of Congress voted to
appropriate government funds to cover the inflated charges of Crédit
Mobilier. Ames' actions became one of the best-known examples of graft
in American history.
CréditMoblier

Capitalismand
entrepreneurship
SemanticMap
Industrial
Revolution
Culture
Results
Capitalism
Inventions
Capitalist
Entrepreneurs

Capitalismand
EntrepreneurshipQuiz
1. Give two examples of Industrial
Revolution culture.
2. Give an example of an Industrial
Revolution invention.
3. Name a principle or leader of
capitalism.
4. Name an entrepreneur-
philanthropist.
5. Give a result of this phase of the
Industrial Revolution.

Pullfactors
• Immigrants come to the USA
for jobs and opportunities.

• Pull factors are good ideas to
bring legal immigrants here like
jobs.

• Jobs pulled immigrants here.

• Free land was a pull factor

Pushfactors • Push factors are bad reasons that
push immigrants away like war,
famine, or disease. This is
blighted potato that represents
the reason for the Irish potato
famine.

• Many immigrants lived in
tenements.

Child labor
• Children were expected to
work. Employers also liked
that they could pay a child
less than an adult.
• The first law against child
labor, the Factory Act of
1833.
• Children younger than nine
were not allowed to work
• Children were not permitted to
work at night
• The work day of youth under
the age of 18 was limited to
twelve hours

Housing
• Poor people lived in small houses in cramped streets.
These homes would share toilet facilities, have open
sewers and would be at risk of damp. Conditions did
improve during the 19th century as public health acts
were introduced covering things such as sewage,
hygiene and making some boundaries upon the
construction of homes. Not everybody lived in homes
like these. The Industrial Revolution created a larger
middle class of professionals such as lawyers and
doctors. The conditions for the poor improved over
the course of the 19th century because of government
and local plans which led to cities becoming cleaner
places, but life had not been easy for the poor before
industrialization.

Popular culture
• the culture of the people
• It results from the daily interactions, needs and desires and
cultural 'moments' that make up the everyday lives of the
mainstream.
• It can include any number of practices, including those
pertaining to cooking, clothing, mass media and the many
facets of entertainment such as sports and literature.
• People like to feel a part of a group and to understand their
cultural identity within that group, which tends to happen
naturally in a small, somewhat isolated community.

Labor Reform
At the same time a philosophical movement called the
Enlightenment propagated many new ideas concerning the rights of
mankind in relation to the state. (The American Declaration of
Independence is one of the best statements of Enlightenment
principles in this regard.) The American and French revolutions,
with their declarations of rights, did much to spread the notion that
individuals have certain rights that governments must honor.
In this new, more democratic political setting, it became
increasingly obvious to many people that the combinations of
government and those with great wealth would not look out for the
interests of workers unless pressured to do so. Hence, there
emerged the first attempts to organize workers into labor and trade
unions to exert just such pressure on politicians and employers.
For a century or more, these attempts at unionization were regarded
by governments as criminal, communist conspiracies. Gradually,
aided by the efforts of socialist politicians and the self-interest of
employers, unions began to gain recognition. Their demands for
better working conditions, shorter hours, and social welfare began
to be met.
Jean Jaurès addressing workers
under a red flag. Countries with
red as the background for their
flags later became communist
countries.

LaborReform
• Labor unions struggled in the
1800s for better working
conditions (shorter work day,
workers’ comp).

U. S. Labor Movement
Unions are distinctly national institutions that vary in structure and character
from one country to another. Even within a country each has its own peculiar
history and its own unique way of conducting its affairs. A noteworthy difference
between U.S. trade unions and their British counterparts is that U.S. unions have
never achieved a political identity or even clearly associated their individual
interests as "working class." Whether this is attributable to the absence of a
traditional guild legacy in the United States, the greater degree of labor mobility
compared to Britain, the negative impact of early antitrust legislation (which
extended to unions), or the dominance, as late as 1930, of agricultural
employment, the fact is that in 1956, the peak year of U.S. union membership,
slightly less than 25% of all eligible workers were union members.
These data reflect, on the one hand, an ambivalence on the part of workers
about aligning themselves with unions and, on the other, the unions' less-than-
sympathetic public image. The numbers, however, belie the lobbying
effectiveness that unions have had, at least until the recent past, on social
legislation. Legislative gains in such key areas as minimum wages, safety
regulations, and unemployment compensation are in no small measure
attributable to the success of labor's powerful lobbying efforts in Washington.
Walther P. Reuther (CIO) &
George Meany (AFL) Dec1955

Childlabor
• Many immigrants put their
children to work ASAP.

Childlabor
• Bowling pin boys

Childlabor
• Coal miner boys

• Girls were preferred over boys.
They were paid less, had
smaller hands.

Laborreform
• Unions allied themselves with
communists, socialists, and
anarchists. They went on
strike, and they turned violent
most of the time.

Laborunions
• Skilled labor unions were more
successful because they were
harder to replace.

• Taylorism – increasing
efficiency through studies of
human motion.

Industrialefficiency
• Henry Ford learned that the less
people had to move, the faster
they would work.

• The first cars were very
expensive.

