The Rise of Industrial Capitalism in America

Industrialism in America

• Industrialism signifies a transformation in manufacturing, shifting towards mass production and consumption.
• This era in American history is termed the Gilded Age, implying a golden exterior that concealed underlying issues.

The Rise of Corporations and Trusts

• During the Gilded Age (late 1800s), the dominance of large corporations and trusts led to the decline of small, local businesses.
• Key industries affected: Railroad, steel, and oil.

Oil Industry

• John D. Rockefeller (Standard Oil) was a prominent figure.

• Rockefeller strategically acquired competitors, leading to Standard Oil controlling almost 90% of the oil industry by the late 1880s.

• This was achieved through horizontal integration.

  • Horizontal Integration: One company eliminates competition by acquiring competitors.

Steel Industry

• Andrew Carnegie dominated the steel industry.

• Carnegie utilized vertical integration to consolidate his interests.

  • Vertical Integration: A company acquires supporting industries (e.g., from mining to processing to distribution).

The Drive for Empire

• Powerful industries sought to expand beyond the U.S. to control foreign markets and resources.
• They aimed to acquire new markets for selling goods and securing natural resources in regions like the Pacific Rim, Asia, and Latin America.

Factors Contributing to the Growth of Wealth

• Several factors enabled individuals like Rockefeller and Carnegie to accumulate vast wealth during this period:

  • Laissez-faire government policies: Minimal government intervention or regulation in business practices.

  • Underpaid Laborers: Reliance on a large pool of underpaid workers, including immigrants, women, and children.

  • Social Darwinism: Application of Social Darwinism to economics, suggesting that strong companies should overtake weaker ones.

    • Social Darwinism: An idea that strong companies should eat weaker companies.

The Gospel of Wealth

• Carnegie attempted to counter these harsh practices through the Gospel of Wealth.

  • Gospel of Wealth: Wealthy individuals have a divine duty to invest their wealth back into society through philanthropy.
  • Carnegie donated 350 million to establish libraries, concert halls, and universities.

Captains of Industry or Robber Barons?

• Figures like Carnegie, Rockefeller, Collins Huntington, and Mark Hanna are viewed differently, either as captains of industry or robber barons, depending on perspectives regarding their impact on American society.