Monday, October 10, 2011

Big Business and Labor

1. What is it?                    B.  How did it help businesses such as the Carnegie Company and tycoons like Andrew Carnegie?


1. Vertical integration

A.  Vertical integration is a process of buying out suppliers in Carnegie's case, coal field, iron mines or freighters and railroad mines (resources, manufacturing, and distribution)-in order to control the raw materials and transportation systems.
 

B.  By using a vertical integration system, Carnegie was able to control much of the steel industry.
2. Horizontal integration

A. In the process known as horizontal integration companies producing similar products merge.


B. Carnegie became more powerful by gaining control over his suppliers and limiting his competition, he controlled almost the entire steel industry.

3. Social Darwinism

A. Social Darwinism is a theory that grew out of Charles Darwin's theory of biological evolution which states that some individuals of a species flourish and pass their traits along to the next generation while others do not. A process of "natural selection" enabled only the best adapted to survive.


B. This promoted the theory that success and business were achieved by the most able.

4. Monopoly

A. A monopoly is a complete control over an industries production, wages, and prices.


B. A firm that bought out all of it's competitors could gain a monopoly and getting complete control, thus getting all of the profits of an industry.

5. Holding company

A. A corporation that was created to do nothing but to buy out the stocks of other companies.


B. It provided horizontal integration and allowing a company to gain more control over an industry.

6. Trust

A. A trust was competing companies joining together and turning their stock over to a group of trusties who were people who ran the separate companies as one large corporation. In return, the companies earned dividends on profits earned by the trusts.


B. Businesses tycoons could gain total control of the companies through trusts.


7. The perception of tycoons as “robber barons”

C. How did it harm businesses such as Standard Oil and tycoons like John D. Rockefeller?


The perception of tycoons as "robber barons" harmed businesses because the perception of robber barons where industrialists who gained huge profits through questionable and perhaps illegal business practices. Their power alarmed and caused fear among many. 

8. Sherman Antitrust Act

C. How did it harm businesses such as Standard Oil and tycoons like John D. Rockefeller?


The Sherman Antitrust Act caused businesses such as Standard Oil to reorganize into single corporations. As the Sherman Antitrust Act made it illegal to make a trust to form a trust that interfered with free trade or in the states or other countries.

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