Presentation on theme: "Big Business Emerges!! ! Laissez Faire Economics HANDS OFF The idea that the government should leave business alone. The Strong will survive the weak."— Presentation transcript:
VERTICAL INTEGRATION When a company buys each stage of the production process. This –Lowers production costs –Gives a company control over the process –Improves quality –Improves availability –But… limits competition.
Ore company Shipping company Rail Lines Rail cars Steel mills $5 Y Ore company Y Rail cars Y Rail Company Y Shipping Company Y Steel Mills $2 Total Additional Cost $25 Cost Reduced To $10
Horizontal Integration When companies making similar products merge in order to have more control over the market. Results- –Lowers costs by eliminating competition. –Keeps control of prices in the hands of a few men. –Price fixing –(Laws of Supply and Demand)
Company A Company B Company C Competition keeps prices low Removing competition allows companies to increase profits by raising prices. Trust/ Holding Company
Who did it? John D. Rockefeller 1870- Standard Oil was –23% of US Oil processing. –1890- 90% Created TRUSTS.
3 Really Important Ideas The Law of Supply and Demand Social Darwinism Laissez Faire Economics
The Law of Supply and Demand If demand is low the price is… Low. If demand is high the price is… High. If supply is low the price is… High If supply is high the price is… Low.
The Gospel of Wealth "The Gospel of Wealth" was an essay written by industrialist Andrew Carnegie in 1889. Carnegie professed the virtues of a Laissez-faire system in which the government did not interfere with a corporation's right to do as it pleased. Carnegie made it clear that the wealthy were responsible for the recirculation of their money back into society where it could be used to support the greater good. Carnegie himself practiced this procedure, and in his later years gave money to establish public libraries, schools and swimming pools. Andrew Carnegie1889 Laissez-faire
Social Darwinism A perversion of Charles Darwins On the Origin of Species His ideas were applied to business. (It wasnt what he had in mind.) 2 key ideas –Survival of the fittest –Natural Selection
Darwin on Breeding Animals. Darwin on Breeding Animals. Thus the weak members of civilized societies propagate their kind. No one who has attended to the breeding of domestic animals will doubt that this must be highly injurious to the race of man. It is surprising how soon a want of care, or care wrongly directed, leads to the degeneration of a domestic race; but excepting in the case of man himself, hardly any one is so ignorant as to allow his worst animals to breed.
Social Darwinism extends Darwin into a realm Darwin never intended = a competitive struggle where only those with the strongest moral character should survive, or else the society would weaken. It was Spencer, not Darwin, who coined the phrase "survival of the fittest. Social Darwinism thereby offered a perfect moral justification for Americas Gilded Age – Robber Barons 1.controlled much of American industry 2. the gap between rich and poor widened even greater 3. urban slums festered, and politicians were bought off by the wealthy. AND - It allowed men like John D. Rockefeller to claim that the fortune he accumulated through the giant Standard Oil Trust was "merely a survival of the fittest,... the working out of a law of nature and a law of God."
In its most extreme forms, Social Darwinism was used to justify eugenics programs – the weeding out of "undesirable" genes from the population; which inspired sterilization laws directed against "unfit" individuals. Between1910-1930, 24 states passed sterilization laws and Congress passed a law restricting immigration from certain areas deemed to be unfit. Social Darwinism i, though in different form, was also applied by the Nazi party in Germany to justify their eugenics programs. Social Darwinism - justified 1.the more exploitative forms of capitalism in which workers were paid sometimes pennies a day for long hours of backbreaking labor. 2. big business' refusal to acknowledge labor unions and similar organizations, and 3. implied that the rich need not donate money to the poor or less fortunate, since such people were less fit anyway.
