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.