Industrial Revolution

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Industrial Revolution

• Working Conditions

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Changes in the Work Place

• Original manufacturing was an Artisinal System
  (think of an artist or you making the car)
• Big Change Division of Labor occurs! (think of
  you making only one part of the car)

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The Difference in Production
Division of Labor
Artisinal System
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WOW! Division of Labor Changes Manufacturing!

• Positive increases productivity for businesses
• Negative workers no longer take pride in work
  and removes creativity

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Growing Work Force

• Immigrants
• Former Farm Families
• Women and Children
• Does not include African Americans

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The Life of a Worker

• Children as young as age 6 sent out to work
• Aid provided by private charities because . . .
• Government Welfare does not exist at this time!

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The Life of a Worker, cont.

• Typically work 12 hours/day, 6 days/week
• Difficult to move outside of the area of industry
  that your ethnicity put you into.

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A Segregated System of Labor
Skilled Workers Native Born
Semi-Skilled WorkersIrish and Germans
Unskilled Workers Italians and Poles
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Those Who Helped Workers Jacob Riis

• Illustrated the negative impact of children
  working in mines and factories
• Published photos of working children in How the
  Other Half Lives and wrote Children of the Poor

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Lewis Hine

• Traveled around the country to photograph child
  workers in factories, mills, mines, and
  canneries.
• Documented the plight of working children
• Photos were used as evidence (to the public and
  government) of the need for child labor reform

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The Growth of Big Business

• The Good and The Bad

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Robber Barons

• Business leaders who made fortunes by stealing
  from public
• They drained natural resources, paid low wages to
  workers, required long hours of employees

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Robber Barons
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• They persuaded public officials to interpret laws
  in their favor
• They ruthlessly drove their competitors to ruin

• Paid their workers meager wages and forced them
  to toil under dangerous and unhealthful
  conditions

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Captains of Industry

• The business leaders served their nation in a
  positive way.
• Raised productivity and expanded markets.

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• Created jobs that enabled many Americans to buy
  new goods and raise their standard of living.

• Also created museums, libraries, and
  universities, many of which still serve the
  public today.

Carnegie Hall
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Robber Baron versus Captain of Industry

• Robber Baron negative
• Captain of Industry positiveBusiness leaders
  who served the nation (built factories, increased
  supplies, raised production, expanded markets,
  and provided jobs)

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How did the industrialists (business leaders)
gain an edge and what were the effects on US
society?

• Underpay their workers
• Drive competitors out of business
• Develop new ways to organize their businesses

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Vertical Integration/Consolidation

• Buying out or controlling businesses related to
  various phases of production for one product

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Controlling the Market
Using Vertical Integration, Bob could control the
Pizza market in town by controlling many of the
costs associated with making his pizza!
Bobs Pizza
Bobs Trucking Company
Bobs Cheese Factory
Bobs Farm
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Horizontal Integration/Consolidation

• When you buy out all of your competitors (firms
  that are part of the same business)

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Controlling the Market
Bobs Pizza
Delaware Pizza
Happy Time Pizza
Pizza Pizza
Using Horizontal Integration, Bob could control
the Pizza market in town by buying the other
Pizza shops!
Bobs Pizza
Bobs Pizza
Bobs Pizza
Bobs Pizza
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Monopoly vs. Cartel

• Monopoly one company with complete control of a
  product or a service (think Microsoft)
• Cartel a loose association of businesses in a
  similar field that make the same product and
  agree to limit supply to drive up prices (think
  oil or illegal drugs)

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Andrew Carnegie
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Andrew Carnegie

• Captain of Industry for steel production in
  Pittsburgh
• Used Bessemer Process to produce stronger steel
• Utilized vertical integration or consolidation
  for business purposes
• Born in Scotland

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Carnegie as a Philanthropist

• A Philanthropist uses wealth to improve society
• Carnegie funded the building of libraries,
  education facilities, and music/arts facilities

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Wrote Gospel of Wealth

• Carnegies philosophy that a person should be
  able to make as much money as they can, BUT they
  should also use their wealth to improve society

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Social Darwinism Drove American Business

• Based on Darwins Theory of Evolution (1859)
  regarding natural selection and survival of the
  fittest
• Businessmen are justified in using any means to
  become rich and powerful the government should
  stay out!

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John D. Rockefeller

• Formed Standard Oil Company

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John D. Rockefeller and the Standard Oil Company

• Wealthy individual who saw the oil industry as a
  way to get richer
• Made illegal deals with railroads to transport
  oil cheaper, thus weakening other refineries that
  he would eventually buy
• Utilized horizontal integration or consolidation
  for business purposes

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Also important re Standard Oil ... Trusts

• A group of separate companies that are placed
  under the control of a single managing board
  (Board of Directors)
• Trusts limit competition and cause prices to rise

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Which Led to the Sherman Antitrust Act

• Enacted in 1890
• Effort by Congress to end trusts/monopolies
• Ineffective due to lack of enforcement

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Business Cycle
growth peak recession depression

• The growth and contraction of a nations economy
• A new concept in the mid-late 1800s

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Entrepreneurs

• Individuals who start their own businesses such
  as . . .
• Rockefeller Oil
• Carnegie Steel
• Vandebilt Railroad
• Levi Strauss (Denim) Clothing
• Bill Gates Computer Software

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Ida Tarbell

• Focused on Drilling, shipping, refining, and the
  sale of oil
• Smaller companies could not pay the higher
  shipping costs

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Ida Tarbell

• Journalist who investigates and exposes
  misconduct among political and/or business leaders

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Ida Tarbell

• Idas father was forced out of business by
  Standard Oil
• Perhaps this was revenge???

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Ida Tarbell

• Muckraking Journalism can . . .
• Expose legitimate misconduct and corruption
• Create disbelief and cynicism
• Be false and harmful to innocent parties