Industrial Revolution Working Conditions. Division of Labor Changes Manufacturing one task When someone completes one task as part of the job Positive.

Industrial Revolution

Working Conditions

Division of Labor Changes ManufacturingWhen someone

completes one task as part of the job

Positive: increases productivity for businesses

Negative: workers no longer take pride in work and removes creativity

Think About Making Shoes

He may never work on shoes!

Growing Work Force

ImmigrantsFormer Farm FamiliesWomen and ChildrenDoes not include

African Americans

Survival Guide for Poor Families (aka, immigrants!)

Send children as young as age 6 to work

Force children to leave school

Ask for aid from a private charity (church, etc.) Government Welfare is non-existent at this time!

Workday Length

Typically 12 hours/day, 6 days/week

The Growth of Big Business

The Good and The Bad

Robber Barons

Business leaders who made fortune by taking advantage of others.

Drained natural resources, paid low wages to workers, required long hours of employees

“Robber Barons”

They persuaded public officials to interpret laws in their favor.

They ruthlessly drove their competitors to ruin.

• Paid their workers meager wages and forced them to toil under dangerous and unhealthful conditions.

Captains of IndustryThe business leaders served their

nation in a positive way.

Increased the supply of goods by building factories.

Raised productivity and expanded markets.

Created jobs that enabled many Americans to buy new goods and

raise their standard of living.

• Also created museums,

libraries, and universities, many of which still serve the public today.

Carnegie Hall

Robber Baron – negative

Robber Baron versus Captain of Industry

Captain of Industry – positive

Andrew Carnegie

Andrew CarnegieCaptain of Industry for steel

production in Pittsburgh

Used Bessemer Process to produce stronger steel

Utilized vertical integration or consolidation

Scottish Immigrant

Carnegie as a PhilanthropistA Philanthropist uses

wealth to improve societyCarnegie funded the

building of libraries, education facilities, and music/arts facilities

“Gospel of Wealth”Carnegie’s philosophy

- A person should be able to make as much money as they can, BUT they should also use their wealth to improve society.

Social Darwinism

Based on Darwin’s Theory of Evolution (1859) regarding natural selection and survival of the fittest

Businessmen are justified in using any means to become rich and powerful – the government should stay out!

American businessmen adopted eagerly the ideology of Social Darwinism in order to defend their business practices as "natural."

James J. Hill, a leading "Robber Baron" of the railroad-building era, saw the chance to justify his actions with "scientific" terminology:

"The fortunes of railroad companies are determined by the law of the survival of the fittest." --James J. Hill

Monopoly vs. Cartel

Monopoly – one company with complete control of a product or a service

Cartel – a loose association of businesses in a similar field or that make the same product and agree to limit supply to drive up prices

John D. RockefellerFormed Standard

Oil Company

John D. Rockefeller and the Standard Oil Company

Wealthy individual who saw the oil industry as a way to get richer

Made illegal deals with railroads to transport oil cheaper, thus weakening other refineries that he would eventually buy

Utilized horizontal integration or consolidation for business purposes

Also important re: Standard Oil ... Trusts

A group of separate companies that are placed under the control of a single managing board (Board of Directors)

Trusts limit competition and cause prices to rise

What’s so bad about Monopolies?

They underpay workers and drive competitors out of business

They offer consumers NO CHOICE!

Prices rise and quality falls!

Which Led to the Sherman Antitrust Act

Enacted in 1890Effort by Congress to end trusts

Ineffective due to lack of enforcement

How Do I Get a Monopoly?

Vertical Integration/Consolidation

Buying out or controlling businesses related to various phases of production for one product

Carnegie Steel/Andrew Carnegie

Controlling the Market

Bob’s Pizza

Using Vertical Integration, Bob could control the Pizza market in

town by controlling many

of the costs associated with

making his pizza!Bob’s Farm

Bob’s Cheese Factory

Bob’s Trucking Company

Horizontal Integration/Consolidation

When you buy out all of your competitors (firms that are part of the same business)

Standard Oil Company/John D. Rockefeller

Controlling the Market

Bob’s Pizza

Delaware

Pizza

Pizza PizzaHappy Time PizzaUsing Horizontal Integration, Bob could

control the Pizza market in town by buying the other Pizza shops!

Bob’s Pizza Bob’s Pizza Bob’s Pizza

Bob’s Pizza

Business CycleThe growth and

contraction of a nation’s economy

A new concept in the mid-late 1800s