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Growth of Big Business

Explore the era of the Gilded Age, marked by both wealth and corruption, focusing on the Industrial Revolution in America and the growth of big business. Learn about key figures, technological advancements, social impacts, and economic transformations that shaped this pivotal period in U.S. history.

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Growth of Big Business

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  1. Growth of Big Business

  2. The Gilded Age • The Gilded Age - from a novel of the same name published in 1873 by Mark Twain & Charles Dudley Warner. Though fictional, is a critical examination of politics and corruption in the United States during the nineteenth century. • glittering on the surface but corrupt underneath • Time period from ~1870 to 1890. • The closing of the Frontier and the creation of a modern industrial economy. • “What is the chief end of man?--to get rich. In what way?--dishonestly if we can; honestly if we must.” ~ Mark Twain-1871

  3. The Industrial Revolution in America

  4. Main Ideas of Industrial Revolution in America Three technological developments that provide the foundation for the “second” industrial revolution in the U.S. • electric-powered machines [Edison] • internal combustion engines [Ford] • new industrial and consumer applications for chemicals [du Pont]

  5. Main Ideas of Industrial Revolution in America Industrialism changed the nature of work. • uneven distribution of power [workers and owners] • employees rather than producers • labor specialization through simplification [assembly line] • brought more women and children into the labor force • labor unrest – wages, discrimination, safety, disability insurance and pensions

  6. Main Ideas of Industrial Revolution in America America became a consumer-oriented society. • Advertising and Brand names [Levi Strauss – 1853] • department stores and chain stores [Sears – 1886; Montgomery Ward -1872; JC Penny – 1913]

  7. Women Go To Work

  8. Child Labor

  9. Industrial Accidents

  10. Democracy & Free Markets Capitalism - competition determines prices and wages, and most industries are run by private businesses. laissez-faire: no government intervention in economy Social Darwinism inequalities were part of the natural order of life. Stronger people, businesses, and nations will prosper weaker ones would fail in “survival of the fittest.” A Favorable Climate for Business

  11. What is Big Business? • Often, a negative term used to describe the political and economic power of large corporations. • Large corporations have the ability to influence market prices. • Wal-Mart/Sam’s Club • Microsoft • ExxonMobil • DeBeers [the diamond people] • AT&T [Ma Bell] before the split in 1982

  12. Competition • How do we as Consumers benefit from competition in the Market Place? • Lower Prices • Better Quality • More Choices • Increased Availability of Products • Customer Convenience

  13. How to Eliminate Competition • During the rise of Big Business, several men were able to eliminate their competition • Ways to eliminate competition? • Trust • Cartel • Monopoly

  14. Trust • A group of separate companies placed under the control of a single managing group or board of directors. • The managers oversee and control the actions of all the companies • Set prices • Set wages • Control distribution • Competition is reduced/eliminated

  15. Do Now: What social philosophy helped support the idea of “laissez-faire” economics? How did/does competition help consumers and workers (in theory)?

  16. Cartel • A loose association of businesses that create the same product. • Members agree to fix prices, limit supply, in order to limit competition. • They agree to not compete against one another. • OPEC • Illegal Drug Cartels

  17. Monopoly • Monopoly • One company has exclusive control over an entire industry. • They are able to wipe out all of their competition. • Two Methods of forming a monopoly: • Vertical Integration • Horizontal Integration

  18. Vertical Integration S U P P L Y C H A I N One Company Owns all Phases of Production From Top To Bottom Raw Materials Assembly and Manufacturing End Product Distribution

  19. Horizontal Integration Small Business Small Business Small Business Purchased by one Company Small Business Small Business Small Business To Form a Giant Company Small Business Small Business Small Business Small Business Small Business Small Business

  20. Vertical & Horizontal Integration

  21. Robber Barons and Captains of Industry • Due to Laissez Faire economics, several individuals create monopolies, and become incredibly wealthy. • Two conflicting views describe these Business Industrialists [entrepreneurs]. • Robber Barons [negative term] • Captains of Industry [positive term]

  22. Robber Baron • Negative term that describes a business leader that has built his wealth by unethical methods. • Robs from the consumers • Abuses employees and workers • Drives competitors out of business (And enjoys it!) • Persuades government officials to pass favorable business legislation [political corruption].

  23. Captain of Industry • A business leader that has positively contributed to society as he built wealth. • Created jobs/did not abuse employees • Moral business philosophy • Philanthropy – donates money or goods to a charity & community • Creates museums, libraries, universities

  24. Robber Barons or Captains of Industry Andrew Carnegie J.D. Rockefeller Cornelius Vanderbilt J.P. Morgan

  25. Political Cartoons

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