1. The Growth of Industrialism
The Second Industrial Revolution

2. Causes of Rapid Industrialization
Steam Revolution of the 1830s-1850s.
The Railroad fueled the growing US economy:
First big business in the US.
A magnet for financial investment.
The key to opening the West.
Aided the development of other industries.

3. Causes of Rapid Industrialization
3. Technological Innovations:
Steel
Bessemer Process
Railroads
Skyscrapers
Electricity
Telegraph, telephone
Escalators, elevators, central heating
Generators, underground conductors

4. Thomas Alva Edison
“Wizard of Menlo Park”

5. Alexander Graham Bell
Telephone (1876)

6. Invention and innovation
Machines increase production
Sewing machine
Assembly line technique
Henry Ford
Oil
Allowed for automobiles, planes

7. U. S. Patents Granted 1790s  276 patents issued.

8. Causes of Rapid Industrialization
Unskilled & semi-skilled labor in abundance.
Abundant capital.
New, talented group of businessmen [entrepreneurs] and advisors.
Market growing as US population increased.
Government willing to help at all levels to stimulate economic growth.
Abundant natural resources.

9. New Business Culture
Laissez Faire  the ideology of the Industrial Age.
Individual as a moral and economic ideal.
Individuals should compete freely in the marketplace.
The market was not man-made or invented.
No room for government in the market!

10. 2. Social Darwinism British economist. Advocate of laissez-faire.
Adapted Darwin’s ideas from the “Origin of Species” to humans.
Notion of “Survival of the Fittest.”
Herbert Spencer

11. William Graham Sumner Folkways (1906)
Social Darwinism in America
Individuals must have absolute freedom to struggle, succeed or fail.
Therefore, state intervention to reward society and the economy is futile!
William Graham Sumner Folkways (1906)

12. New Business Culture: “The American Dream?”
Protestant (Puritan) “Work Ethic”
Horatio Alger [100+ novels]
Is the idea of the “self-made man” a MYTH??

13. Industrial Leaders Rockefeller and Oil Carnegie and Steel
By 1879, Standard Oil owned over 90% of the market
Also gained control of pipelines and railroads
Reduced oil prices for the first time
Carnegie and Steel
Built a steel plant using the Bessemer Process
Fired incompetent employees, slashed prices during recession and kept tabs on competitors
In 1900, Carnegie produced ¼ of the steel

14. Other Industry leaders
Vanderbilt
Swept up the railroad industry into smartly linked trunk lines
Armour and Swift
Established control of the beef market
Guggenheim
Copper industry

15. New Type of Business Entities
Corporation
An organization owned by many people, but treated by law as a single person.
Pools
Agreements to maintain prices at a certain level.

16. New Type of Business Entities
3. Trust: allows one person to manage another person’s property.
4. Monopoly: gaining exclusive control of a market.

17. Types of Monopolies Horizontal Integration Vertical Integration
Combining many firms in the same type of business into one large corporation.
Vertical Integration
Owns all of the different businesses it depends on for its operation.

18. New Type of Business Entities
Trust:
Horizontal Integration  John D Rockefeller
Vertical Integration:
Gustavus Swift  Meat-packing
Andrew Carnegie  U. S. Steel

19. New Type of Business Entities

20. % of Billionaires in 1900

21. % of Billionaires in 1918

22. Criticism and Defense of Big Business
Critics
Gap between rich and poor
Disproved of minority owning resources
The material worth of 1% of the population was greater than 99% combined. (1900)

23. William Vanderbilt The public be damned!
What do I care about the law? H’aint I got the power?

24. Standard Oil Co.

25. The Bosses of the Senate

26. Criticism and Defense of Big Business
Taken risks and so were entitled to profits
“The Gospel of Wealth”
Carnegie donated $350 million during his lifetime to libraries, schools, and research

27. “On Wealth” The Anglo-Saxon race is superior.
“Gospel of Wealth” (1901).
Inequality is inevitable and good.
Wealthy should act as “trustees” for their “poorer brethren.”
Andrew Carnegie

28. Regulating the Trusts 1877  Munn. v. IL
1886  Wabash, St. Louis & Pacific Railroad Company v. IL
1890  Sherman Antitrust Act
in “restraint of trade”
“rule of reason” loophole
1895  US v. E. C. Knight Co.

29. Impact of Industrialism
Benefits the middle class
Greater comforts and conveniences
Sears’ general catalog
Clerical and sales positions expanded with female labor
Sent children to college
Buy property

30. Impact of Industrialism
Life for average Americans
Candle-lit homes
No indoor plumbing or heating
Could not afford a phone or stove
Only ¼ of the population owned property
7% of Americans had high school diplomas
Laborers had neither time or money to enjoy leisure activities and luxury goods

31. Impact of Industrialism
Industrial Working Conditions
10-12 hour days
Faced extreme heat
Permanent back injuries
Injuries from faulty machines or from lack of sleep
“become a hand—not a brain—not a soul—deadened into a part of a machine.”

32. Impact of Industrialism
Low pay and reasons to stay
Sought to keep jobs long enough to return home richer
Competing supply of labor
Take home pay as low as $5 a week
Kept thousands of families living at poverty levels.