Wealth Notes Essay

Submitted By doctorautymn
Words: 816
Pages: 4

U.S. Industrial Revolution 1865-1900

Summary: The shift from a regional agricultural economy to an integrated national industrial economy. Population shifts westward and to northern cities. Urban areas experience massive growth in population leading to numerous problems. Westward expansion of settlers again leads to conflicts with the native populations.

Factors of the Industrial Revolution

1. Markets:
The people are who are willing and able to buy your products.
Markets were plentiful following the U.S. Civil War, especially in the West…thanks to the Railroads.

2. New Technologies:
New inventions gave the factories something new to produce
New production methods lowered production costs and prices.

New Products: Each new product created a demand for that product. New products also created greater demand for raw materials. i.e. new machines  more steel more mining.

Bessemer Process: A process developed by Henry Bessemer that quickly and cheaply removes impurities from iron ore to create steel, allowing for the production of large amounts of steel to support industry, railroads, etc.

10,000 tons per year in1864 10,000,000 tons per year in1900

3. Large supply of cheap labor: A large supply of cheap labor helped factory owners keep their costs low.

Capitalism- an economic system where the means of production (land , resources, labor) are owned by individuals.

Communism- an economic and political system where the means of production are owned collectively. Everyone owns everything and no one owns anything.

Entrepreneurs: People who risk capital to create a companies or businesses in hopes of making money.

Andrew Carnegie- invested in the steel industry, building factories that used the Bessemer process to produce steel.

“Gospel of Wealth”- the idea that anyone who succeeds economically is responsible for managing their money for the good of the society that enabled him/her to earn it.

John D. Rockefeller- Established the Standard Oil Company (Amoco now BP) and soon had a monopoly in the oil industry.

a. Monopoly- when a person or company controls an entire industry. I.e. they have little if any competition. This allows them to exploit consumers who need their goods or services.

Vertical Consolidation- taking control of all phases of an industry to reduce your costs, and undersell your competitors and drive them out of business.

Horizontal Consolidation- taking control of only one phase of an industry to force your competitors to do business with you and then driving them out of business.

Trusts- a collection of companies that are controlled by a single board of trustees through stock ownership.

U.S. Government was Pro-Business

Tariffs: a tax on imports Makes foreign goods more expensive Helps reduce competition for domestic producers Tend to hurt consumers.

Constitution: Art 1 Sec. 8 para 3 states that congress may “regulate commerce with foreign nations, and among the several states, and with Indian tribes;” If commerce doesn’t cross state lines congress can’t regulate.

Social Darwinism- The idea that a person’s economic success or failure is due to their own actions or characteristics. i.e. hard working and focused equals success while lazy equals failure.

Birth of the U.S. Labor Movement

American workers were unhappy with Low wages- on average about $.14…