Big Business and Labor

Main Idea:

Andrew Carnegie

• 19th century industrialist

– Nation’s

– Started new management processes• Searched for ways to make better products cheaply• Incorporated new machinery and techniques that enabled

him to track precise costs

How to Create a Monopoly• Goal:

• Vertical Integration

• Horizontal Integration

• Results:– Control over supplies and limited the competition

Social Darwinism

• Description: theory that stated societies evolve by a natural process through which most fit members survive and demonstrate fitness by accumulating property, wealth and social status

• Significance:

John D. Rockefeller

• “The growth of a large business is merely a survival of the fittest... The American beauty rose can be produced in the splendor and fragrance which bring cheer to its beholder only by sacrificing the early buds which grow up around it.”

John D. Rockefeller• 19th century industrialist

– Standard Oil Company

• Created Trusts

• Management Practices:

– Drove competitors out of business by selling his oil at a lower price than it cost to produce it, Then, when he controlled the market, he hiked prices way up

Merger Mania!

Robber Barons or Captains of Industry?

Robber Barons• Term used by critics

who were alarmed at the tactics of industrialists

Captains of Industry• Term used by admirers

describing business leaders whose means of amassing personal fortune contributes positively to the country in some way– Philanthropy

• They make the honey that contributes the most to the hive

Part Two

Formation of Labor Unions

• Cause:

Newsies

Triangle Shirtwaist Fire

Formation of Labor Unions• Craft Unionism (skilled workers from many

industries)– Samuel Gompers– American Federation of Labor (AFL)– Strikes were major tactic

• Industrial Unionism (all workers from one industry)– Eugene V. Debs

• Industrial Workers of the World (advocated socialism)

• Unions mostly successful in winning reforms

Strikes Turn Violent

• Industry and government responded forcefully to union activity, which they saw as a threat to the entire capitalist system

Haymarket Affair (May 1886)

• Cause:

• Description: – Protestor threw bomb into police line

– Police fired on workers– 4 people hanged as result

• Result:

Homestead Strike (June 1892)

• Cause: workers at Carnegie Steel’s Homestead plant in PA strike for poor working conditions and a wage cut

• Description: – Strike turned violent and forced National Guard to come

• Result:

Pullman Strike (1894)

• Cause: Pullman company laid off may workers and cut wages of rest during economic depression (1893)

• Description: violent strike (unions boycotted Pullman trains)– President Cleveland sent in federal troops

Results of Union Activity

• Government intervention fearing interference with interstate commerce

• Unions remain powerful today!