Triumph of Urban Capitalism
1876-1900
What is urban capitalism?
What is economic growth?
• Economic growth: Economic development
involves both quantitative and, above all,
___________________ change.
• Examples of economic growth, now & then
• Manufacturing Output. Compared with 1900,
manufacturing output in the United States in 1870
was _______ percent.
Four Sources of Economic
Growth
•
•
•
•
Westward Movement.
Six New Industries
Rise of Big Business
Public mood favorable to economic growth
Westward Movement
• __________________ of large numbers of
people coupled with the introduction of
_______________ into the American _____
____________________.
• Film: The Real West
Six New Industries
• Telephone: What effect did the coming of the
telephone have on business?
• Electrical Power
– Three-fold role of Thomas Alva Edison
• Steel
– How did this industry resolve a technological
bottleneck?
– Andrew Carnegie
Six New Industries (Continued)
• Petroleum Industry: In the late 19th century what
products were output from the petroleum industry?
• Railroad Industry: What impact did the growth of
the railroad network have on the American
economy by 1900?
• Food Processing: What did Gustav Swift and
Philip Armour invent?
Rise of Big Business
• What are other ways of asking this
question?
• What institution emerges as a major force in
American business and the American
economy during this period?
Rise of Big Business (cont.)
1. Before the Civil War, how were most
businesses in the United States organized?
2. Post-Civil War business opportunities as a
result of railroad growth leading to larger
markets-nationalization of the economy
3. How can a business owner exploit the new
opportunities?
Rise of Big Business (cont.)
4. Expanding output by means of:
•
•
Mechanization
Factory System
5. Financial Bottleneck
•
•
Mechanization requires massive amounts of
financial capital
Business Law: What are the legal limits on
partnerships?
Rise of Big Business (cont.)
– Corporations: What in business law makes the
corporation attractive?: Stocks and Bonds
– Corporations: What makes a corporation a good
tool for governing (or managing) a large,
complex organization
– In which industry, even before the Civil War,
did corporations make their first appearance?
Rise of Big Business (cont.)
6. Boom-Bust Cycle
•
•
•
Means ___________ competition
Emphasis on controlling costs
“Dog eat dog” business environment
7. Consolidation as the answer—Use John D.
Rockefeller & Standard Oil as example
• Bring entire industries under centralized
control
Rise of Big Business (conclusion)
–
–
Horizontal and vertical expansion
Pools, Trusts, and Holding companies control,
reduce, and eliminate competition
8. Social Result of the rise of the corporation
is a new class of business managers
•
•
Source of power of this new class
Ownership and management became separate
Public Mood Favorable to Economic
Growth
• An age of “laissez faire” attitudes toward
economic activity. How the term “laissez faire”
can imply different things.
– Definition of laissez faire in the context of the late 19th
century endorses a limited role for government
– This limited role is to assist the business community to
develop the economy. It rejects an “activist” concept,
that is government has a legitimate role to deal with the
______________________ of economic growth
Protective Tariff as an example of
laissez faire
• What is “the protective tariff”?
• How does it work in practice?
• Which group in the economy actually
“pays” this tax?
• Why is this tax good for all groups in
society, according to its supporters?
Legitimatizing Laissez Faire
• Social Darwinism. Why is “dog eat dogism”
good in the long run?
• Gospel of Wealth
– What did Andrew Carnegie say?
– Who was Horatio Alger and what did he say
about the principles that lead to success?
Rise of the City
City
1850
1900
New York City
695,115
3,437,202
Chicago
29,963
1,698,575
Boston
136,881
560,892
St. Louis
77,860
575,238
New Orleans
116,375
287,104
Omaha
102,555
Denver
133,859
San Francisco
34,776
342,782
Los Angeles
1,610
102,479
Rise of the City (Cont.)
•
•
•
•
Big City -- Urban
Town -- Urban
Village -- Rural
Countryside – Rural
In what context did a majority of Americans
live in 1876? In 1900? In 2000?
Rise of the City (Concl.)
• Rise of Big Business
• Immigration: See Film, The Island Called
Ellis
Tensions and Conflicts
• Robert Kelley-Many Americans did NOT
believe that they were living in a period of
prosperity, but an era of hard times.
• Last few decades witnessed class conflict,
social tensions, and a rural revolt against
growing urban power.
Class Conflict between capital
and labor
• Worsening of Work rather than Marxist theory helps
explain
• Capital demonstrated its power over labor in the:
– Haymarket Riot (1886)
– Homestead Strike (1892)
– Pullman Strike (1894)
• Examples of labor attempting to organize
– Knights of Labor, Socialist parties
– American Federation of Labor: Samuel Gompers & Business (or
Trade) Unionism
Social Tension
1. Anti-Black racism: Interests of African
Americans sacrificed for national unity
2. Victorian Code: What functional roles did
the husband, wife, and child have in
middle class urban households.
3. Nativism: Resistance to late 19th century
patterns of immigration
Rural Revolt against growing
urban power
• Decline of the farmer as the country became
more industrial
– Growing economic inequality
– Cultural denigration
– Physical, social, and psychological isolation
Rural Protest
• Alliance Movement: Emphasis on economic
cooperation
• Populist Party: 1892 Convention –
challenged laissez faire approach to the
economy and government
1896 Presidential Election
• Democratic party – In this campaign, the party
backed monetization of silver & nominated
William Jennings Bryan
• Republicans stood fast on the gold standard and
nominated William McKinley, an advocate of the
tariff
• Republicans won. Jobs were BIG issue
• Bryan’s campaign pointed toward activist
government. Why was this significant?
A Turn in United States Foreign
Policy
Spanish American War—New U.S. role as great
world power. Why this turning?
1. Growing dependence of the United States on
world markets.
2. A new consciousness of militant nationalism.
“A new consciousness seems to have come upon us…. The taste of empire is
in the mouth of the people even as the taste of blood in the jungle.It
means an imperial policy, the Republic taking her place with the armed
nations of the world.” April 1898
A Turn in United States Foreign Policy
(Cont.)
3.
New definition of national security policy
emphasizing “sea power”.
Alfred Thayer Mahan outlined the new policy in: The Influence of
Sea Power Upon History
4.
5.
Venezuelan Crisis of 1895
United States initiated a new relationship with
Great Britain
Influence of Christianity: Protestant leaders viewed
new global role for U.S. as an adjunct to expansion
of Christianity