Chapter 16 Capital and Labor: March of Capital

  • Inustrialization progressed, labor unrest grew, starting with major railroad strikes due to the industry's powerful coordination of capital and government support. Workers faced declining individual significance and worsening conditions, pushing them to organize against capital's dominance.

  • The post-Civil War era saw American industry revolutionized by technological innovations, reducing production and distribution costs. New administrative systems and credit agencies facilitated rapid capital movement and national markets. Scientific management, or Taylorism, introduced by Frederick Taylor, aimed to enhance efficiency by subdividing tasks, leading to mass production advances in firms like Singer and McCormick.

  • By the early 20th century, American industry surpassed Britain, Germany, and France, becoming the world's leading manufacturing power. Companies benefited from economies of scale and sought new markets to sustain high production volumes. The legal structure of corporations allowed for significant capital mobilization with limited risk to shareholders.

  • However, competition threatened profits, leading firms to form pools, trusts, and mergers to avoid market instability. The "great merger movement" (1895-1904) saw thousands of companies consolidate, creating monopolies. By 1901, J.P. Morgan's formation of United States Steel exemplified this trend, marking the rise of monopoly in American industry.

    • Industrialization accompanied with long hours, dangerous working conditions, and the difficulty of supporting a family on low wages compelled armies of labor to organize and battle against the power of capital

    • Taylorism introduced a new way of efficiency by subdividing tasks through scientific organization

    • Taylorism increased the scale and scope of manufacturing and mass production

    • Henry Ford made the assembly line famous, allowing the production of cars to skyrocket

    • Cyrus McCormick realized the bigger the production, the bigger the profits

    • Between 1895 and 1904, a wave of mergers occurs (20 % of American companies), resulting in competition dissolved in what is known as “the great merger movement.”