Chapter 16: The Rise of Big Business

Industrialization Impact (Late 1800s)

Revolutionized economies in Europe and the U.S.
Introduced large-scale commercial agriculture.
Caused mass migration of skilled workers and displaced peasants seeking jobs.
Resulted in a production glut, leading to persistent deflation.

Economic Trends (1869-1900)

Business activity and wholesale prices showed a declining trend despite increasing output.
Workers faced falling wages yet benefitted from cheaper consumer products.
Per capita income rose from $388 (1877) to $573 (1900).

Technological Innovations

Railroads expanded and transformed organizational structure.
Managers focused on distinct executive roles, departmentalization, cost accounting.

Innovators & Enterprises

Gustavus Swift's Assembly Line: Improved productivity in meat-packing and pioneered vertical integration strategies.
John D. Rockefeller's Standard Oil: Leveraged both vertical and horizontal integration to dominate oil refining, employing practices like secret rebates.
Trusts: Legal methods for large corporations to consolidate power and eliminate competition (e.g., Standard Oil Trust).
Vertical Integration: Control of the entire production process.
Horizontal Integration: Merging with competitors to monopolize the market.

Major Figures in Business

Andrew Carnegie: Advocated for wealth distribution and philanthropic responsibility in his "Gospel of Wealth."
John D. Rockefeller: Played a significant role in establishing monopolies through aggressive business strategies.

Legislation and Public Perception

Trusts sparked public concern, leading to regulatory efforts like the Sherman Antitrust Act (1890).

Growth of Consumer Culture

Retail Innovations: Development of large department stores, direct shipping by mail-order services (e.g., Montgomery Ward, Sears).
Advertising: Companies like Macy's altered consumer perceptions, focused on affordability for the masses.
Cultural Shift: Desire for mass consumption, reflecting changes in family structures and societal norms.

Working Conditions and Labor Movement

Manufacturing Environment: Harsh conditions in factories, exploitation of labor, and the emergence of labor organizations.
Labor Strikes & Movements: Impact of labor unrest led to the formation of organizations like the American Federation of Labor (AFL) and the Industrial Workers of the World (IWW).

Urbanization and Its Effects

Shift in Social Dynamics: Emergence of social divides based on class and race.
Neighborhoods: Growth of ethnic communities and the interactions between rural migrants and urban cultures.
City Challenges: Improved public health measures contrasted with overcrowded living conditions in tenements.

Political and Economic Issues

Political Reforms: Increased corruption complaints leading to legislation intended to curb corporate power.
Populist Movement: Emerged from farmers' concerns, calling for economic reforms and challenging the established political system.

Chapter Summary
The late 1800s saw significant economic growth through industrialization, but it also highlighted social inequalities, labor exploitation, and political corruption, spurring movements for change that would continue into the 20th century.