Big Business

A. How to divide the money 1.Capitalism – Private business runs most of the industries and competition sets the prices. 2.Socialism – The government plays a big part in running industries and setting prices. 3.Communism – All people own businesses together and all share in their profits. There is no government at all.

B. Ideas that lead to Big Business 1.Free Markets – US is a Capitalist system – Government and business leaders believe in laissez-faire capitalism. – Laissez-Faire means “to let do” in French. – Governments would not regulate business but let it control itself.

2.Social Darwinism – Capitalism created inequalities among citizens – Rich people and poor people – Some believed this was part of the natural order. – Adapted Darwin’s beliefs of survival of the fittest to society – Strong businesses, governments, and people would survive while weak ones failed

C. Corporations 1. What is a Corporation – A corporation is a business that has legal status just like it was a person – It is owned by stock holders, people who buy parts of the business – Decisions are made by a board of directors 2.Why have Corporations – Can raise lots of money by selling stock – Limited risk, investors can only lose as much as they invest

D. Industrial Tycoons 1.Rockefeller and Oil – John D. Rockefeller start Standard Oil (a refinery) – Wanted to grow his business – Took over companies that supplied him with things – Took over other oil companies – By 1897 Standard Oil refined 90% of all US oil

2.Carnegie and Steel – Andrew Carnegie started a steel company – Bought out companies that supplied him to expand his business – He sold Carnegie Steel for $480 million in 1901 – Gave away about $350 million mostly to promote education

3.Views on the Tycoons – Two Ways to view them – Robber Barons: Got their wealth buy squeezing out competition and stepping on the little guy – Captains of Industry: made the American Economy more productive and stronger