ModelT
• The Model T was the first car
that middle class people could
afford.

ModelT
• The assembly line lowered the
cost of the Model T from $825
to $300.

TheBeginningof
Capitalism
The word economics comes from a Greek word that means “household
management”—performance of the tasks and services that allow a
family to survive and prosper. Thus economic functions are activities
devoted to satisfying the primary needs of food, clothing, and shelter—
needs that are common to all human beings. Economic functions also
satisfy desires for goods and services that are not genuine needs but that
people in a prosperous country want. Such goods and services are often
called luxuries, but today some luxuries are considered necessities by
many people: such things as automobiles, television sets, cell phones,
and visits to the dentist.
One of the ways goods and services are provided is through an
economic system called capitalism. Other names for this system are free
market economy and free enterprise. All three terms were coined in the
late 19th and the early 20th century to describe economic arrangements
that began developing in Europe several centuries ago.
The word capital refers to what are called factors of production. These
include the money, land, buildings, and machinery that it takes to
operate a factory or farm. The capitalist is the individual—or group of
individuals—who supplies the money to get the enterprise going.
The other two terms, free market economy and free enterprise, put a
slightly different slant on capitalism. They have in common the word
free.

The Beginning of Capitalism (cont’d)
The implication is that people have individual liberty and the
right to own property. They also have the right to do what
they wish with their property, as long as it does not harm
anyone else. These freedoms set capitalism apart from all
other kinds of economic arrangements: all others are top-
down, command-and-control political systems in which
personal freedom and the rights of property are sacrificed for
the good of the state.
In the context of capitalism, the term private property has a
specific definition. It signifies the means of production. A
farm as property is the means by which food is produced; and
a factory as property is the means by which durable goods are
produced. As an example of services, a physician’s office and
equipment are the physician’s property and are used in the
treatment of patients. The heart of capitalism is the producer’s
right to make what he wants and the consumer’s right to
choose what to buy.

The Railroads
The first transcontinental railroad
The American West

TranscontinentalRR
• The transcontinental railroad
made travel across the country
faster, cheaper and more
efficient.

The Transcontinental Railroad
The transcontinental railroad in North America became a reality on May 10,
1869, when the tracks of the Union Pacific joined those of the Central Pacific
at Promontory, Utah. The event fulfilled dreams of spanning the continent
that were spurred by settlement of the American West and that dated back to
at least 1845. Interest in a transcontinental railroad was heightened by the
acquisition of Oregon (1846) and California (1848) and the subsequent gold
rush. In 1853, Congress appropriated $150,000 to defray expenses of
surveying feasible routes, but the question of the best one quickly became a
matter of sectional controversy.
Once the South left the Union, Congress pushed through the Pacific Railroad
Act (July 1, 1862), which authorized the Central Pacific to build eastward
from San Francisco and the Union Pacific to build westward from Omaha,
Nebr., via South Pass; the two were to join at the California-Nevada line.
Each company was to receive 400 ft (122 m) of right-of-way through public
(or 100 ft/31 m--through private) lands and 10 alternate square-mile sections
of public land for each mile of track laid. Loans of $16,000 to $48,000 per
mile--depending on the grade of the terrain--were also available as a first
mortgage on the railroad. In 1864, Congress doubled the land grant and
made the financial subsidy a second lien on the property. Congress yet again
amended the original

TheTranscontinental
Railroad(cont'd)
legislation in 1866 to allow the Central Pacific to advance
eastward until it met the Union Pacific, thereby turning
the project into a construction race.

The Last Spike by Thomas Hill, 1869
Golden spike that was donated by
the governor of Arizona Territory.
It is one of four ceremonial spikes
driven at the completion (but is not
the final golden spike).

TheBuildingofthe
Railroads
• Built in 1860s
• Two companies
– Central Pacific Railroad Company
– Union Pacific Railroad Company
• Met and joined railroad in Promontory,
Utah
• Date of completion 10 May 1869
• By 1893 there were 6 major railroad
companies

WhydidAmericaneed
Railroads?
• Communication from East to West was not
very good
• Travelling time from East to West took 6
months +
• It would help fulfil ‘Manifest Destiny’
• The U.S. needed to keep up with other
countries
• Trade links with China and Japan
• Help to bring law and order to the West

EffectoftheRailroads
• Previous methods
– Wagon Train
– Foot
– By boat
– Pony Express
• The railroad
turned a 6 month
journey into a
maximum of 8
days

Effect of the Railroads: Cheap land for
people wanting to go West
• Once the Railroads
were built the
Railroad companies
had no use for the
excess land
• Sold land off cheap
• Benefitted
Homesteaders and
Ranchers who came
west.

EffectoftheRailroads
• Hunters used the
Railroad to go west to
hunt the buffalo
• Hunters were only
interested in buffalo
hides
• 1875 southern buffalo
herds were wiped out
• 1885 northern buffalo
herds wiped out
• Indians depended on
the buffalo, but now
they were almost
extinct!

Effect of the Railroads: Helps develop
the Cattle Industry
• Cattle were transported
by the railroads making
it easier to move them
from Texas to the East
• Cow Towns grew up
around these railroad
stops

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