THE RISE OF INDUSTRY. Vocabulary Gross National Product (GNP): total value of all goods and services produced by a country Laissez-faire: policy that.

THE RISE OF INDUSTRY

Vocabulary • Gross National Product (GNP): total value of all goods

and services produced by a country • Laissez-faire: policy that government should interfere as

little as possible in the nation’s economy • Entrepreneur: one who organizes, manages, and

assumes the risks of a business or enterprise• Starts their own business

The US Industrializes• By the start of the Industrial

Revolution in the 1800s, many areas of the US was still farming country• Out of 30 million people, 1.3 million

Americans worked in industry by 1860

• After the Civil War, many Americans left their farms to work in mines and factories

• By the early 1900s, Americans had transformed the US into the world’s leading industrial nation• The nation’s GNP was eight times

greater than it had been before the Civil War

Natural Resources• The United States had an abundance of natural resources or raw materials• Water• Timber• Coal• Iron• Copper

• American companies could obtain them cheaply and did not have to import them

A Newly Abundant Resource

• A new resource was found in the US: Petroleum• Could be turned into

Kerosene• American industry was

built around petroleum • Was found in Western

Pennsylvania• First oil well was drilled in

Titusville, Pa

• Fueled economic expansion

A Growing Workforce• Having human resources were just as important as

natural resources• Between 1860 and 1910, the population of the US tripled

• Population grew because:• Large migration

• Conditions in China and Europe led people to people to leave their nations and travel to the US

• Opportunity• US was in need of workers with the growing industries

Free Enterprise • Free enterprise allowed the

US to industrialize rapidly • Americans embraced the

idea of laissez-faire• Supporters: believed the

government should not interfere in the economy other than to protect privacy rights and maintain peace

• Believed if the government was involved it would increase cost and hurt society

Idea of Laissez-faire• Relies on supply and demand rather than government

regulation• Idea of that a free market allows competing companies

which creates more wealth• Attracted entrepreneurs

• More businesses brought more industry

Government’s Role in Industry • State and federal governments kept taxes and spending

low and did not impose regulations• Did not try to control wages and prices• Adopted policies that helped industries

The US and Laissez-faire• US created the largest growing industry in the world

making it successful• Constitution bans states from imposing tariffs and little

regulation against goods crossing the country • Practiced free trade in labor

• Allowed the large influx of immigration

US Against Laissez-faire• High tariffs contradicted laissez-faire ideas and hurt many

Americans• US raised tariffs on imported goods and in return countries raised

tariffs on American goods• Farmers were hurt the worse

Necessary Measures• Business leaders and Congress members believed the tariffs were necessary• Western Europe was already

industrialized and many wanted American companies to be able to compete• Tariffs were put in place to make

them more competitive• Wanted Americans to buy

American goods

Inventions Lead the Way

• Important inventions emerged during the Industrial Revolution that helped increase the nation’s productivity• Increased productive

capacity • Improved the network of

transportation and communication

• New inventions led to new corporations• Increased wealth and jobs