INDUSTRY AND BIG BUSINESS

1. What is a monopoly?2. What does “capitalist system”

mean?3. If you have stock in a company,

what does that mean?4. What’s the difference between a

“trust” and a “corporation”5. What is the purpose of a labor

union?6. Define “laissez-faire”

Free Enterprise – private companies freely competing with each other with little or no government regulation

Monopoly – a single business in an industry that has the power to control the price of a good

How does a monopoly effect free enterprise?

INDUSTRY & BIG BUSINESS 1

Corporation – a business that sells stock to investors who own part of the company and share its profits

Trust – a single board of trustees who control a group of member corporations

Name a modern example of a:Corporation =AT & T, Time WarnerTrust = Gap owns Old Navy & Banana

Republic

2

Horizontal IntegrationA company controls

ONE area of production such as raw materials OR manufacturing OR distribution

Vertical IntegrationA company controls

ALL parts of production from raw materials to distribution of finished goods

“Robber Baron”

Think & list adjectives for the words below:

“Captain of Industry”

Captain of Industry or Robber Baron?Steel – Andrew

Carnegie (Carnegie Steel)Iron ore minesCoal minesSteel factories/millsTransportation

(railroads & shipping)

Oil – John D. Rockefeller (Standard Oil Company)Oil rich landOil drillsOil refineriesTransportation

In 1870, Standard Oil Co. processed 2%-3% of U.S. oil

By 1880, it controlled 90% of U.S. refineries.

What is Social Darwinism?

Justifying WealthThe rich believed in Social Darwinism

People became rich because they were smart and worked hard people were poor because they were “stupid” and “lazy”

Laissez-faire – idea that business should be free of govt regulation

Government RegulationsThe public calls for action against wealthy

business they refer to as “Robber Barons” took advantage of workers

Congress passes the Sherman Anti-Trust Act Making all monopolies illegal; the law was not

enforced

Congress passes the Interstate Commerce Act, which regulates railroad rates makes rebates illegal

***The Sherman Anti-Trust Act and the Interstate Commerce Act were largely ineffective and ignored at first!***

Political machines controlled the cities

Pendleton Civil Service ActAttempted to

cut spoils system

Hiring and promoting people based on how they scored on exams

The Breakers in Newport, RI

Biltmore House Ashville, NC