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Chapter 13 Section2

Chapter 13 Section2. The Growth of Big Business. Social Darwinism. Survival of the fittest Believed in little government interference. How did the theory of social Darwinism affect the government’s relationship to big business?.

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Chapter 13 Section2

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  1. Chapter 13 Section2 The Growth of Big Business

  2. Social Darwinism • Survival of the fittest • Believed in little government interference

  3. How did the theory of social Darwinism affect the government’s relationship to big business? • It encouraged government to take a hands-off approach to big business

  4. Oligopoly • Occurs when to cost of starting a certain type of business is high

  5. Monopoly • When a business gains complete control of a product or service

  6. Cartel • A loose association of businesses that make the same product

  7. Andrew Carnegie • Founded first plants to use Bessemer Process to produce steel

  8. Gospel of Wealth • A personal philosophy of Andrew Carnegie • Became a movement of the early 20th century

  9. Gospel of Wealth • Carnegie donated money to build 3,000 libraries • Supported art and research institutes

  10. Vertical Consolidation • Business tactic of Andrew Carnegie

  11. Economies of Scale • As production increases, the cost of each item produced is lower

  12. John D. Rockefeller • Founded Standard Oil in 1870

  13. Horizontal Consolidation • Business tactic of Rockefeller • Bringing together many firms in the same business (taking over your competitors)

  14. How did methods such as vertical and horizontal consolidation, and factors such as economies of scale help companies dominate their markets? • Through horizontal consolidation, companies purchased competing companies • Through vertical consolidation and economies of scale, companies lowered production costs so much that other companies could not compete

  15. Trust • Different firms in the same business (oil for example) being run as one company by a board of trustees

  16. Sherman Antitrust Act • Outlawed any combination of companies that restrained interstate trade or commerce

  17. Why did the Sherman Antitrust Act seek to stop big business from forming trusts? • Trusts threatened fair competition in industry • Trusts may cause prices to rise due to lack of competition

  18. What were some features of the new big businesses? • Large amounts of capital • Wider geographic span • Broader range of operations (they make more than one thing)

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