part i: why big business is good defending the corporation in american society, 1870-1920

Part I: Why Big Business is Good

Defending the Corporation in

American Society, 1870-1920

Why Big Business?A Growing National Market

Railroad Mileage: 46,000 in 1865, 238,000 in 1909.

Railroads: Faster, More Efficient, Operate in Night and Bad Weather.

National Goods Began Replacing Local Operations (Examples: Swift and Armour Meatpacking Companies)

Rise of a National Market Created Consumer Culture

Example:Sears CatalogIn 1880s

Why Big Business Becomes More Productive

Vertical Integration: “All parts of the production process—from raw materials to final product—are controlled by a company.”

Economies of Scale: “When producing more means producing more cheaply on a per unit basis.”

Example: James Bonsack’s Cigarette Machine

Was the Rise of Big Business Inevitable?

A. Probably Yes

B. No

Life Before Big Business: The Oil Industry

Oil Fields Oil Transportation

Refineries Retailers

John D. Rockefeller IntegratedOil Industry

Oil Fields

John D. Rockefeller IntegratedOil Industry

Oil Fields

Oil Transportation

John D. Rockefeller IntegratedOil Industry

Oil Fields

Oil Transportation

Refineries

John D. Rockefeller IntegratedOil Industry

Oil Fields

Oil Transportation

Refineries

Retailers

Why Rockefeller Was More Productive

Most efficient refining technology. Not dependent on outside suppliers: own

railroad cars, own barrels, own pipelines. Frantic devotion to cutting costs: The glue

example. Economies of Scale: Price of Kerosene Falls

Big Business Pioneered New Management Techniques

Middle Managers: More Prominent, More Important

The Virtues of Big Business: Andrew Carnegie

Poor Immigrant from Scotland

Tom Scott & Pennsylvania RR

From PA RR to Carnegie Steel

Carnegie Demonstrated “Virtues” of Big Business

Opportunity to All (Immigrants)

Carnegie Demonstrated “Virtues” of Big Business

Opportunity for All (Immigrants)

Continuous Technological Change

Carnegie Demonstrated “Virtues” of Big Business

Opportunity for All (Immigrants)

Continuous Technological Change

Lower Prices Revolutionize Economic Life (Survival of the Fittest)

Lower Prices Generally Benefit …

A. The Rich

B. The Lower and Middle Classes

Innovation Keeps Coming

Oil

Steel

Automobile

“Giving it All Away”

Part II: Why Big Business Was Bad

Rich Societies Are Generally Happier than Poor Societies

A. Yes

B. No

Why Big Business Was Bad

Exploitation of Workers

Why Big Business Was Bad

Exploitation of Workers

Rise in Inequality

Why Big Business Was Bad

Exploitation of Workers

Rise in Inequality

Plight of Small Producers (End of Free Labor Ideology?)

Why Big Business Was Bad Exploitation of

Workers

Rise in Inequality Plight of Small

Producers (End of Free Labor Ideology?)

Big Business and Political Corruption