Robber Barons or Captains of Industry?. Basic Economics of 19 th Century - economic system where businesses are operated by private owners -Laissez-Faire?

Robber Barons or Captains of Industry?

Basic Economics of 19th Century

- economic system where businesses are operated by private owners- Laissez-Faire?- Protective Tariff – protect US businesses- Mass production – use machines to quickly make

goods- Corporation – group ownership – invest in a

company (shares/stocks)- - complete ownership of

a company

Protective Tariff

Monopoly

Trusts

• Vertical Integration – control every step of the manufacturing process– Brainstorm – automobile– Carnegie – steel

• Horizontal Integration – ally with competitors to control an entire market– Brainstorm – Nike– Rockefeller – Oil

• Trust – group of companies controlled by a single board

Cornelius Vanderbilt

• Railroads• $185 billion (today’s

money)

JP Morgan

• Banker– US Steel– General Electric– AT&T

– $41.5 Billion (today’s $)

John D Rockefeller

• Oil (kerosene, gasoline)– Standard Oil Company– $340 billion (today’s)

Thomas Alva Edison

• Edison Electric (now GE)• Light bulb/ DC • $170 million (today’s $)

Andrew Carnegie

• Steel– Carnegie Steel Co.– Bessemer Process –

cheap steel– “Gospel of Wealth”– $310 billion (today)

Good or Bad?

Captains of Industry• Philanthropists

– Grand Central Station– Rockefeller Center– Carnegie-Mellon University– Vanderbilt University– Carnegie Libraries– University of Chicago

• Jobs• Cheaper products• Bailed gov’t out

Robber Barons• Long hours, small wages• Monopolists• Child labor• Destroyed small businesses• Unfair business practices