Thursday, October 06, 2005

Ch. 14, Sec. 3, Big Business Emerges

Ch. 14, Section 3, Big Business Emerges

SECTION 3 Big Business and Labor
Identify management and business strategies that contributed to the success of business tycoons such as Andrew Carnegie.
Explain Social Darwinism and its effects on society.
Summarize the emergence and growth of unions.
Explain the violent reactions of industry and government to union strikes.
Focus & Motivate
Starting With the Student
Do you think a poor person could become a billionaire in today’s world? What qualities would such a person need?

Objective 1, Instruct
Carnegie’s Innovation
Discussing Key Ideas
Andrew Carnegie uses new management techniques to improve the quality and cut the cost of producing steel.
New business strategies enable Carnegie to control the steel industry.

More About. . .
Vertical Integration and Horizontal Consolidation
Students can understand better how Carnegie used vertical integration and horizontal consolidation.
Chart the steps of the steel making process and who owns them. Circle the steps that represent Carnegie’s vertical integration and put a box around the steps that represent horizontal consolidation:

Owned by Carnegie
Owned by X
Raw materials: coal/iron
Manufacturing the steel
Steel mills
Steel Mills
Transportation to/from mills

Objective 2, Instruct
Social Darwinism and Business
Discussing Key Ideas
Economists apply Darwin’s theory of natural selection to the marketplace.
This theory implies no government regulation of business and leads to the notion that people deserve their lot in life.
Stories of rags-to-riches success become popular.

Objective 3, Instruct
Fewer Control More
Starting With the Student
What are the advantages and disadvantages of free competition? The best competitor wins, and the handicap system, in which allowances are made to give all competitors an equal chance. Consider that in the business world, the first system is equivalent to laissez faire and the second to government regulation.

Discussing Key Ideas
Consolidation of companies eliminates competition and concentrates power in the hands of a few business tycoons.
Because of their ruthless business tactics, some industrialists are called “robber barons,” although many are also generous philanthropists.
To protect free competition the government passes the Sherman Antitrust Act, but it proves difficult to enforce.

Key Player
John D. Rockefeller
Critical Thinking: Comparing and Contrasting
Compare the attitudes of Rockefeller and of his father toward their children. Students may research the contributions to society made by Rockefeller’s five sons and his grandson, John D. Rockefeller, IV.

History From Visuals
Political Cartoon
Reading the Cartoon
What are the relative sizes of Rockefeller and the government buildings? What does this imply? What do the smokestacks coming out of the Capital building in the background signify?
Summarize the meaning of the cartoon in two or three sentences.

Robber Barons or Captains of Industry?
Starting With the Student
What do you know about business tycoons? What personal characteristics do they have? What kinds of business practices do they use? Do you look up to them or do you reject their values?

Discussing Key Ideas
Some people think business tycoons are robber barons because they exploit their workers and the public.
These people po8nt to the tycoon’s unscrupulous business practices.
Others see the tycoons as captains of industry because they revolutionize business.
They also give generously to social causes and provide a model for others to emulate.

Objective 4, Instruct
Business Boom Bypasses the South
Discussing Key Ideas
The post-Civil War South is mainly agricultural.
Northeners are unwilling to invest in Southern businesses but own major industries such as the railroads.
Southern entrepreneurs are handicapped by high transportation costs and tariffs.

As businesses consolidated and industrialists became richer and richer, individual workers continued to work long hours in unhealthy conditions for low pay. They eventually followed the lead of merging companies and united in a nationwide labor movement to demand their rights.

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