CHAPTER 13

Section 1: Origins of the Industrial Revolution

Section 2: The Factory System

Section 3: New Methods and Business Organizations

Section 4: Living and Working Conditions

Section 5: Socialism

The Industrial Revolution

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13.3 Bell Ringer:What is the chain of events in the business cycle?(create a Flow Map)

New Methods and Business Organizations

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THE BUSINESS CYCLE

falling demand for goodsDEPRESSION

PROSPERITY rising demand for goods

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Capitalism• Economic system

where individuals (not gov’ts) control the factors of production.

• Businesses and the means of production are privately owned and operated.

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Industrial Capitalism: produce and manufacture goods.

Commercial Capitalism: Merchants bought & sold goods.

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Capitalist: investor in a business…became more involved in producing and manufacturing goods ----

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Division of Labor and Interchangeable Parts

• Divided into steps• Hire unskilled labor for each step

– DIVISION OF LABOR!

• Increased production• Lowered costs• MORE PROFIT

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Eli Whitney• Used division of labor to make muskets• Parts were all alike• interchangeable

parts• Speedy production

of inexpensive muskets

• Easily repaired!

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Mass ProductionProducing large numbers of identical items

What do you need for Mass Production?

Division of labor

Use of interchangeable parts

An assembly line

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The Assembly Line

Parts brought together to one location

Carried from worker to worker

Saved time and energy

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Henry Ford• Used a conveyor belt• Founded one of the

largest industries in the world

• Model T would be assembled in 93 min.

• Other industries would mass produce items….

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Rise of the Corporation

Sole proprietorship: one person owns & runs the business.

Partnership: two or more people own and run a business.

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Rise of the Corporation• Company that allows people

to buy “shares of stock”• Each share would receive a

portion of the profits

• By late 1800s, some corporations were very large and powerful.

J.P. Morgan – US Steel

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Monopoly

When a corporation gains COMPLETE CONTROL over the production or sale of a good/service

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CartelWhen corporations join together to control every stage of an industry.

Example: German steel industry -coal & iron mines -steel mills -factories

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business cycle

Alternating periods of prosperity and decline

depression

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19th-century political cartoon of Rockefeller, caricatured as "King of the World" sitting on a barrel of oil.

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Any Questions?

QUIZ TIME!

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SECTION 3New Methods and Business Organizations

THE BUSINESS CYCLE

falling demand for goods

large firm reduces orders for iron & lays off workers

iron suppliers cut production & lay off workers

employers pay less

many workers competing for jobs

workers buy less

prices go up to cover the cost of production

rising demand for goods

new factory opens & hires many workers

wages go up and people buy more

production increases to meet demand

more machines and workers needed

factories increase orders for iron and hire more workers

PROSPERITY DEPRESSION