Big Business

A Change in Values The Old : handmade goods, self-sufficiency, rural population, family is very important. The New: machine-made goods, inter- dependency (division of labor), urban population, family is less important New values: speed, convenience, power, profit

Free Enterprise Capitalism – Economic system where private businesses run most industries. Free enterprise – a business that is free from government involvement Entrepreneurs – people who start a new business – Proprietorship – One owner – Partnership – Two or more owners – Corporation – Many owners

The Cycle of Industry DEMAND IDEA PRODUCTION MARKETING CONSUMPTION

Reasons for the rise of heavy industry 1. Natural Resources 2. Inventions 3. Investors (Entrepreneurs) 4. Large labor force

What allowed these four factors to bring about HUGE profits? 1. New Sources of Power – (steam, coal, oil, electricity, solar, nuclear, ?) 2. Transportation improvements (railroad, automobile, planes/jets, rockets..) 3. Improved Communications (telegraph, telephone, radio, television,...)

Social Darwinism and Philantrhopy Laissez Faire Capitalism  Hands off economic system. Necessary limits are still implemented – Child labor laws, minimum wage, safe working conditions, environmental laws Survival of the fittest  We know what Darwins theory of survival of the fittest looked like, how does it pertain to businesses? – What did animals do to survive in their environment?

Pittsburgh at night

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The Anti – Trust Movement As corporations grew stronger, some used their power to drive smaller competitors out of business. – How might a big company be able to do this? Monopolies 1890 – Sherman Antitrust Act is passed  Any attempt to monopolize… any part of the trade or commerce among the several states was a crime.

Self made millionaires

Cornelius Vanderbilt 1. Nicknamed “The Colossus of Roads” 2. The first millionaire 3. Established a railroad monopoly in New York 4. Was worth $150,000,000 when he died in 1877

Tell a person of the opposite sex What characteristics do you think are necessary to make someone a self- made millionaire?

Andrew Carnegie Age 12 – earned $1.20 per week as a bobbin boy Won a job as a telegrapher; stayed up at night memorizing morse code Invested in capital, little bits at a time ex. “Sleeping cars” Gained a monopoly in the steel industry: – Vertical Integration Remembered for his “Rags-to-Riches” career Was worth $300,000,000 (today 189 Billion) when he sold Carnegie Steel to J.P. Morgan in 1901 Was a philanthropist – (Greek) “lover of mankind” ex. Founded 3,000 libraries, several colleges, concert halls Famous quotations – “Put all your eggs in one basket.” – “He who dies wealthy, dies disgraced.”

John D. Rockefeller Organized an oil monopoly in Ohio; spread to entire East Coast Remembered for his fierce competitiveness: “Oil Wars” – was hated by the public and the media was worth 1 billion by 1892; also a philanthropist – First billionaire! showed what cost-cutting can do ex. sealing oil drums Used horizontal integration “God gave me my money.”

organ

JP Morgan 1. American banker and financier 2. twice “bailed out” the government 3. Advisor to President Cleveland 4. Consolidated companies ex. International Harvester, General Electric, U.S. Steel 5. Possessed an incredible knack for investing in lucrative ventures

Top 10 Corporations in America Today ne500/2012/full_list/