The Rise of Big Business The Industrial Revolution

Robber Barons Robber Barons: a person who has become rich through ruthless and unethical business practices (originally with reference to prominent US businessmen in the late 19th century). The great wealth many railroad entrepreneurs acquired in the late 1800s led to accusations that they built their fortunes by swindling investors and taxpayers, bribing government officials, and cheating on their contracts and debts. By 1900, big business dominated the economy, operating vast complexes of factories, warehouses, offices, and distribution facilities.

Robber Barons vs. Captains of Industry Entrepreneurs who built monopolies that were unfair to consumers Bought out competitors Seen as bad for the economy Captains of Industry: Entrepreneurs that were seen as serving the nation in a positive way Creating jobs Stimulated innovation Were charitable

The Role of Corporations Corporation: an organization owned by many people but treated by law as though it were a single person. Stockholders: people who own the corporation because they own shares of ownership called stock. This raises large amounts of money for big projects while spreading out financial risk.

By the 1830s, states began passing general incorporation laws, allowing companies to become corporations and issue stocks. With money raised from selling stock, corporations would invest in new technologies, hire a large workforce, and purchase many machines. This greatly hurt small businesses with high operating costs—forcing many out of business.

Andrew Carnegie Scottish immigrant who started small and became the owner of a steel company in Pittsburgh. Began vertical integration- owns all of the different businesses on which it depends for its operation. Ex) Instead of buying coal from a company, Carnegie bought the actual coal mine. https://www.history.com/topics/andrew- carnegie/videos/the-men-who-built-america-andrew- carnegie

The Consolidation of Industry Definition: When companies join forces on relatively equal terms to form one new company. This concept spread during the Industrial Revolution Vertical Integration: owns all of the different businesses on which it depends for its operation. Horizontal Integration: combining many firms engaged in the same type of business into one, large corporation. Basically, buying-out other companies so you don’t have that competition.

John D. Rockefeller U.S. industrialist who made a fortune in the oil business. By 1880, Standard Oil controlled almost 90% of the oil refining industry in the U.S. He did this by using means of horizontal integration, or buying out other oil companies. When a single company achieves control of an entire market, this is called a monopoly. https://www.youtube.com/watch?v=PYqrFBm7q dA&t=97s https://www.youtube.com/watch?v=_LC9Dh4kR _g