Industrial Supremacy

Industrial Supremacy

Industry Growth Factors

  • Abundance of Raw Materials: Availability of essential resources such as iron and coal.
  • Increasing Population: Immigration boosts labor supply, providing a workforce for industries.
  • Supportive Policies:
    • High Tariffs: Protect domestic industries from foreign competition.
    • Gold Standard: Stabilizes currency, promotes financial confidence.
    • Laissez-Faire Philosophy: Minimal government intervention in business.
    • Railroad Subsidies: Financial support for railroad construction, enhancing transport efficiency.
  • Efficient Manufacturing:
    • Scientific Management: Optimizing labor productivity.
    • Ford's Assembly Line: Mass production techniques reduce costs and time.
    • Bessemer Process: Innovations in steel production improve quality and reduce costs.

Railroads as a Driving Force

  • Steel Industry:
    • Critical for American industrial growth, predominantly located in western Pennsylvania and eastern Ohio.
    • Railroads emerged to facilitate steel transportation, fueling their own growth.
  • Oil Industry: Directly influenced by the expansion of railroads, driving demand for transport of oil products.

Growth of Corporations

  • Key Figures:
    • John D. Rockefeller: Oil industry magnate, formed Standard Oil.
    • Andrew Carnegie: Dominated steel production via vertical integration.
    • J.P. Morgan: Banker who consolidated steel companies, created U.S. Steel.
    • Vanderbilt: Key player in the railroad industry, varied investments in transport.
  • Wealth Concentration:
    • Over 4 million millionaires by 1892, significant increases in individual net worth (e.g., Rockefeller: $418 billion today).
    • Introduction of corporate structures and trusts to maximize profits.

Integration Strategies

  • Vertical Integration:
    • Strategy employed by Carnegie; control over all stages of production to reduce costs and increase efficiency.
  • Horizontal Integration:
    • Strategy associated with Rockefeller; merging similar firms to reduce competition and increase market share.
  • Modern Examples:
    • Vertical: Amazon, Apple
    • Horizontal: United Airlines, Bank of America

Social Theories Influencing Industry

  • Social Darwinism:
    • Application of natural selection theories to society, justifying wealth disparity.
    • Concept that wealth indicates fitness in navigating capitalist structures.
  • Gospel of Wealth:
    • Essay by Andrew Carnegie advocating for the responsibility of the rich to help the poor.
    • Carnegie gave away significant portions of his wealth, promoting societal betterment.

Labor Responses and Union Growth

  • The Knights of Labor (1869):

    • Founded by Uriah Stevens and known for advocating broader reforms like the 8-hour workday.
    • Membership dwindled after failed strikes due to poor organization and lack of leadership.

  • American Federation of Labor (AFL) (Established in 1886):

    • Led by Samuel Gompers, focused on skilled laborers and immediate issues, such as better wages and working conditions.

  • Prominent Labor Strikes:

    • Homestead Strike: Workers protested wage cuts, leading to violent clashes after management hired the Pinkertons to break the strike.
    • Pullman Strike: Workers struck over high rents in the company town; federal intervention and management repression marked this event.

Societal Alternatives to Capitalism

  • Critiques of Laissez-Faire Capitalism:
    • Thinkers like Lester Frank Ward emphasized human agency and social organization as solutions to inequality.
    • Emergence of socialist movements and parties responding to the excesses of industrial capitalism and advocating for workers' rights.