The Rise of Industrialism
 Before this time U.S. mainly Agricultural Society.
 TJ saw U.S. as a land of Yeoman farmers
 Inventions needed investors to be able to fund these
new ideas
 capitalism: an economic system in which
factories, equipment, and other means of
production are privately owned rather than
controlled by government.
 Investing was a big risk, but paid off for many
 Example: Edison backed by J.P Morgan
 Patents protected inventors and investors
 Big Inventions
 Electric Lightbulb- Thomas Edison ( the Wizard of
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Menlo Park)
The Telegraph – Samuel F.B. Morse
The Telephone- Alexander Gram Bell
The Automobile- Came from Europe
The First powered airplane flight- The Wright Brothers
near Kitty Hawk, NC
Oil Drilling- Use instead of Whale Oil
Bessemer Process- New stronger steel= bigger buildings
central generating station for electricity- Thomas Edison
 Companies selling goods nation wide- need new ways
to operate to meet demand
 How to do it?
 Specialized Machinery
 Many Unskilled Workers- and a few supervisors
 Reorganize the factory- one person does a single task
 Fredrick Taylor
 Motion Studies- more efficient- The Principles of
Scientific Management
 Henry Ford
 Pioneered the moving assembly line
 As business grows the factors of production grow as well
 land, labor, and capital
 Capital is any asset that can be used to produce an income. Money,
buildings, tools, and machinery are all forms of capital.
 A corporation is a company that is recognized by law as existing
independently from its owners
 By buying stock, investors became owners of the company.
 Business owners began devising ways to reduce competition.
One method was to buy or bankrupt competitors.
 Rockefeller- Standard Oil- Monopoly.
 Monopoly-company that completely dominates an industry
 trusts [trust: a set of companies managed by a small group
known as trustees, who can prevent companies in the trust
from competing with each other]. A trust is a set of companies
that are managed by a small group known as trustees. Keep
companies from competing
 Trusts and monopolies concentrated capital—and
power—in the hands of a few people
 horizontal integration [horizontal integration: a
corporate expansion strategy that involves joining
together as many firms from the same industry as
possible]. – Rockefeller- Standard Oil
 vertical integration [vertical integration: a corporate
expansion strategy that involves controlling each step
in the production and distribution of a product, from
acquiring raw materials to manufacturing, packaging,
and shipping].- Carnegie Steel
 The Government Leaves Business Alone
 laissez-faire [laissez-faire: the idea that the free
market, through supply and demand, will regulate
itself if government does not interfere]. “Allow to
do” or “Leave business alone”
 social Darwinism [social Darwinism: an idea, based
on Charles Darwin's theory of evolution, that the
best-run businesses led by the most capable people
will survive and prosper],
 The Government actually aided business by tariffs and
low prices on land
 Allows the economy to prosper By 1900, the United States
had the strongest industrial economy in the world.
 Government Takes Some Action to Limit Business
 Sherman Antitrust Act [Sherman Antitrust Act: an
1890 federal law that outlawed trusts, monopolies,
and other forms of business that restricted trade]
 the Sherman Antitrust Act was full of vague language
which made it hard to enforce
 Book by Mark Twain-The Gilded Age. = Something that is
gilded looks like gold, but only on the outside.
 3 Industries make U.S. economy soar
 1. Steel-Carnegie
 2. Oil- Rockefeller
 3. Railroads-Vanderbilt
 Entrepreneurs-bold risk-takers who established new
businesses. Along the way, they amassed huge fortunes.
 Carnegie’s Rags to riches story
 After arriving from Scotland in 1848 at the age of 12, he worked
in a Pennsylvania cotton mill earning $1.20 a week. His thrift
and shrewd investments gave him a $50,000 annual income by
the time he was 30.
 "A man who dies rich dies disgraced."
 philanthropist [philanthropist: a person who
gives money to support worthy causes]
 Carnegie and Rockefeller both gave millions to
education, libraries, etc.
 Vanderbilt never believed he had a duty to use his
wealth to benefit society. Nevertheless, he donated $1
million to found Vanderbilt University in Nashville,
Tennessee.
 Robber Barons or Captains of Industry??