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The Growth of Big Business

The Rise of Big Business. The Growth of Big Business. The Rise of Big Business. Warm Up. Imagine you are Bill Gates – What would you do with your money? Write it down on a separate sheet of paper. Read the “Gospel of Wealth” and answer the 3 questions.

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The Growth of Big Business

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  1. The Rise of Big Business The Growth of Big Business

  2. The Rise of Big Business Warm Up • Imagine you are Bill Gates – What would you do with your money? Write it down on a separate sheet of paper. • Read the “Gospel of Wealth” and answer the 3 questions. • Compare your response to question 1 and question 2. Would Carnegie approve of your decisions??? Why or why not.

  3. Robber Baron or Captains of Industry Robber Baron 1: an American capitalist of the latter part of the 19th century who became wealthy through exploitation (as of natural resources, governmental influence, or low wage scales) 2: a business owner or executive who acquires wealth through ethically questionable tactics Captain of Industry : the head of a great industrial enterprise

  4. The Rise of Big Business Robber Barons or Captains of Industry • Robber Barons – negative view of big business • As cruel and ruthless • Would stop at nothing to achieve great wealth

  5. The Rise of Big Business Robber Barons or Captains of Industry • Captain of Industry – view that the same men were ingenious and industrial leaders • Transformed the American economy • Praised for their charity

  6. The Rise of Big Business

  7. The Rise of Big Business Social Darwinism • Origins of Species 1859 • Charles Darwin • All animal life had evolved by a process of Natural Selection • Only the strong survive to reproduce

  8. The Rise of Big Business Social Darwinism • Free Competition in the economy, like natural selection, would ensure survival of the fittest • Society should do as little as possible to interfere with people’s pursuit of success

  9. The Rise of Big Business Robber Barons or Captains of Industry • Andrew Carnegie • Gospel of Wealth – people should be free to make as much money as they can. However, after they make it, they should give it away

  10. The Rise of Big Business Carnegie Steel • Arrive in American as a penniless Scottish immigrant • Began to work to assist his family • 1865 Andrew Carnegie was making $50,000

  11. The Rise of Big Business Carnegie Steel • Entered steel business • Stole Bessemer Process from Brits • 1889 Established Carnegie Steel Company • Controlled suppliers and competition • 1899 Carnegie Steel produced more than Great Britain • Carnegie Steel produced 80% of nation’s steel

  12. The Rise of Big Business Robber Barons or Captains of Industry • Carnegie once stated, “I entered this life poor and I wish to leave it the same.” • Gave away $325 million = 90% of his wealth • Carnegie Hall in NY City • Carnegie Foundation • 3,000 libraries across the US

  13. The Rise of Big Business Vertical Integration • Controlling all steps to change raw materials into finished products

  14. The Rise of Big Business Vertical Integration • Own iron and coal mines • Bought railroads, trucking and shipping lines • Bought warehouses

  15. The Rise of Big Business Horizontal Consolidation • Buy out competitors • Companies making similar products merge

  16. The Rise of Big Business Growth and Consolidation • Monopoly- complete control over production, quality, wages, and prices

  17. The Rise of Big Business Holding Company • J.P. Morgan very successful banker • Bought Carnegie Steel in 1901 for $500 million • Changed name to US Steel • Became the largest business organization

  18. The Rise of Big Business Standard Oil Trust • Established by John D. Rockefeller • Was able to undersell his competitors by charging less • Purchased oil refineries and created horizontal consolidation

  19. The Rise of Big Business Standard Oil Trust • Drove competitors out of business by selling oil lower than cost to make it • After competitor are driven out • prices skyrocketed to recoup loss

  20. The Rise of Big Business John D. Rockefeller • Rockefeller gave away $500 million • Founded the University of Chicago which found cure for yellow fever • Land for United Nations

  21. The Rise of Big Business Standard Oil Trust • Rockefeller was so successful at his death his personal fortune was estimated at • $815,647,796

  22. The Rise of Big Business The Government Response • 1890 Sherman Antitrust Act • Outlawed any combination of companies that restrained interstate trade • Was not effective against trusts • Pro business courts had to interpret law

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