The Growth of Industrialism The Second Industrial Revolution.

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The Growth of The Growth of IndustrialismIndustrialism

The Second Industrial The Second Industrial RevolutionRevolution

Causes of Rapid Causes of Rapid IndustrializationIndustrializationCauses of Rapid Causes of Rapid IndustrializationIndustrialization

1.1. Steam Revolution of the 1830s-1850s.Steam Revolution of the 1830s-1850s.

2.2. The Railroad fueled the growing US The Railroad fueled the growing US economy:economy:

First big business in the US.First big business in the US. A magnet for financial investment.A magnet for financial investment. The key to opening the West.The key to opening the West. Aided the development of other Aided the development of other

industries.industries.

1.1. Steam Revolution of the 1830s-1850s.Steam Revolution of the 1830s-1850s.

2.2. The Railroad fueled the growing US The Railroad fueled the growing US economy:economy:

First big business in the US.First big business in the US. A magnet for financial investment.A magnet for financial investment. The key to opening the West.The key to opening the West. Aided the development of other Aided the development of other

industries.industries.

Causes of Rapid Causes of Rapid IndustrializationIndustrialization

3. Technological Innovations:3. Technological Innovations: SteelSteel

– Bessemer ProcessBessemer Process– RailroadsRailroads– SkyscrapersSkyscrapers

ElectricityElectricity– Telegraph, telephoneTelegraph, telephone– Escalators, elevators, central heatingEscalators, elevators, central heating– Generators, underground conductorsGenerators, underground conductors

““Wizard of Menlo Wizard of Menlo Park” Park”

Thomas Alva EdisonThomas Alva Edison

Alexander Graham BellAlexander Graham BellAlexander Graham BellAlexander Graham Bell

Telephone (1876)Telephone (1876)

Invention and innovationInvention and innovation

Machines increase productionMachines increase production– Sewing machineSewing machine– Assembly line techniqueAssembly line technique

Henry FordHenry Ford

OilOil– Allowed for automobiles, planesAllowed for automobiles, planes

U. S. Patents GrantedU. S. Patents GrantedU. S. Patents GrantedU. S. Patents Granted

1790s 276 patents issued. 1790s 276 patents issued.

1990s 1,119,220 patents issued. 1990s 1,119,220 patents issued.

4. Unskilled & semi-skilled labor in abundance.

5. Abundant capital.6. New, talented group of businessmen

[entrepreneurs] and advisors.7. Market growing as US population

increased.8. Government willing to help at all levels to

stimulate economic growth.9. Abundant natural resources.

4. Unskilled & semi-skilled labor in abundance.

5. Abundant capital.6. New, talented group of businessmen

[entrepreneurs] and advisors.7. Market growing as US population

increased.8. Government willing to help at all levels to

stimulate economic growth.9. Abundant natural resources.

Causes of Rapid Causes of Rapid IndustrializationIndustrialization

New Business CultureNew Business CultureNew Business CultureNew Business Culture1.1. Laissez FaireLaissez Faire the ideology of the the ideology of the

Industrial Age. Industrial Age.1.1. Laissez FaireLaissez Faire the ideology of the the ideology of the

Industrial Age. 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!

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!

2.2. Social DarwinismSocial Darwinism2.2. Social DarwinismSocial Darwinism× British economist.× Advocate of

laissez-faire.× Adapted Darwin’s

ideas from the “Origin of Species” to humans.

× Notion of “Survival of the Fittest.”

× British economist.× Advocate of

laissez-faire.× Adapted Darwin’s

ideas from the “Origin of Species” to humans.

× Notion of “Survival of the Fittest.”

Herbert SpencerHerbert Spencer

Social Darwinism in AmericaSocial Darwinism in America

$ Individuals must have Individuals must have absolute freedom to absolute freedom to struggle, succeed or struggle, succeed or fail.fail.

$ Therefore, state Therefore, state intervention to reward intervention to reward society and the society and the economy is futile!economy is futile!

William Graham SumnerFolkways (1906)

New Business Culture:New Business Culture:“The American Dream?”“The American Dream?”

3.3. Protestant (Puritan) “Work Ethic”Protestant (Puritan) “Work Ethic” Horatio Alger [100+ novels]Horatio Alger [100+ novels]

Is the idea of the “self-made man” a MYTH??Is the idea of the “self-made man” a MYTH??

Industrial LeadersIndustrial Leaders

Rockefeller and OilRockefeller and Oil– By 1879, Standard Oil owned over 90% of the By 1879, Standard Oil owned over 90% of the

marketmarket– Also gained control of pipelines and railroadsAlso gained control of pipelines and railroads– Reduced oil prices for the first timeReduced oil prices for the first time

Carnegie and SteelCarnegie and Steel– Built a steel plant using the Bessemer ProcessBuilt a steel plant using the Bessemer Process– Fired incompetent employees, slashed prices Fired incompetent employees, slashed prices

during recession and kept tabs on competitorsduring recession and kept tabs on competitors– In 1900, Carnegie produced ¼ of the steelIn 1900, Carnegie produced ¼ of the steel

Other Industry leadersOther Industry leaders

VanderbiltVanderbilt– Swept up the railroad industry into Swept up the railroad industry into

smartly linked trunk linessmartly linked trunk lines Armour and SwiftArmour and Swift

– Established control of the beef marketEstablished control of the beef market GuggenheimGuggenheim

– Copper industryCopper industry

New Type of Business New Type of Business EntitiesEntities

1.1. CorporationCorporationAn organization An organization

owned by many owned by many people, but people, but treated by law treated by law as a single as a single person.person.

