Chapter 14
Industrial growth was focused on the North because resources were plentiful.
The South was trying to recover from the Civil War.
The goal was to replace Britain as the no1 producer.
The factors of production:
Physical capital - stock of tools (machines, structures, equipment)
Human capital - the productive knowledge and skills that workers get through education, training, and experience
Technological knowledge- knowledge about how the world works that is used to produce goods and services
Industrialization freed some factory workers from backbreaking labor and helped improve workers’ standard of living
Oil: Found in Pennsylvania by Edwin Drake | Steel: Stronger but more expensive Bessemer process was cheap and efficient way to produce steel and was widely used (produced 90% of nation’s steel) Used for barbed wire, furnishings, etc Iron: Dense metal, soft and tends to break + rust. More cheap. | Railroads: Influenced industries and businesses in which Americans worked. Different industries grew rapidly as they tried to keep pace with the railroads’ demands for materials and parts Unchecked power led to widespread abuses; populists demanded federal regulation of the industry Made local transit reliable and westward expansion possible for businesses and people When railroad statistics were published, casualties totaled more than 2,000 employees and 20,000 injured Promoted trade and independence |
Corporations:
An organization of multiple owners but treated as a single entity by law
Stockholders: The people who own the corpo. because they own shares of the company (stock)
Able to keep operating costs low and produce goods more cheaply and efficiently than small businesses.
Incorporation laws give corpo.s legal benefits
The railroad, steel, and oil industries were consolidated by industrial capitalists (Cornelius Vanderbilt, Andrew Carnagie, and John D. Rockefeller
Vertical integration - Andrew Carnegie’s method to control the steel industry
Purchased the companies to control all the different businesses he depended on for its operation
Horizontal integration - John D. Rockefeller method to control the oil industry
Combined many firms in the oil industry into one large corpo.
Both methods created monopolies
In factories, employees were worked for over 12h/day, 6d/week, and were not entitled to vacation, sick leave, unemployment compensation, or reimbursement from injuries suffered on the job
Trusts:
Many Americans became suspicious of large corpos and feared monopolies and its power
To prevent horizontal integration, many states made it illegal for one company to own stock in another
Rockefeller’s standard oil formed the first trust, a legal way to merge businesses
Trustees held the stock and the stockholders were entitled to a share of the profits
George M. Pullman: Build a factory that manufactured sleepers and railroad cars
John D. Rockefeller: Led the oil industry with the help of horizontal integration. After Sherman Antitrust Act, made the first business trust
Andrew Carnegie: Made his own fortune (rags to riches), captain of Industry
Relied on vertical integration: bought out suppliers
Horizontal integration: Attempted to buy out competing steel producers
Herbert Spencer: Explained social darwinism
Has justified imperialism, racism, eugenics and social inequality at various times
Used by some economists to justify the doctrine of laissez faire (capitalism/free market)
Credit Mobilier: Construction company was formed with Union Pacific officers, a congressional investigation found that they had taken up to 23 million in stocks, bonds, and cash
Munn v. Illinois: Kept Granger Laws (regulatory laws) and its constitutionality
Laws also help establish that the federal government’s right to regulate private industry to serve the public interest
Interstate Commerce Act: Reestablished the right of the federal government to supervise railroad activities
Interstate Commerce Commission (ICC): First federal regulatory agency
Regulate the railroad industry to ensure fair rates, prevent discrimination, and oversee railroad practices
Advertisements were heavily relied on in the late 1800s
To compete in the new era, bold advertising was used
Costs for advertisements increased to more than $90 Million a year
Craft Union:
| Labor union:
|
Some labor ladders felt that unions should include all laborers in a specific industry
Eugene Debs and some other labor activists turned to socialism in an attempt to solve the problems faced by workers
Socialism: an economic and political system based on government control of business and property and equal distribution of wealth
Haymarket Riot The aftermath of a bombing that took place at a labor demonstration on May 4, 1886, at Haymarket Square in Chicago, Illinois, United States. | Homestead strike Violent labour dispute between the Carnegie Steel Company and many of its workers that occurred in 1892 Andrew Carnegie gave his operations manager, Henry Clay Frick, permission to break the union before this deadline. Frick cut the workers’ wages, which the workers protested by starting the Homestead Strike. | Pullman company strike Caused by George M. Pullman refusal to meet with workers to hear their requests for higher wages, lower rents, and better working conditions | Railroad strike Caused by 10 percent wage cuts, distrust of capitalists and poor working conditions workers conducted numerous railroad strikes that prevented the trains from moving Affected the economy. |
Labor vs. Management:
Prior to the acceptance of labor unions management/the employer had the upper hand. Workers were often at the mercy of their employers
Following the acceptance of labor unions, collective bargaining became a much more organized process
Collective bargaining- the process by which union and company representatives meet to negotiate a new contract
Mediation - A settlement technique in which a neutral mediator meets with each side to try to find a solution both sides will accept
Arbitration- A settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both parties
Tools of management
| Tools of Labor
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Revolutionary inventions:
Thomas Edison: Electrical lightbulb
Alexander Graham Bell: Telephone (communication networks)
Christopher Sholes: Typewriter (office work + new jobs for women)
Sherman Antitrust Act: Made it illegal to form a trust that interfered with free trade between states or with other countries
Its goal was to stop Rockefeller