Major belief in the late 1800s
“Social Darwinism”
“Survival of the fittest” in the business world People who are good at business will succeed
The businesses that “survived” were those that
killed their competition!
PROBLEM…
Entrepreneurs in the late 19th Century (1800s)
organized production to make increasing profit, leading to big business
REMEMBER…
Uniting companies in the SAME industry
Horizontal Consolidation
Merger ~ buy out other companies
Trust ~ group of people runs separate companies as one large corporation
One company controls an industry’s production, quality, wages, and prices
MONOPOLY
Caused by mergers/trusts Created in order to make more and more profit
Putting together companies from DIFFERENT industries
Vertical Integration
Buy out suppliers in order to control the quality & price of your product
Loss of competition leads to high prices
Effects of Monopolies
Poor working conditions
Monopoly ownersRobber Barons
Controlled the market to increase their own wealth
Didn’t share wealth with employees or consumers
Monopoly ownersRobber Barons
RESULT: wealth & resources were controlled by just a few people
Very few very wealthy people & many poor people
Examples…Robber Barons
U.S. Standard Oil
John D. Rockefeller
Examples…Robber Barons
Banking Industry
J.P. Morgan
Examples…Robber Barons
Carnegie Steel
Andrew Carnegie
1890~ Sherman Anti-trust Act
Government Response
Made monopolies illegal
Law was unsuccessful because it was not easy to enforce and was not upheld by the Supreme Court