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Industrialization

Industrialization. 1860 - 1914. Capitalist Mythology. Mix of free-labor ideology & Social Darwinism Democratic version: society composed of competing interests; morally neutral Hierarchical version: elites naturally rule, & middle-class Christian morals are norm “Rags-to-Riches” myth

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Industrialization

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  1. Industrialization 1860 - 1914

  2. Capitalist Mythology • Mix of free-labor ideology & Social Darwinism • Democratic version: society composed of competing interests; morally neutral • Hierarchical version: elites naturally rule, & middle-class Christian morals are norm • “Rags-to-Riches” myth • Horatio Alger • Andrew Carnegie • “Laissez-faire” – gov’t should not regulate business Andrew Carnegie

  3. Legal Basis • Limited liability corporation • Investor only liable for amount invested, not entire debt of company • Between 1850-1900, average capital investment increased from $700,000 to $1.9 million • Corporation considered to be a person with rights • Freedom of contract • Each worker free to negotiate terms • Meant no collective bargaining by unions

  4. Playing Monopoly

  5. John D. Rockefeller and Standard Oil • 1860 – began refining oil in Penn. • 1872 –created cartel to fix railroad rates • Bought out competition • controlled 90% of refining by 1879 • 1882 – created investment trust • Stockholders put shares in trust • Held stock in separate state co.s • 1892 – Standard Oil of Ohio trust dissolved by Ohio Supreme Court • 1899 – Standard Oil of NJ – 1stholding company John D. Rockefeller in 1872

  6. Standard Oil’s Cleveland refinery, 1899

  7. Tycoon Cartoon

  8. The House of Morgan • J. Pierpont Morgan channeled European capital into U.S. businesses • Father was partner in London banking house • Demanded seats on boards of companies whose investments he handled (interlocking directorates) • 1901 - Morgan bought out Carnegie for $500 million, creating U.S. Steel

  9. Corporate Mergers

  10. Inventions & Innovations • Alexander Graham Bell invented telephone in 1876 • Bell Telephone Co. organized in 1877 (later became AT&T) • Bought out Edison’s patent for carbon microphone Bell makes first long-distance call, Chicago to New York, 1892

  11. The Wizard of Menlo Park • Thomas Edison: • Phonograph (1877) • Incandescent lightbulb (1879) • mimeograph • Direct current electric transmission • Motion picture

  12. Inventions (cont.) • George Westinghouse developed alternating current (1886) • Could transmit electricity over long distances • Czech immigrant Nikolas Tesla invented AC motor • Granville T. Woods had 35 patents • Automatic circuit breaker • Electromagentic brake Nikolas Tesla Westinghouse AC motors at Chicago’s World Fair, 1893

  13. Railroad Expansion1870-1890

  14. Industrial America

  15. Value Added by Sector,1869 - 1899

  16. Mechanization & Specialization • Frederick W. Taylor was most famous efficiency expert • Broke down jobs into separate motions • Designed equipment to maximize efficiency & minimize time for each motion

  17. Mechanization & Specialization, cont. • Henry Ford introduced moving assembly line (1913) - further isolated tasks • Each worker remains stationary & performs same task, over & over • 1908 = 10,000 Fords sold; 1914 = 248,000 Fords sold

  18. Reducing Labor Costs • 1880-1900: employed women went from 2.6 million to 8.6 million • 1890: 18% of kids between 10-15 employed • Accidents common, even after safety equipment installed

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