Presentation on theme: "The Great Industrialists and their Tactics. Andrew Carnegie Scottish immigrant-”rags to riches” story became a giant in the steel industry 1873-"— Presentation transcript:
Andrew Carnegie Scottish immigrant-”rags to riches” story became a giant in the steel industry 1873- built massive steel plant in Pittsburgh, PA to produce railroad tracks used Bessemer converter to make steel efficiently and cheaply #1 steel producer in the world- owned 80% of the steel market donated $400 million to worthy causes; gave away 90% of his wealth
John D. Rockefeller Started Standard oil company-today called Chevron used ruthless tactics to beat his competition controlled 90% of the oil industry paid extremely low wages to his employees gave away millions of $, but kept most for himself
Cornelius Vanderbilt American entrepreneur who built his wealth in shipping and railroads By age 16 he was operating his own ferrying business between Staten Island and Manhattan Ruthless in business, very few friends; perceived as vulgar, mean-spirited, made life miserable for those around him, including his family Died at 82 with a fortune of more than $100 million Nicknamed the “The Commodore” Vanderbilt University, Breakers mansion in Newport, RI
Trusts and Monopolies entrepreneurs controlled competition by forming a monopoly; bought out competitors or drove them out of business trusts were another type of monopoly Rockefeller created the Standard Oil trust to almost completely control the oil industry. To fight the “robber barons”, Congress passed the 1890 Sherman Antitrust Act, making it illegal to form monopolies and trusts.
Business Tactics Vertical Integration- buying up all phases of production such as raw materials and distribution. Horizontal Integration- buying up all similar industries Social Darwinism- only the best run businesses will survive. Encouraged competition, hard work, and responsibility Laissez-faire- US government should not interfere with the economy. “Hands off!”
In Vertical Integration the Company Owns the Whole Production Process Andrew Carnegie owned the coalfields that supplied coal to his steel mills Carnegie owned the iron mines that supplied the iron ore for his Bessemer converters Carnegie owned the railroad tracks and railroad trains that brought raw materials in and finished steel out Carnegie controlled “top to bottom”, or vertically, all the parts of the process needed to make steel Can you think of an example of Vertical Integration in today’s economy?
What is Horizontal Integration? If Coca Cola buys Pepsi If McDonalds buys Burger King If Starbucks buys Dunkin Donuts If ATT buys Verizon If Toyota buys Honda What happened to the competition?
Robber Baron A business leader who used unfair practices and had little sensitivity for the common worker provided unsafe and unsanitary working conditions low wages and long hours used violence against workers selfishly kept their wealth controlled and bought out competition What can be done to slow down the Robber Barons? The Unions!