Industrialization

HIST 202: Lecture #4: Industrialization, Big Business, and the World Market

I.                    What is Big Business? – Characteristics of Corporate America

Progressive School

Industrial Statesman or Consensus School

a.  Characteristics of Big Business:

1.  Corporations

2.  Fixed Capital, Operating Capital, and Economies of Scale

3.  Creation of largeness and anonymity in society

4.  Nature of ownership changes – personal to impersonal

5.  Geographic scale

6.  Degree of specialization

7.  Performance of range of functions

8.  Corporation leaders as new celebrities

9.  Division of labor: e.g. (for example), Frederick Taylor---The Principles of Scientific Management---Taylorism

II.                 The appearance and Spread of Big Business (BB)

a.  Beginnings – the Railroad (RR)

Cartels

Interstate Commerce Act (1887) ---creates the Interstate Commerce Commission

California Supreme Court rulings in1882 & 1884: overtly acknowledge that corporations as individuals, with the rights of a citizenship

b.  Vertical and Horizontal Growth

Gustavus Swift & Company

Andrew Carnegie – U. S. Steel and the “Gospel of Wealth”

Horizontal Integration

Trusts

John D. Rockefeller, Standard Oil Company – National Refiners Association

Captain of Industry or Robber Baron?

American Tobacco Company---Duke Family

III.               The Great Merger Wave, 1895-1905

Sherman Anti-Trust Act (2 July 1890)

Theodore Roosevelt – trustbuster?

J. P. Morgan’s Northern Securities Company (RR monopoly)

IV.               The World Market

American BB and the World:

1880 U.S. 14.7% percent of world manufacturing output - 1900, 23.6 % - 1913, >32%

1880 GB 22%    “                                                           “  -     “       18.5%  -  “     13.6%

1880 Ger.  8.5%  “                                                           “ –      “       13.2%  -  “         14.8%

1890 US iron-steel production exceeds all major European powers---by 1910 far exceeds ALL of Europe combined

1890 US energy consumption (metric tons of coal use) same as Britain---by 1900 double British consumption---by 1910 nearly double ALL of Europe

What is the only area that the US lags behind Europe in?

V.                 Big Business: Legacy and Effects  

a.      Beneficial Side

First, BB stimulated inventions: e.g., Christopher Sholes (typewriter), Alexander Graham Bell (telephone), Thomas Alva Edison

Secondly, Andrew Cargnegie’s “Gospel of Wealth” gave rise to the ideal that BB should contribute to society as public benefactors

Thirdly, created financial wizards like J. P. Morgan

Finally, BB still exists and is a defining feature of present-day American society and global society  

b.  Negative Side:

First - Trusts and BB signified the end of competition in some ways.

Second – was the impact on workers: workers suffered from Impersonal management, alienation of labor, artificially high prices, poor working conditions, and the erosion of traditional working conditions

The Next Lecture: we will look at workers and consumers response to the New Industrial techniques and their new existence in America