ROBBER BARONS
As industry came of age, the nation was experiencing a proseperous economy. Robber Barrons, today know as billionaires were the economic princes of this industrial age. At first, the government did attempt to regulate the rapid growth of commerce. But the courts, (especially Supreme Court) were extremely pro-buisness. With almost no restriction on buisnesses, Robber Barons followed their path that led to greater economic and buisness of scale. This was know as the corporate consolidation.
Consisting of legal and illegal practices, these "capitains of industry" mainly used horizontal and vertical integration.
As industry came of age, the nation was experiencing a proseperous economy. Robber Barrons, today know as billionaires were the economic princes of this industrial age. At first, the government did attempt to regulate the rapid growth of commerce. But the courts, (especially Supreme Court) were extremely pro-buisness. With almost no restriction on buisnesses, Robber Barons followed their path that led to greater economic and buisness of scale. This was know as the corporate consolidation.
Consisting of legal and illegal practices, these "capitains of industry" mainly used horizontal and vertical integration.
Horizontal integration created a monopoly or complete control over an industry by combining legally or illegally several smaller companies into a giant "trust", destroying other market competitors; like John D. Rockfeller's Standar Oil Company | Vertical integration remained legal. While depriving companies from becoming either a trust or a holding company, it allowed other companies in the same produtction to survive and compete in the market place. One company, like the Carnegie Steel Co, buys out all the factors of production, from raw materials to finished products. |
Although these "indutrial titans" were corrupt and ruthless, they transform the American industry into a world power of oil, steel, finance and communication.
John Pierpont Morgan started his own private banking company in 1871. It was so powerful that even the U.S. government looked to the firm for help with the depression of 1895. He eventually bought Andrew carnegie's steel industry increasing the size of his financial empire. The government later filed suit against the company over concerns about monopolies.
| Andrew Carnegie owned the Carnegie Steel Coroporation in 1889. He supported Social Darwinism and believed that only the fittest will survive the world of buisness. He also argues that the concentration of wealth among the few was a natural result of capitalism- a belief that he dubbed the Gospel of Wealth. In 1901 he sold his business and dedicated his time to expanding his philanthropic, or charity work, including the establishment of Carnegie-Mellon University in 1904. |
John D. Rockefeller built his first oil refinery, near Cleveland and incorporated the Standard Oil Company in 1870. By 1882 it had a near monopoly of the oil business in the US, but aggressive competitive practices of the company led to the passing of antimonopoly laws. The oil-fired lamps were quickly rendered by Thomas Edison's new eletric light bulb (that also extended work hours). Not unitl the 1900 and the invention of the automobile that oil was used again for gasoline burning internal conbustion engines. | Cornelius Vanderbilt began a passenger ferry business in New York harbor with one boat, then started his own steamship company, eventually controlling Hudson River traffic. He also provided the first rail service between New York and Chicago. At his death in 1877, he had amassed the largest fortune accumulated in the U.S. to that date. |
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NegativeRobber Barons were greedy entrepreneurs that exploit workers and corrupt political balance in governement. They took advantage of new immigrants and feared revolts from the lower class. The term "Robber Baron" represents their ruthless and agressive character.
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