US Studies

Northwest High School

US Studies

Northwest High School

Causes of Rapid IndustrializationCauses of Rapid Industrialization

Technological innovations. Bessemer and open hearth

process Drake’s steam-powered oil

drill Edison

o “Wizard of Menlo Park”o light bulb, phonograph,

motion pictures.

Technological innovations. Bessemer and open hearth

process Drake’s steam-powered oil

drill Edison

o “Wizard of Menlo Park”o light bulb, phonograph,

motion pictures.

Thomas Alva EdisonThomas Alva Edison

“Wizard of Menlo Park”

One of first Americans to open a lab

Invented for a living

Opened lab during an economic downturn

“Wizard of Menlo Park”

One of first Americans to open a lab

Invented for a living

Opened lab during an economic downturn

The Phonograph (1877)The Phonograph (1877)

The Ediphone or DictaphoneThe Ediphone or Dictaphone

The Motion Picture CameraThe Motion Picture Camera

Alexander Graham BellAlexander Graham Bell

Telephone (1876)Telephone (1876)

Alternate CurrentAlternate Current

George WestinghouseGeorge Westinghouse

The AirplaneThe Airplane

Wilbur Wright

Wilbur Wright

Kitty Hawk, NC – December 7, 1903

Kitty Hawk, NC – December 7, 1903

Orville Wright

U. 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.

1. Unskilled & semi-skilled labor in abundance.

2. Abundant capital.3. New, talented group of businessmen

[entrepreneurs] and advisors.4. Market growing as US population

increased.5. Government willing to help at all levels

to stimulate economic growth.6. Abundant natural resources.

1. Unskilled & semi-skilled labor in abundance.

2. Abundant capital.3. New, talented group of businessmen

[entrepreneurs] and advisors.4. Market growing as US population

increased.5. Government willing to help at all levels

to stimulate economic growth.6. Abundant natural resources.

Causes of Rapid IndustrializationCauses of Rapid Industrialization

New Business CultureNew Business CultureLaissez Faire the ideology of the Industrial Age.Laissez Faire the ideology of the Industrial Age.

Individuals should compete freely in the marketplace.

No room for government in the market!

Individuals should compete freely in the marketplace.

No room for government in the market!

Social DarwinismSocial Darwinism• Advocate of laissez-

faire.• Adapted Darwin’s

ideas to humans.• Notion of “Survival of

the Fittest.”• Individuals must

have absolute freedom to struggle, succeed or fail.

• Therefore, state intervention to reward society and the economy is futile! (unnatural)

• Advocate of laissez-faire.

• Adapted Darwin’s ideas to humans.

• Notion of “Survival of the Fittest.”

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

• Therefore, state intervention to reward society and the economy is futile! (unnatural)

Herbert SpencerHerbert Spencer

New Type of Business EntitiesNew Type of Business Entities1. Pool: A temporary grouping of two or more

people to manipulate a businesses’ price and/or volume. Pooling resources is an example

2. Trust: A legal organization set up for the control and management of assets and property of a business. It’s a way to manage several companies (Standard Oil)

1. Pool: A temporary grouping of two or more people to manipulate a businesses’ price and/or volume. Pooling resources is an example

2. Trust: A legal organization set up for the control and management of assets and property of a business. It’s a way to manage several companies (Standard Oil)

1. Vertical Integration: A supply chain united by a common owner. Usually each member of the supply chain produces a different product but contribute to a final product (Carnegie & US Steel)

2. Horizontal Integration: Occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm, e.g. a car manufacturer merging with another car manufacturer (a "buy out" or "take-over“)

Types of Trusts

Examples

Regulating the TrustsRegulating the Trusts

1877 Munn. v. IL

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

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

1895 US v. E. C. Knight Co.

1877 Munn. v. IL

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

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

1895 US v. E. C. Knight Co.

Economy moves through three phases:• Peak• Recovery• Panic (Recession; Depression—long recession)

Panic of 1893: Worst until Great Depression of 1930s:• Businesses cut production & fired workers (no unemployment insurance)—see Pullman Strike in next Powerpoint

• Jacob Coxey took unemployed men to D.C. to demand public works jobs (1st March on Washington)

• Laisez-faire government said no!

Downside: Business Cycle