Section 3 Big Business and Labor

Carnegie Innovates By 1899, Carnegie Steel Company produces more steel than all the factories in Great Britain combined. Why? How? Business Strategies New machinery, techniques, accounting Encouraged competition, attracted talent by offering stock Vertical integration – bought out his suppliers in order to control the raw materials and transportation systems Horizontal integration – companies producing similar products merge

Social Darwinism and Business Social Darwinism – philosopher Herbert Spencer applies Darwin’s theory of evolution to human society. Consequently, The government should not interfere in business. Doctrine of Laissez faire Ultimately, the poor must be lazy or inferior people who deserved their place in the lower class

“a man who dies rich, dies disgraced” The Gospel of Wealth 1899 What are the ways to use wealth??? Donated over $100 million to Carnegie Corporation $20 million to colleges Created science research institute $60 million to build over 3,000 libraries

Growth and Consolidation Fewer Control More Growth and Consolidation Monopoly – complete control over an industry’s production, wages, and prices Standard Oil Company led by John D. Rockefeller- joined with competing companies in trust agreements

“Robber Barons” Rockefeller controlled 90% of oil refineries Paid employees low wages Sold oil at a loss to drive out the competition However, Rockefeller also Gave away over $500 million  an American capitalist of the latter part of the 19th century who became wealthy through exploitation (as of natural resources, governmental influence, or low wage scales) 

Sherman Antitrust Act Illegal to form a trust that interfered with free trade between states or with other countries Eventually the Supreme Court ruled that Standard Oil was an illegal monopoly and it broke into several different companies