Capitalism “willingness to risk money on new businesses”. Everything is privately owned factories, equipment, etc. In the late 1800’s, private people built railroads and factories, in hopes of getting rich!! Example: Thomas Edison borrowed $150,000 to light up cities with electric lights ( an new risky idea). Inventors protected their ideas with patents.
Rock oil provides new fuel. Edwin Drake oil Titusville, PA. (1859) oil was cheap to get therefore cheap to buy
Quiz Wednesday over: 2 pts per BIG Topic Capitalism Communication & Transportation Rock Oil Bessemer Process Electricity 1 point for ONE evidence to support BIG Topic AND its connection to growth of Industry.
The Bessemer process revolutionizes steelmaking new process forcing air purify the steel made it stronger. Stronger steel BIGGER/TALLER everything that was made from steel!!! Pittsburgh became the steelmaking capital of the world. First “skyscraper” was built in Chicago.
Electricity Lights up America!! Thomas Edison light bulb generating station goal: light up Manhattan! Demand G R E W more companies begin to pop up to meet those demands. Impact of electricity: Businesses stayed open longer. Families could work and read at night. New appliances were developed (refrig., toaster, etc.) Those in the country (“rural”) had to wait decades to get elec. The End! (of section 2!)
1. New ways to manage work. Factories interchangeable parts more quantity!! Specialized machinery no need for “skilled” workers!
Workers performed single task all day long. Efficient, but B O R I N G!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Speed boosted productivity.
Book The Principles of Scientific Management most efficient way of running a factory. Henry Ford read this book used assembly line to mass produce cars. One every 3 minutes!!!! Many workers felt as if they were a piece of machinery themselves.
Increased productivity had two results: Goods were cheaper (positive). Needed less workers (negative). Meet YOUR future!!!
New Ways to Finance and Organize Businesses. The three factors of production: 1. land 2. labor 3. capital any asset that can produce income. Land was cheap, labor was plentiful, but capital was limited!
Owners “corporations” (definition) a company that’s recognized independently from its owners. (ex.: Perry Motorcars, LLC) A corp. can now sell “stocks” in order to raise $$$ (capital). Stocks are bought and sold by the public for $$$ 10 cents then (1969), $73.49 now!!
Owners also tried to get rid of competition by: Monopolies Think about this: what’s the object of the playing the game Monopoly???
Laissez-faire This French word means “hands off”. (example: Most motorcycle riders in Ohio are glad that the Ohio legislature is laissez-faire concerning the wearing of helmets.) In the late 1800’s, we see that the government has decided to keep it’s “hands off” trying to control business.
Owners tried to drive out their competitors by: (you have to know the difference between these two) Horizontal integration: HISHIS
Trust: Where one person holds the title of property/business for many owners of separate businesses/companies. ( in other words, you trust another person to hold the title to your business ) The goal of the trust is the same as the monopoly, to drive others out of business.
In reality govt. WASN’T 100% “hands off”! Gave lots of “free” land to RR’s. Sold ‘natural resources’ cheaply to friends of politicians. Small businessmen ask govt. to help curb trusts/monop’s. hard to compete against. Govt. responded Sherman Antitrust Act outlawed trusts, monop’s, other forms of business that “restricted trade”.
Section 5: The Gilded Age What is “gild”? Something that ‘looks’ like gold on the outside, but isn’t. So, think about this: this is a time where politics/life looks “golden”, but is really crappy!!
Many famous business owners started out as: Entrepreneurs bold risk-takers who est. new businesses. These men made millions but what about the avg. worker???? See why this is called the “gilded age”? Entrepreneurs got really rich (gold), but those who worked for them got little (cheap metal).
The dining room in ONE of the Vanderbilt residences.
Some wealthy business became philanthropists: A person who gives away their money for worthy causes. Carnegie est. Univ. of Chicago (a leading business school). Vanderbilt est. Vanderbilt Univ. Rockefeller built over 2,500 public libraries.
So…. The big question is: Were these wealthy industrialists robber barons (people who stole from the poor and lived a lordly life) or captains of industry (people who used their wealth to help those less fortunate) ???????