Industrialization 1865 1900 Causes of Industrialization Natural Resources

Industrialization (1865 -1900)

Causes of Industrialization Natural Resources n Population Growth u US population tripled b/t 1860 & 1910 t 31. 5 million to 92. 2 million n Improvements in Transportation u Transcontinental Railroad n Population Ticker n

1 st Transcontinental Railroad (1869) Railroads created the need for time zones

Laissez Faire “let people do as they choose” Economic system in which there is no government involvement t Only gov’t role is to protect property rights and maintain peace n Supply and Demand decide prices and wages n Basis of capitalism – our current economic structure in the United States n

Adam Smith Wealth of Nations (1776) n Invisible Hand u Self-interest guides the most effective use of resources in an economy n Supply and Demand Economics n

Adam Smith (cont. ) What people make the most money under this system? n Difficult and Dangerous Jobs = $$$ u Specialization of Labor n

Karl Marx (1818 -83) Communism – an ideology that seeks to create a classless society in which the gov’t controls the means of production (economy). COMMAND economy. n An equality-based society n Community shares wealth n Same wages for all occupations n

Capitalism-ish or Communism-ish? Mrs. Houser decides to cut a rap album and to sell it in the school cafeteria. n The minimum wage n Pay for work past 40 hour n Federal regulation of housing prices n Public schools n I sell my own rap albums for $1 in order to put Mrs. Houser out of business and then raise my prices to $20 n

Economic Terms n n n Corporation – business owned by multiple entrepreneurs u Pepsico, Altria, Proctor and Gamble, u News Corporation t 25 Biggest Corporations Stock – ownership in a business u Google, Apple Pools – agreements to maintain prices at a certain level

More Terms Fixed Costs - $$$ a company has to pay all the time u Loans, mortgages, taxes n Operating Costs - $$$ a company must pay only when producing u Wages, utilities, shipping, materials, etc. n

Here Come the Rockefellas n Vertical Integration u A business purchases other businesses that it depends on t Andrew Carnegie (US Steel)

Horizontal Integration Combing firms in the same industry under one corporation u Buying out the competition u More control over prices n John Rockefeller u Standard Oil n

Changes Brought By Industrialization n n Machine based factories – less manual labor Poor working conditions u Lint, dust, toxic fumes u Increase in worker injuries Standard of Living goes up u Real wages increase 50% b/t 1860 and 1890 u 22 cents an hour; 59 hours per week in 1900 Deflation – a rise in the value of money u Opposite of inflation u Factories tried to lower worker wages

Response to Conditions = Unions Union - an organization of workers, formed to deal/negotiate with employers n Workers love ‘em – Employers hate ‘em n

Attempts to Prevent Unions Blacklist – union organizers fired and put on a list that was distributed n Lockout – union workers locked out of factory and not paid – scabs hired n Strikebreakers n Courts often ruled in favor of big business n

The Great Railroad Strike of 1877 Upset with pay cuts following Panic of 1873’s recession n 80, 000 workers in 11 states n Fights b/t workers and state militias sent to quell the violence n 100 dead, millions of $$$ in damage n

A better way Arbitration – allowing a third party to help workers and management reach an agreement n Wanted… u 8 hr work day, no child labor, equal pay for women, worker- owned companies n

American Federation of Labor AFL – Samuel Gompers n Three goals u Convince companies to recognize unions u Closed shops u 8 hour work day n 500, 000 members in 1900 n AFL-CIO n

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Thomas Edison n The Wizard of Menlo Park