Big Business & Labor Ch 6.3

Social Darwinism From Darwin’s theory Formed by William Sumner & Herbert Spencer Principles of Social Darwinism 1)Natural selection weeded out less-suited individuals 2)“laissez faire”  to do nothing Success and failure were governed by natural law- Government should not interfere with business. The strongest will survive. Rich were in God’s favor, poor lazy or inferior

Robber Barons Mergers - Companies begin to buy out competitors - achieve monopolies (JP Morgan and United States Steel) Others set up trusts  A trust is when competing companies enter into a type of merger that has them turn stock over to a group of trustees who then run the separate companies as one large corporation. In return the companies received dividends from the profits made by the trust Anti-industrialists called them robber barons (big profits – ruthless control of markets)

Andrew Carnegie Scottish immigrant – Rags to Riches One of first industrial moguls Began Carnegie Steel Company New Business Strategies 1)Make new products better and cheaper using new machinery and techniques 2)Attracted talented people by offering shares of his company. 3)Used horizontal and vertical integration –vertical integration  bought out suppliers to control raw materials and transportation. –horizontal integration  buy out competitors

John D. Rockefeller John D. Rockefeller used a trust to get total control of Oil industry (Standard Oil Company) Rockefeller used low prices to drive out competitors and then with control of market raised prices above original levels.  Many industrialists like Rockefeller and Carnegie become philanthropists

Sherman Antitrust Act (1890) Formed to stop trusts from interfering with free trade between states or other countries. Made it illegal to form trusts Not effective /prosecution hard. Didn’t define trust

Labor Unions Workers begin organizing against poor workering conditions Reasons to organize 1) Long hours – 7 day workweek, 12 or more hours per day 2) No vacation, compensation, or sick leave 3) Injuries on the job, child labor National Labor Union and Knights of Labor some of first unions

Craft Unionism Samuel Gompers – American Federation of Labor Collective bargaining- negotiations between labor and management for wages, hours, and conditions Used strikes as a major tactic

Industrial Unionism Eugene V. Debs – include all – skilled and unskilled Socialism – government control of business and property, equal distribution of wealth (Karl Marx) Extreme form = Communism – overthrow capitalist Industrial Workers of the World (I.W.W) or Wobblies. - Welcomed minorities

Strikes Turn Violent Strike of 1877 – B&O railroad - stopped railroad traffic. Only ended after President Hayes intervenes sending in Federal troops to break strike Haymarket – Chicago - protest turns violent, bomb thrown into crowd, people turn against labor movement Homestead Strike – 1892 – Pinkerton Detectives hires to protect “scabs”, several killed in clash 1894 President Cleveland forced to send in federal troops to break Pullman strike. Strikers fired and blacklisted

Haymarket Strike

Women Mary Harris “Mother” Jones - Helped pass child labor laws Fire at Triangle Shirtwaist Factory forces public to look at working conditions for women  146 women died after company had locked doors to prevent theft –Factory owners not convicted of manslaughter. Public outraged.