1. Big business

2. Quick Check #1
What/when was the 2nd industrial revolution? A period of great growth in the late 1800s with the US becoming the leading industrial power

3. Quick Check #2
What was steel used for to revolutionize the US? Railroads, bridges, machinery, and skyscrapers

4. What is a patent? Legal rights to make or sell an invention
Quick Check #3
What is a patent? Legal rights to make or sell an invention

5. The Growth of Big Business
FREE ENTERPRISE
(business that is free from government involvement) +
NEW TECHNOLOGICAL DEVELOPMENTS +
NEW FORMS OF BUSINESS ORGANIZATION =
INDUSTRIES’ PRODUCTIVITY & PROFITS

6. capitalism
Private ownership of businesses with little or no government intervention
AKA Free Enterprise
“Laissez-Faire”- let it be… no government interference

7. entrepreneur
A person who starts their own business or creates a new idea for products/businesses

8. The Assembly Line Used by Henry Ford Produced the Model-T Ford
1st to mass produce with interchangeable parts
“You can have any color, as long as it’s black”

9. Types of Businesses
Proprietorship – small businesses owned by individuals or families
Partnerships – businesses owned by two or more people

10. Types of Businesses Corporation
business organization that is distinct from its owners
Approved and chartered by state governments
Raises the money needed to run the company by selling shares of stock

11. stocks
Share in ownership of the company – allows for companies to raise enormous sums of money
Stockholders sometimes receive a dividend or percentage of the company profit based on how much stock they own
Do not run its day-to-day affairs – elect board of directors

12. Corporation Benefits
Stockholders not personally responsible for the debts of the business
If corporation fails – stockholders lose on the money that they invested

13. Trust
group of companies turn their control over to a Board of Directors
Board runs the companies as a single enterprise
A trust can turn into a monopoly when a trust gains total control over an industry

14. monopoly When one business controls an entire industry
Example - if Ford were the only car company
???? Why is that bad for the economy????

15. Horizontal integration
When a company buys out all of their competition
Ex- if Coke bought Pepsi and all other cola companies, if Verizon bought out all cell companies

16. Horizontal Integration
Owning all the businesses in a particular field
Barrels
Storage
Facilities
Standard Oil
Controlled 90% of U.S. Refining Business
Pipelines
Tank Cars

17. John d. rockefeller Started Standard Oil in Cleveland (1870)
Owned 90% of all oil refineries (1877)
The first billionaire in the world (1916) maxing out at $1.4 Billion
By today’s values he would be worth over $345 billion!!
Bill gates - $82 billion

18. Vertical integration
When one business controls all of the means of producing a product
Example - if BP owned the oil wells and drills, the pipelines, the refinery, the trucks and the gas station

19. Vertical Integration
Improve efficiency by making supplies more reliable, controlling the quality of the product at all stages of production, and eliminate middlemen’s fees
To lower cost of production, purchase iron ore mines, coal mines, railroads & shipping, and steel mills

20. U.S. Steel
By turn of century, U.S. Steel produced more steel than all of Great Britain
¼ of all steel in the United States
Estimated worth in 1901 without income taxes: $250 million (today: $100.5 billion)
                                                                                 

21. Andrew Carnegie Leader in the production of Steel
Second wealthiest American during this time
Worth $310 billion
Gave away more than $350 Million to various schools, libraries and charities

22. New Techniques for Selling Products
Developed new methods of marketing products
Brightly colored packaging
Distinctive logos
Advertising – newspapers, magazines, roadside billboards
New kinds of stores
Department Stores: Marshall Fields, Macy’s Offered shoppers all types of items under one roof
Mail-order companies: Sears, Montgomery Wards

23. philanthropy
Giving away massive amounts of money for charitable organizations such as schools, hospitals, libraries etc.

24. Social darwinism Based on Charles Darwin’s theory of natural selection
Those that are best suited for business will survive… others will fail
Used theory as foundation of promoting the virtues of free- market capitalism
“Survival of the Fittest”

25. Philosophy
Others argued divine providence was responsible for winners and losers in society
God granted wealth as He had given grace for material and spiritual salvation of the select few
Those who stayed poor must be lazy and lacking in enterprise

26. Philosophy Carnegie’s Gospel of Wealth
Justified uneven distribution of wealth by industrialists
Stated money should be given away for public good but not to individuals in want