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Analyze different methods that businesses used to increase their profits.

Objectives. Analyze different methods that businesses used to increase their profits. Describe the public debate over the impact of big business. Explain how the government took steps to block abuses of corporate power.

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Analyze different methods that businesses used to increase their profits.

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  1. Objectives • Analyze different methods that businesses used to increase their profits. • Describe the public debate over the impact of big business. • Explain how the government took steps to block abuses of corporate power.

  2. How did big business shape the American economy in the late 1800s and early 1900s? The growth of big business in the late 1800s changed American society. The rise of business empires turned the United States into an economically powerful nation.

  3. Industrialization changed how businesses were run. • Business leaders combined funds and resources. • Investors formed corporations that protected them from losing more than original investment. • A corporation could operate in different regions.

  4. Corporations worked to maximize profits by • paying workers low wages • paying lower prices for raw materials • supporting research labs Standard Oil Factory

  5. Corporations used strategies to eliminate competition and decrease costs. • monopolies • cartels Competitors forced out of business Better control of production and costs reduced • horizontal integration • vertical integration

  6. Vertical Integration Resources ore deposits coal and iron mines Transportation shipping & railroads Steel Mills GIANTSTEELCOMPANY

  7. Horizontal Consolidation Purchase of competing companies in the same industry GIANT STEELCOMPANY Independent Steel Producers

  8. Tycoons of the Late 1800s

  9. Standard Oil Co. American Oil Co. Amoco bought out by BP (British Petroleum) in 20??

  10. or “captains of industry” who served the nation and made prices of goods cheaper? Were the tycoons “robber barons” who swindled the poor and drove small businesses under…

  11. Big Business Is Bad for Small Businesses?

  12. Or Is Big Business Good for the Nation? provides jobs allows for product innovations financially supports universities, libraries, and museums

  13. “ Survival of the Fittest Charles Darwin’s idea of evolution of species applied to American capitalism led to the idea of Social Darwinism This is the belief that wealth was a measure of a person’s value and thosewho had wealth were the most “fit.”

  14. Americans who worried about the methods of industrialists called for federal regulation of business practices. Social Darwinists believed government should stay out of private business and thought it was wrong to use public funds to assist the poor.

  15. The ICC and the Sherman Antitrust Act began a trend toward government limits on corporate power.

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