I’m Better Than You Are

1. I’m Better Than You Are Reality in Room 813… …Life as a Robber Baron… …and Laborers Response Chapter 6 Notes

2. We Just Keep Growing…Hey Laborers, Figure It Out… • When Lincoln was elected to office in 1860, what do you think the U.S. ranked in the world in manufacturing? • Right, it’s 4th • By 1894, what do you think the U.S. ranked in manufacturing? • Of course it’s 1st…why else would I be asking all you?… • How did it happen? • Natural resources were fully exploited, with coal, oil, and iron acquired from the land to make stuff • Massive immigration also allowed the industrialists to hire low-cost labor, often working in two 12-hour shifts, 7 days a week • For you laborers out there, that means the factory was always open—and we’re always making products & money

3. We Want it All… • Mass production methods also allowed factories to produce goods more efficiently • Imaginative ideas were spreading everywhere, as 440,000 patents were issued between 1860 and 1890 • Inventions included the cash register, stock ticker, typewriter, refrigerator car, electric dynamo, electric railway, and the telephone • Women especially worked the typewriter and telephone in newly created employment • Edison is likely the most famous inventor and his light bulb transformed society in and out of the mill, as humans slept about 2 hours less each night on average

4. If You Don’t Like Us……We Don’t Care. We’re Still Rich... • Andrew Carnegie = U.S. Steel • John D. Rockefeller = Standard Oil • J.P. Morgan = Banking and General Electric • The goal of the Robber Barons above (that’s what the people above were called) was to eliminate competition and grow profits • This is great! We make more money! • So what if the worker makes less money, and struggles to feed their family; it’s not like they know what Maslow’s Hierarchy of Needs are…

5. Maslow’s Hierarchy of Needs (Don’t Worry, You Won’t Be Tested on This…But I Think it Helps Explain the Mindset Back Then…and Even Still Applies Today)

6. Carnegie is Movin’ On Up…and Slidin’ On Over… • Carnegie was not concerned with the laborers though • He pioneered the idea of Vertical Integration • This combines all phases of manufacturing into one organization, from mining to marketing • Carnegie’s goal was to improve efficiency by: • making supplies more reliable • controlling the quality of the product at all stages of production • eliminating middlemen’s fees • Carnegie also used Horizontal Integration • This meant bringing competitors together to monopolize a given market • He perfected the strategy of controlling rivals through a trust

7. In Rockefeller, We “Trust”… • Rockefeller’s Standard Oil Company was formed in 1870 • Other smaller oil companies assigned their stock to the Board of Directors of Standard Oil • By 1877, Standard Oil 95% of the world petroleum market—how’d this happen? • Then Rockefeller consolidated the operations of those companies into Standard Oil, using horizontal integration first, and as successfully than anyone else • Weaker companies not in the trust couldn’t compete • By 1882, the nucleus of the great trust had been formed • This led to “trusts” being referred to as any large-scale business combination • JP Morgan also consolidated banking competition, especially after the depression of 1890s • Economic downturns meant smaller businesses struggled to survive; this allowed robber barons to gain a greater percentage of the market

8. How did Carnegie Get Rich? He “Steeled” It… • Steel was king, hence Carnegie was in power • During Lincoln’s days, steel was an expensive, scarce commodity reserved for cutlery and similar products • However, by 1900 America was producing as much steel as Britain and Germany combined, and one-third of the world’s supply • This was due to the Bessemer process—injecting air into molten iron to blow out carbon and other impurities • Also, coal was abundant, yielding much fuel • The fuel and many sources of labor allowed steel factories to thrive