The Rise of Industrialism

Chapter 13

Before this time U.S. mainly Agricultural Society.TJ saw U.S. as a land of Yeoman farmers

Inventions needed investors to be able to fund these new ideas

capitalism: an economic system in which factories, equipment, and other means of production are privately owned rather than controlled by government.Investing was a big risk, but paid off for manyExample: Edison backed by J.P Morgan

Patents protected inventors and investors

13.2 New Innovations and Technologies

Big InventionsElectric Lightbulb- Thomas Edison ( the Wizard

of Menlo Park)The Telegraph – Samuel F.B. MorseThe Telephone- Alexander Gram BellThe Automobile- Came from EuropeThe First powered airplane flight- The Wright

Brothers near Kitty Hawk, NCOil Drilling- Use instead of Whale OilBessemer Process- New stronger steel= bigger

buildingscentral generating station for electricity-

Thomas Edison

13.2 New Innovations and Technologies

Companies selling goods nation wide- need new ways to operate to meet demand

How to do it?Specialized MachineryMany Unskilled Workers- and a few supervisorsReorganize the factory- one person does a single

taskFredrick Taylor

Motion Studies- more efficient- The Principles of Scientific Management

Henry FordPioneered the moving assembly line

13.3An Explosion of Industrial Growth

As business grows the factors of production grow as well land, labor, and capitalCapital is any asset that can be used to produce an income.

Money, buildings, tools, and machinery are all forms of capital.

A corporation is a company that is recognized by law as existing independently from its ownersBy buying stock, investors became owners of the company.

Business owners began devising ways to reduce competition. One method was to buy or bankrupt competitors.

Rockefeller- Standard Oil- Monopoly. Monopoly-company that completely dominates an industry

trusts [trust: a set of companies managed by a small group known as trustees, who can prevent companies in the trust from competing with each other]. A trust is a set of companies that are managed by a small group known as trustees. Keep companies from competing

13.3 An explosion of Industrial Growth

Trusts and monopolies concentrated capital—and power—in the hands of a few peoplehorizontal integration [horizontal integration:

a corporate expansion strategy that involves joining together as many firms from the same industry as possible]. – Rockefeller- Standard Oil

vertical integration [vertical integration: a corporate expansion strategy that involves controlling each step in the production and distribution of a product, from acquiring raw materials to manufacturing, packaging, and shipping].- Carnegie Steel

13.4 Big Business and the Government

The Government Leaves Business Alone laissez-faire [laissez-faire: the idea that the free

market, through supply and demand, will regulate itself if government does not interfere]. “Allow to do” or “Leave business alone”

social Darwinism [social Darwinism: an idea, based on Charles Darwin's theory of evolution, that the best-run businesses led by the most capable people will survive and prosper],

The Government actually aided business by tariffs and low prices on landAllows the economy to prosper By 1900, the United

States had the strongest industrial economy in the world.

13.4 Big Business and the Government

Government Takes Some Action to Limit BusinessSherman Antitrust Act [Sherman Antitrust

Act: an 1890 federal law that outlawed trusts, monopolies, and other forms of business that restricted trade]

the Sherman Antitrust Act was full of vague language which made it hard to enforce

13.4 Big Business and the Government

Book by Mark Twain-The Gilded Age. = Something that is gilded looks like gold, but only on the outside.

3 Industries make U.S. economy soar1. Steel-Carnegie2. Oil- Rockefeller3. Railroads-Vanderbilt

Entrepreneurs-bold risk-takers who established new businesses. Along the way, they amassed huge fortunes.

Carnegie’s Rags to riches storyAfter arriving from Scotland in 1848 at the age of 12,

he worked in a Pennsylvania cotton mill earning $1.20 a week. His thrift and shrewd investments gave him a $50,000 annual income by the time he was 30.

"A man who dies rich dies disgraced."

13.5 The Guilded Age

philanthropist [philanthropist: a person who gives money to support worthy causes]Carnegie and Rockefeller both gave

millions to education, libraries, etc. Vanderbilt never believed he had a duty to

use his wealth to benefit society. Nevertheless, he donated $1 million to found Vanderbilt University in Nashville, Tennessee.

Robber Barons or Captains of Industry??

13.5 The Guilded Age