Industrialization
Making of the Good Life
INDUSTRY Causes of
Industrialization

Abundant Natural Resources
– Lumber, Coal, Oil

Labor
– Immigrants from Europe & Asia
Supportive Governmental Policies
 Nation’s Cultural Climate

INDUSTRY: Effects of
Industrialization
Increased standard of living
 Increase in cities
 Mass Consumerism and increase in prod.
 Extreme concentration of wealth
 Better transportation
 Coal up 800%
Farmers out # 3 to 1
 Steel up 800%

TECHNOLOGY: Impact of
Industrialization


Major Industries Develop
ELECTRIC LIGHT
Railroad
Telegraph
Telephone
Cheap Consumer Goods Produced
UNIONS: Problems of
Industrialization
Low wages and poor conditions for
workers
 Small group of wealthy business owners
 Millions of poor workers
 No Government regulation
 Pollution of the Environment
 1885 Knights of Labor
 American Federation of Labor

Consequences of Labor Uprising
1886: Haymarket Riot
 1892: homestead
 1894: Pullman Strike

BIG BUSINESS
The Mindset of Big Business
“The Growth of A Large Business is
Merely a Survival of the Fittest”
-John D. Rockefeller, founder of
Standard Oil
“Watch the costs, and the profits
will take care of themselves”
-Andrew Carnegie, founder of Carnegie
Steel
BIG BUSINESS
CARTELS
 ASSOCIATIONS
 Trusts
 MONOPOLIES
 INTERSTATE COMMERCE COMMISSION
 SHERMAN ANTI-TRUST ACT
 BY 1900: LARGE CORPS DOMINATED

The Good Life
 Social
Darwinism
–Economic Competition is Natural
Law
–The Fittest in Business will Survive
–Business should not be regulated
–The weak companies go under,
while the Strong Survive
The Good Life
 Gospel
of Wealth
–Economically Successful People
have the Responsibility to use
their money for Charity and
Social Purposes
Caption reads: "Forty-Millionaire Carnegie in his Great Double Role. As
the tight-fisted employer he reduces wages that he may play
philanthropist and give away libraries, etc."
This cartoon originally appeared in the July 9, 1892 edition of The
Saturday Globe, a pro-union weekly out of Utica, New York.
The Good Life
 How
to Succeed: Horatio Alger
 An Ambitious Person can Succeed
Financially:
 if they Work Hard,
 are Thrifty,
 Practice Integrity,
 Follow the Rules,
 and Have some Luck
The Good Life
 Materialism:
–Idea that Material Objects such as
Goods and Wealth offer the Highest
Values to be Pursued in Life
–STOP
What are some problems
with these Theories?
Which do you believe?
Were Carnegie and Rockefeller
Captains of Industry or
Robber Barons?
Andrew Carnegie: “Rags to
Riches Success Story”
Came
to the US as a poor 12 year old
Scottish immigrant
Used vertical integration to control all
aspects of manufacturing steel and earn more
than $40 million
Rockefeller and Standard Oil
Company

Emphasized Cost Cutting and Efficiency
– Undersold the competition
Stressed Importance of Customer Loyalty
 Used the Latest Refining Technologies
 Advertised Heavily
 Controlled Transportation: Tanker Cars and
New Pipelines

Ousting the Competition
Rockefeller tried to buy out local refineries
 Set up Pools: an agreement between
several companies that set production
quotas and fixed prices
 By 1879: Rockefeller controlled 90% of
the country’s oil-refining capacity

Standard Oil Trust


Trust: Business Organization which granted trust
certificates in exchange for stock.
Purpose: Board of Trustees set up to run several
corporations as one giant business and establish a
monopoly
– Are monopolies good or bad
for the economy?
Business Integration

Vertical Integration: Control every part of
production and retailing
– Ex: If Papa John’s both grew the food to
make pizza and then sold the pizza to the
public

Horizontal Integration: Merge all
competing companies into one giant
system.
– Ex. If Papa John’s bought out all other pizza
places like Domino’s, Pizza Hut, etc.
Government Regulation
Fear that Trusts would raise prices and run
out small business
 Sherman Anti-Trust Act 1890

– Outlawed trusts and any other contracts or
combinations in restraint of trade
Companies found new ways around law
 Supreme Court lenient
on enforcement
