The Second Industrial Revolution America Mechanizes 1870 -1914

1. What is an Industrial Revolution?

• An industrial revolution is a shift from manual labor and subsistence production to mechanization and mass production

• Mechanization the use of machinery to replace human or animal labor• Mass Production the production of goods in large quantities in a short

amount of time• Subsistence Production making your own products for personal use

The US before the Industrial Revolution:• Agrarian Society – focus on owning rural land and farming• People produced most of what they needed themselves• Bought very few products• Farmland was the most valuable possession

The US after the Industrial Revolution:• Industrial Society – focus on production of goods for profit• More and more people lived in cities• People bought most items, rather than make their own• Factories/businesses became more valuable than farmland

2. The Second Industrial Revolution

• The First Industrial Revolution (FIR) started mainly in Great Britain at the end of the 18th century – later spread to other European countries and the US

• The Second Industrial Revolution (SIR) was an expansion of the FIR, but mostly in the United States – the process was basically the same but greatly expanded

• Machines replaced human and animal labor making businesses more efficient• This created a need for both skilled and unskilled workers to run the machines• As mechanization occurred, the need for more workers increased because owners

bought more machines to mass produce goods (more machines = more workers)

• Products were cheaper to make and could be sold at lower prices – people bought more stuff

• More and more people took jobs in the cities and employment increased greatly• This was how the Industrial Revolution impacted the American economy

3. Why the Delay? What Changed?

• Workers Available• Most farmland was claimed • Newer immigrants settled in cities,

providing a workforce for factories• Growing cities offered more jobs - $• Immigrants lacked money to move

inland

• Transportation Routes improved• Roads, R+R’s, Canals, Airplanes,

Shipping, etc.• Easy way for more products and

people to get to and from major cities and markets

• Lack of Workers• Land was plentiful and cheap –

why work for someone else – own your own land

• There was a shortage of workers needed for factories to develop and grow quickly

• Lack of Effective Transportation• No easy way to get resources &

goods from one part of the country to another (no cars or planes, and limited R+R lines)

4. The Rise of Big Business • Larger businesses realized they could maximize profit by

eliminating their competition• A business could try to buy their rivals or lower their own

prices to force the competition out of the market• Another option was to join forces – known as a trust• Trusts were a way for larger businesses to work together

to control the market (control price and supply)• Eventually, many of the trusts became one company that

controlled the market – known as a monopoly• Steel, Railroads, Oil, and Banking were the four major

monopolies during the SIR• These companies grew extremely large and employed

thousands of workers – owners became multi-millionaires• The US government did not have laws to regulate

monopolies – businesses did as they pleased• During this time, working conditions were generally poor

for laborers

5. Monopolies vs. Competition• (Competitive market – multiple, separate companies

competing to sell similar products)• Monopolies and competitive markets are completely

opposite of each other in theory• A monopoly is the only place to buy the product while

competitive markets offer several choices of where to buy something

• Monopolies can charge as high a price as possible as long as buyers are still willing to pay it – competitors have to try to match other companies in order to attract buyers which keeps prices lower

• But there are some similarities as well…• Both try to minimize cost and maximize profit• Both have the same function costs (what it costs to make

the products)• Both have the same shut down rules (if the cost to make

the product is more than what it can be sold for – it is better to shut business down)

6. The Challenges of Working Conditions

• Working conditions were terrible for most laborers during this time• Wasn’t limited to monopolies only – most businesses had bad conditions• Employees were made to work long hours; sometimes in dangerous, dirty, and

unhealthy environments• Boys as younger than 10 worked in coal mines; girls worked in clothing factories

(known as textile mills)• People were paid terrible wages for difficult work• Workers couldn’t complain because they would be fired (lots of new

immigrants arriving everyday – competition for work was high)• Workers could be easily fired with his or her spot being filled immediately• Owners of companies rarely knew the people who worked for them and didn’t

care who was hired or who was fired