Gilded Age , Compromise 1877 to Turn of century, Teddy Roosevelt becomes President Time of tremendous business growth and labor conflict Mark Twain coined the term Gilded= gold plated Age glittered with new technology, but at its core was corruption and human suffering Growth of monopolies and trusts Labor strikes: Great RR, Haymarket, Pullman, & Homestead New Stock immigrants from Eastern & Southern Europe Urbanization 2 nd Industrial Revolution, (ROSE), Railroads, Oil, Steel, & Electricity What were the Causes of Rapid Industrialization? 1.Steam power from 1 st IR of the 1830s-1850s. 2.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. 1.Steam power from 1 st IR of the 1830s-1850s. 2.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. Causes of Rapid Industrialization 3. Technological innovations. * Bessemer Steel Process Puts air into iron to remove carbon to make steel New Uses for Steel: Steel used in railroads, barbed wire, farm machines Changes construction: Brooklyn Bridge; steel-framed skyscrapers * Refrigerated cars 3. Technological innovations. * Bessemer Steel Process Puts air into iron to remove carbon to make steel New Uses for Steel: Steel used in railroads, barbed wire, farm machines Changes construction: Brooklyn Bridge; steel-framed skyscrapers * Refrigerated cars America wasnt discovered; it was built Iron & Steel Production Thomas Alva Edison Wizard of Menlo Park The Light Bulb The Phonograph (1877) The Ediphone or Dictaphone The Motion Picture Camera Alexander Graham Bell Telephone (1876) Alternate Current George Westinghouse Alternate Current Westinghouse Lamp Advertisement 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.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.Abundant natural resources. Causes of Rapid Industrialization 9. Government Support tariffs private property laws railroad land grants little governmental taxation of corporate profits armed protection of companies with federal troops Supreme Court rulings Relative Share of World Manufacturing New Business Culture 1.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, rather it was a state of nature. * 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, rather it was a state of nature. * No room for government in the market! 2. Social Darwinism British economist. Advocate of laissez-faire. Adapted Darwins ideas from the Origin of Species to humans. Notion of Survival of the Fittest. British economist. Advocate of laissez-faire. Adapted Darwins ideas from the Origin of Species to humans. Notion of Survival of the Fittest. Herbert Spencer 2. Social Darwinism in America William Graham Sumner Folkways (1906) $Individuals must have absolute freedom to struggle, succeed or fail. $Therefore, state intervention to reward society and the economy is futile! $Individuals must have absolute freedom to struggle, succeed or fail. $Therefore, state intervention to reward society and the economy is futile! New Business Culture: The American Dream? 3.Protestant (Puritan) Work Ethic * Horatio Alger [100+ novels] Is the idea of the self-made man a MYTH?? New Type of Business Entities 1.Pool 1887 Interstate Commerce Act Interstate Commerce Commission created. 2.Trust John D. Rockefeller 1.Pool 1887 Interstate Commerce Act Interstate Commerce Commission created. 2.Trust John D. Rockefeller * Standard Oil Co. Trust Holding Company Standard Oil Co. 2009 World Robber Baron List Rank Name Citizenship Age Net Worth ($bil) ResidenceNameCitizenshipAgeNet Worth ($bil)Residence 1 William Gates III United States United StatesWilliam Gates III 2 Warren Buffett United States United StatesWarren Buffett 3 Carlos Slim Helu & family Mexico MexicoCarlos Slim Helu & family 4 Lawrence Ellison United United StatesLawrence Ellison 5 Ingvar Kamprad & family Sweden SwitzerlandIngvar Kamprad & family 6 Karl Albrecht Germany GermanyKarl Albrecht 7 Mukesh Ambani India IndiaMukesh Ambani 8 Lakshmi Mittal India United KingdomLakshmi