14.3
Big Business and Labor
Notes
Why was Andrew Carnegie successful when others were not?
Management practices that changed business1. Finding the cheapest way to produce better products
a. New machinery
b. New techniques
- accounting systems
- tracking systems
- vertical integration- buying out of suppliers to control
supply chain
- horizontal integration- buying out competitors to
eliminate competition
2. Finding talented people
a. offering stock options (ownership)
b. encouraging competition among employees
What other explanation was there for Carnegie’s success?
-Scientists explained it by using the evolutionary theories of
Charles Darwin
Social Darwinism-explains the success of some businesses while others failed
States that,
without government intervention the best businesses and businessmen
would be successful, and those less suited for business would be
overtaken by better ones and eventually fail
Some religious leaders explained it by saying,
“those who are rich are favored by God, and therefore the poor must be
lazy or inferior and deserved their place in society”
What strategies enable big business to eliminate competition?
“If you can’t beat them, join them.”
-monopolies
Monopoly-the complete control of industry production, wages, and prices by
an individual or a company
-holding companies
Holding company-a company sole purpose is to buy up stock in a another
company so that they have influence or eventually own it
-establish trusts
Trust-a company joins with a competitor and a group of trustees ran the
company as if it were one large company
-John D. Rockefeller and the “robber barons”
-men who used unethical practices to gain control of an industry
-sell at below market prices to drive competition out
-paid low wages
-once they controlled it they raised prices and made huge profits
What did the government do to try to stop big business and the robber
barons?
Sherman Antitrust Act- law that made it illegal to form a trust that
interfered with free trade (controlled prices)
-nearly impossible to prosecute these cases, but did have some success
How did economic factors limit industrialization in the south?
-devastation from the Civil War economically
-were at the mercy of North (railroads)
-high taxes and added costs to needed materials
How did industrial working conditions contribute to the growth of labor
unions?
-poor working conditions
-dangerous jobs and machinery
-long hours
-low wages
-dirty, unhealthy work sites
-sweatshops
-workers rose up against heir owners demanding improved conditions
-NLU – National Labor Union founded by iron workers in 1866
-equal pay for equal work
-injury prevention in the work place
-eight hour work day
-Triangle Shirtwaist Factory fire forced employers and public
to no longer ignore dangerous working conditions
-Samuel Gompers formed the American Federation of Labor (AFL)
-unique in that it joined all craft unions together as one
-increased power to push for - collective bargaining
IWW- International Workers of the World
-joined unskilled workers together as a union
-Strikes generally hurt unions and many lost importance after major strikes
-1877 Strike- B&O Railroad and other lines went on strike for week
- President had to step in to stop strike
-Haymarket Affair-McCormick Harvester Plant
-bombed police
-Homestead Strike-Carnegie Steel Company
-5 month long strike in which workers took over plant
Mary Harris Jones organized women
-helped pass child labor laws
-As unions became more powerful management and the government refused
to recognize them as representatives of the workers
-discouraged union membership