Horatio Alger – a partial list Abraham Lincoln: the Backwoods Boy; or, How A Young Rail-Splitter Became PresidentHow A Young Rail-Splitter Became President (1883) Adrift in New York; or, Tom and Florence Braving the Worldthe World (1904) Adrift in the City; or, Oliver Conrad's Plucky Fight (1902)Adrift in the City; or, Oliver Conrad's Plucky Fight Andy Gordon; or, The Fortunes of a Young Janitor (1909)Andy Gordon; or, The Fortunes of a Young Janitor Andy Grant's Pluck (1902)Andy Grant's Pluck Ben Bruce. Scenes in the Life of a Bowery Newsboy (1901)Ben Bruce. Scenes in the Life of a Bowery Newsboy Ben Logan's Triumph; or, The Boys of Boxwood Academy (1908)Ben Logan's Triumph; or, The Boys of Boxwood Academy Ben's Nugget; or, A Boy's Search for Fortune (1882)Ben's Nugget; or, A Boy's Search for Fortune Ben The Luggage Boy; or, Among the Wharves (1870)Ben The Luggage Boy; or, Among the Wharves Bernard Brooks' Adventures. The Story of a Brave Boy's Trials (1903)Bernard Brooks' Adventures. The Story of a Brave Boy's Trials Bertha's Christmas Vision. An Autumn Sheaf (1856)Bertha's Christmas Vision. An Autumn Sheaf Bob Burton; or, The Young Ranchman of the Missouri (1888)Bob Burton; or, The Young Ranchman of the Missouri Bound to Rise; or, Up the Ladder (1873)Bound to Rise; or, Up the Ladder A Boy's Fortune; or, The Strange Adventures of Ben Baker (1898)A Boy's Fortune; or, The Strange Adventures of Ben Baker Brave and Bold; or, The Fortunes of Robert Rushton (1874)Brave and Bold; or, The Fortunes of Robert Rushton The Cash Boy (1887The Cash Boy
One day a handsome carriage drove up to the door. From it descended our hero, elegantly attired. He knocked at the door. Mrs. Chase, who was impressed by wealth, came to the door in a flutter of respect, induced by the handsome carriage. ``What do you wish, sir?'' she asked, not recognizing Frank. ``Miss Grace Fowler!'' repeated Mrs. Chase, almost paralyzed at Grace being called for by such stylish acquaintances ``Yes, my sister Grace.'' ``What! are you Frank Fowler?'' ``Yes. I have come to take Grace away.'' ``I don't know as I have the right to let her go,'' said Mrs. Chase, cautiously, regretting that Grace was likely to escape her clutches. ``Here is an order from Deacon Pinkerton, chairman of the overseers of the poor.'' ``That is sufficient. She can go. You look as if you had prospered in the city,'' she added, with curiosity. ``Yes. I have found my grandfather, who is very wealthy.'' ``You don't say!'' exclaimed Mrs. Chase. ``I'll tell Grace at once.''
Grace at work in the kitchen had not heard of the arrival. What was her surprise when Mrs. Chase, entering the room, said, graciously: ``Go up at once, Grace, and change your clothes. Your brother has come for you. He is going to take you away.'' Grace almost gasped for breath. ``Is it true?'' ``It is indeed. Your brother looks remarkably well. He is rich. He has found a rich grandfather, and has come for you in a carriage.'' In amazed bewilderment Grace went upstairs and put on her best dress, poor enough in comparison with her brother's clothes, and was soon happy in his embrace. ``I am glad to see you, my dear child,'' said Mr. Wharton, who had accompanied Frank. ``Will you come to the city and live with me and your brother?'' ``Oh, sir, I shall be glad to be wherever Frank is.'' ``Good-bye, my dear child,'' sand Mrs. Chase, whose feelings were very much changed, now that Grace was a rich young lady. ``Come and see me some time.'' ``Thank you, Mrs. Chase. Good-bye!'' The carriage rolled on.
A few words only remain. Our hero was placed at a classical school, and in due time entered college, where he acquitted himself with distinction. He is now making a tour of Europe. Grace was also placed at an excellent school, and has developed into a handsome and accomplished young lady.