Chapter 11 : Robber Barons and Rebels - The Rise of Industrialization and of the Corporate Economy Flashcards
General Context
- After the Civil War, American industries took off. The country as hit by a huge depression in 1873. War with the Western Indians overtook the Great Plains. Gold was found in the Black Hills and led to the battle of the Little Big Horn in 1876
- New technologies invaded the market
Towards a Modern Economy after 1865: the Rise of the Nation-State
- Concentration of power in the hands of the federal government
- Rise of a federal bureaucracy (the government became the nation’s largest employer)
- Growing cooperation between the government and big corporations
Promotion of industry and agriculture by the federal government
- High tariffs
- Land grants
- The army removed Indians
- The National Guard protected the interests of companies against workers’ demands
Economic changes
- National cooperation between the public and private sector
- Immense needs for capital
- Infrastructures
- Evolution of working conditions
- Importance of new technologies
1869
East and West meet at Promontory Summit
Junction of the Union and Pacific Union in Utah
The main factors of the second Industrial Revolution (1870-1900)
- Abundant natural resources
- A growing supply of labor
- An expanding market for manufactured goods
- The availability of capital for investment
Massive urbanization of the country
Percentage of workers in non-farm employment:
- 1880: 51% 1920:72%
- 1890: 2/3 of Americans worked for wages
- 1880-1920:
11 million Americans moved from farm to city
25 million immigrants arrived
The US population:
1900: 76 million
1915: 100 million
The main centers
- New York merged with Brooklyn in 1898: 3.4 million inhabitants
- Boston (560.000), New York, Philadelphia (1.2 million) banks financed industrialization and westward expansion
- Pittsburg (320.000) produced steel and iron
- Chicago (1.7 million): iron and steel, machinery, chemicals, packaged foods
The Corporations
Definition: “social invention of the state” (a state grants a corporate charter, permitting private financial resources being used for public purposes)
Goal: to aid in the expansion of a state to which it belonged (served to expand colonial and imperial interests)
First Corporations
- Railroad companies
- Industrial trusts (steel, oil)
- Banks
Principles held by Corporate Advocates
- Growth as the way to human progress
- Free markets without government “interference”
- Privatization removes inefficiencies of public sector
- Governments should mainly enforce property rights and contracts
- Economic globalization
Causes of development
- Mechanization in manufacturing and agriculture
- Increase of production and labor
- Division of labor
- Development of transports and communication
- Inventions
- Improved sales methods
Inventions
- The typewriter (1867)
- Barbed wire (1874)
- The telephone (1876)
- The phonograph (1877)
- The electric light (1879)
- The gasoline automobile (1885)
Financing growth
- People invested in corporate enterprise
- Banks helped finance the nation’s economic growth by making loans to businesses
- They also financed westward expansion through their support of the railroad companies
Captains of industry / “Robber Barons”
- Railroad pioneered business techniques
- Financier JP Morgan worked as a central bank
- Andrew Carnegie’s US Steel
- John D. Rockefeller’s Standard Oil controlled 90% of the oil industry
- Jay Gould, railroad owner