2.2. PoolsPools

Agreements to Agreements to maintain prices at maintain prices at a certain level.a certain level.

1.1. CorporationCorporationAn organization An organization

owned by many owned by many people, but people, but treated by law treated by law as a single as a single person.person.

2.2. PoolsPools

Agreements to Agreements to maintain prices at maintain prices at a certain level.a certain level.

3. Trust: allows one person to manage 3. Trust: allows one person to manage another person’s property.another person’s property.

4. Monopoly: gaining exclusive control 4. Monopoly: gaining exclusive control of a market.of a market.

3. Trust: allows one person to manage 3. Trust: allows one person to manage another person’s property.another person’s property.

4. Monopoly: gaining exclusive control 4. Monopoly: gaining exclusive control of a market.of a market.

Types of Monopolies

Horizontal 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.

2.2. TrustTrust:: Horizontal IntegrationHorizontal Integration John D. John D.

Rockefeller Rockefeller

2.2. TrustTrust:: Horizontal IntegrationHorizontal Integration John D. John D.

Rockefeller Rockefeller Vertical Integration:

o Gustavus Swift Meat-packingo Andrew Carnegie U. S. Steel

Vertical Integration:o Gustavus Swift Meat-packingo Andrew Carnegie U. S. Steel

% of Billionaires in % of Billionaires in 19001900

% of Billionaires in % of Billionaires in 19181918

Criticism and Defense of Big Criticism and Defense of Big BusinessBusiness

CriticsCritics– Gap between rich and poorGap between rich and poor– Disproved of minority owning resourcesDisproved of minority owning resources– The material worth of 1% of the The material worth of 1% of the

population was greater than 99% population was greater than 99% combined. (1900)combined. (1900)

William VanderbiltWilliam VanderbiltWilliam VanderbiltWilliam Vanderbilt

$ The public be damned!

$ What do I care about the law? H’aint I got the power?

$ The public be damned!

$ What do I care about the law? H’aint I got the power?

Standard Oil Co.Standard Oil Co.Standard Oil Co.Standard Oil Co.

The Bosses of the SenateThe Bosses of the Senate

Criticism and Defense of Big Criticism and Defense of Big BusinessBusiness

DefenseDefense– Taken risks and so were entitled to Taken risks and so were entitled to

profitsprofits– ““The Gospel of Wealth”The Gospel of Wealth”– Carnegie donated $350 million during Carnegie donated $350 million during

his lifetime to libraries, schools, and his lifetime to libraries, schools, and researchresearch

““On Wealth”On Wealth”““On Wealth”On Wealth”

Andrew CarnegieAndrew Carnegie

$ The Anglo-Saxon race is superior.

$ “Gospel of Wealth” (1901).

$ Inequality is inevitable and good.

$ Wealthy should act as “trustees” for their “poorer brethren.”

$ The Anglo-Saxon race is superior.

$ “Gospel of Wealth” (1901).

$ Inequality is inevitable and good.

$ Wealthy should act as “trustees” for their “poorer brethren.”

Regulating the TrustsRegulating the TrustsRegulating the TrustsRegulating the Trusts1877 1877 Munn. v. ILMunn. v. IL

1886 1886 Wabash, St. Louis & Pacific Wabash, St. Louis & Pacific Railroad Company v. IL Railroad Company v. IL

1890 1890 Sherman Antitrust ActSherman Antitrust Act in “restraint of trade”in “restraint of trade” ““rule of reason” loopholerule of reason” loophole

1895 1895 US v. E. C. Knight Co.US v. E. C. Knight Co.

1877 1877 Munn. v. ILMunn. v. IL

1886 1886 Wabash, St. Louis & Pacific Wabash, St. Louis & Pacific Railroad Company v. IL Railroad Company v. IL

1890 1890 Sherman Antitrust ActSherman Antitrust Act in “restraint of trade”in “restraint of trade” ““rule of reason” loopholerule of reason” loophole

1895 1895 US v. E. C. Knight Co.US v. E. C. Knight Co.

Impact of IndustrialismImpact of Industrialism

Benefits the middle classBenefits the middle class– Greater comforts and conveniencesGreater comforts and conveniences– Sears’ general catalogSears’ general catalog– Clerical and sales positions expanded Clerical and sales positions expanded

with female laborwith female labor– Sent children to collegeSent children to college– Buy propertyBuy property

Life for average AmericansLife for average Americans– Candle-lit homesCandle-lit homes– No indoor plumbing or heatingNo indoor plumbing or heating– Could not afford a phone or stoveCould not afford a phone or stove– Only ¼ of the population owned propertyOnly ¼ of the population owned property– 7% of Americans had high school diplomas7% of Americans had high school diplomas– Laborers had neither time or money to Laborers had neither time or money to

enjoy leisure activities and luxury goodsenjoy leisure activities and luxury goods

Industrial Working ConditionsIndustrial Working Conditions– 10-12 hour days10-12 hour days– Faced extreme heatFaced extreme heat– Permanent back injuriesPermanent back injuries– Injuries from faulty machines or from Injuries from faulty machines or from

lack of sleeplack of sleep– ““become a hand—not a brain—not a become a hand—not a brain—not a

soul—deadened into a part of a soul—deadened into a part of a machine.”machine.”

Low pay and reasons to stayLow pay and reasons to stay– Sought to keep jobs long enough to Sought to keep jobs long enough to

return home richerreturn home richer– Competing supply of laborCompeting supply of labor– Take home pay as low as $5 a week Take home pay as low as $5 a week – Kept thousands of families living at Kept thousands of families living at

poverty levels.poverty levels.

The Growth of Industrialism The Second Industrial Revolution.

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