Mittal 9 Theo Albrecht Germany GermanyTheo Albrecht 10 Amancio Ortega Spain SpainAmancio Ortega 11 Jim Walton United States United StatesJim Walton 12 Alice Walton United States United StatesAlice Walton 13 Christy Walton & family United States United StatesChristy Walton & family 14 S Robson Walton United States United StatesS Robson Walton 15 Bernard Arnault France FranceBernard Arnault New Type of Business Entities 2.Trust: * Horizontal Integration John D. Rockefeller, oil * Vertical Integration: A. Gustavus Swift Meat-packing B. Andrew Carnegie U. S. Steel C. James Duke tobacco New Type of Business Entities Industrial Consolidation: Iron & Steel Firms New Financial Businessman The Broker: * J. Pierpont Morgan Wall Street 1867 & 1900 The Reorganization of Work Frederick W. Taylor The Principles of Scientific Management (1911) Frederick W. Taylor The Principles of Scientific Management (1911) The Reorganization of Work The Assembly Line Robber Barons or Captains of Industry? Wealth Concentration Held by Top 1% of Households (Rockefeller at his height was worth 1.4 billion $, or 665 billion in todays $, Gates worth 56 Billion) % of Billionaires in 1900 % of Billionaires in 1918 William Vanderbilt $The public be damned! $What do I care about the law? Haint I got the power? $The public be damned! $What do I care about the law? Haint I got the power? Religion in the Era of Industrialization Russell H. Conwell $Wealth no longer looked upon as bad. $Viewed as a sign of Gods approval, the Protestant (Puritan) Work Ethic $Christian duty to accumulate wealth. $Wealth no longer looked upon as bad. $Viewed as a sign of Gods approval, the Protestant (Puritan) Work Ethic $Christian duty to accumulate wealth. The Gospel of Wealth: Andrew Carnegie On Wealth, 1889 Andrew Carnegie article $Inequality is inevitable and good. $Wealthy should act as trustees for their poorer brethren. God given responsibility The man who dies rich dies disgraced. Philanthropy, Gave away $350 Million On Wealth, 1889 Andrew Carnegie article $Inequality is inevitable and good. $Wealthy should act as trustees for their poorer brethren. God given responsibility The man who dies rich dies disgraced. Philanthropy, Gave away $350 Million 5 minute introcarnegie/videos/the-men-who-built-america- andrew-carnegiehttp://www.history.com/topics/andrew- carnegie/videos/the-men-who-built-america- andrew-carnegie america/season-1/episode-3http://www.history.com/shows/men-who-built- america/season-1/episode-3 Carengie Episode 3 Rockefeller Episode 1, 25 minutes Electricity Wars Episode 6 Philanthropy 1 st Carnegie library Regulating the Trusts 1877 Munn. v. Illinois: Upheld granger laws (made it illegal for RR to fix prices by pools or rebates) for a state to regulate business of a public nature 1886 Wabash V. Illinois: overturned Munn, states could not regulate interstate commerce 1886 Interstate Commerce Act -Response to Wabash, said RR rates must be reasonable and just -Set up Interstate Commerce commission to regulate & prosecute RRs -Helped RRs more, stabilized rates, curtail destructive competition 1877 Munn. v. Illinois: Upheld granger laws (made it illegal for RR to fix prices by pools or rebates) for a state to regulate business of a public nature 1886 Wabash V. Illinois: overturned Munn, states could not regulate interstate commerce 1886 Interstate Commerce Act -Response to Wabash, said RR rates must be reasonable and just -Set up Interstate Commerce commission to regulate & prosecute RRs -Helped RRs more, stabilized rates, curtail destructive competition Regulating Trusts 1890 Sherman Antitrust Act * Made trusts illegal and other acts of in restraint of trade * Hard to obtain convictions * First used against Labor Unions! 1895 US v. E. C. Knight Co. Sugar company controlled 95% of the market, yet was not ruled a monopoly because it was manufacturing, not commerce U. S. Patents Granted 1790s 276 patents issued. 1990s 1,119,220 patents issued.