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Big Business

Big Business. A Change in Values. The Old : handmade goods, self-sufficiency, rural population, family is very important. The New : machine-made goods, inter-dependency (division of labor), urban population, family is less important. New values : speed, convenience, power, profit.

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Big Business

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  1. Big Business

  2. A Change in Values • The Old : handmade goods, self-sufficiency, rural population, family is very important. • The New: machine-made goods, inter-dependency (division of labor), urban population, family is less important New values: speed, convenience, power, profit

  3. Free Enterprise • Capitalism – Economic system where private businesses run most industries. • Free enterprise – a business that is free from government involvement • Entrepreneurs – people who start a new business • Proprietorship – One owner • Partnership – Two or more owners • Corporation – Many owners

  4. The Cycle of Industry DEMAND IDEA CONSUMPTION MARKETING PRODUCTION

  5. Reasons for the rise of heavy industry • 1. Natural Resources • 2. Inventions • 3. Investors (Entrepreneurs) • 4. Large labor force

  6. What allowed these four factors to bring about HUGE profits? • 1. New Sources of Power • (steam, coal, oil, electricity, solar, nuclear, ?) • 2. Transportation improvements (railroad, automobile, planes/jets, rockets . .) • 3. Improved Communications (telegraph, telephone, radio, television, . . .)

  7. Social Darwinism and Philantrhopy • Laissez Faire Capitalism  Hands off economic system. • Necessary limits are still implemented • Child labor laws, minimum wage, safe working conditions, environmental laws • Survival of the fittest  We know what Darwins theory of survival of the fittest looked like, how does it pertain to businesses? • What did animals do to survive in their environment?

  8. Pittsburgh at night

  9. http://sayiamgreen.com/blog/2009/09/the-10-most-polluted-cities-in-the-world/http://sayiamgreen.com/blog/2009/09/the-10-most-polluted-cities-in-the-world/

  10. The Anti – Trust Movement • As corporations grew stronger, some used their power to drive smaller competitors out of business. • How might a big company be able to do this? • Monopolies • 1890 – Sherman Antitrust Act is passed  Any attempt to monopolize… any part of the trade or commerce among the several states was a crime.

  11. Self made millionaires

  12. Cornelius Vanderbilt • 1. Nicknamed “The Colossus of Roads” • 2. The first millionaire • 3. Established a railroad monopoly in New York • 4. Was worth $150,000,000 when he died in 1877

  13. Tell a person of the opposite sex What characteristics do you think are necessary to make someone a self-made millionaire?

  14. Andrew Carnegie • Age 12 – earned $1.20 per week as a bobbin boy • Won a job as a telegrapher; stayed up at night memorizing morse code • Invested in capital, little bits at a time ex. “Sleeping cars” • Gained a monopoly in the steel industry: • Vertical Integration • Remembered for his “Rags-to-Riches” career • Was worth $300,000,000 (today 189 Billion) when he sold Carnegie Steel to J.P. Morgan in 1901 • Was a philanthropist – (Greek) “lover of mankind” ex. Founded 3,000 libraries, several colleges, concert halls • Famous quotations • “Put all your eggs in one basket.” • “He who dies wealthy, dies disgraced.”

  15. John D. Rockefeller • Organized an oil monopoly in Ohio; spread to entire East Coast • Remembered for his fierce competitiveness: “Oil Wars” • was hated by the public and the media • was worth 1 billion by 1892; also a philanthropist • First billionaire! • showed what cost-cutting can do ex. sealing oil drums • Used horizontal integration • “God gave me my money.”

  16. http://www.jpmorgan.com/pages/jpmorgan

  17. JP Morgan • 1. American banker and financier • 2. twice “bailed out” the government • 3. Advisor to President Cleveland • 4. Consolidated companies ex. International Harvester, General Electric, U.S. Steel • 5. Possessed an incredible knack for investing in lucrative ventures

  18. Top 10 Corporations in America Today http://money.cnn.com/magazines/fortune/fortune500/2012/full_list/

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