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.

Tarbell's History of Standard Oil

1. How did Rockefeller set out to acquire control of the oil industry?

     Rockefeller set out to acquire control of the oil industry by knowing every detail of the oil trade. He wanted to be able to reach its furthest point at any time and to control even the smallest factor. This was the way Rockefeller wanted to do business. In the 1870's he already controlled oil refining and transportation. He set out to acquire complete control of the oil industry by organizing the oil markets of the world. He wanted all the markets of the world to belong to him. He set out to replace independent agents and jobbers with his own employees. He mapped out the United States and appointed agents among regional divisions including the southwest and the south. The entire oil buying territory of the country was covered by local agents who reported to division headquarters who reported to the head of the state marketing department whose reports went to general marketing headquarters and so on until they reached John D Rockefeller himself. Mr. Rockefeller's moto was "The coal, oil business belongs to us." This was his guiding principle in acquiring control of the oil industry.

2. Do you think Rockefeller deserved to be called a "robber baron?" Why or why not?

      A "robber baron" is is a derogatory term for a business man or industrialist who used questionable business practices in order to achieve great wealth, often by taking advantage of the disadvantaged or poor. Rockefeller became an incredibly wealthy man. He no doubt employed some business practices that may not have been entirely ethical and may have been questionable and were at the least extremely aggressive. He wasn't satisfied with merely being wealthy, he wanted complete control of the oil industry so that if you wanted to buy oil, refine it, or transport it you had to go through John D Rockefeller. On the other hand, the contributions that Rockefeller and other great industrialist made to the growth of the United States as a power must certainly be considered when you are deciding whether to label him a robber baron. Rockefeller and others like him followed the American Dream of achievement. In spite of this, I believe that anybody who uses unethical business practices to obtain great wealth should be considered a robber baron.