Big Business and Labor

A. 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 was the process of a growing industry buying out its suppliers of resources and transportation.


B.Vertical integration helped businesses such as the Carnegie Company by aiding it to control its own industry, therefore making it harder for there to be any competitors. If the Carnegie Company owns the place that has its necessary resources and owns its transportation system, then it's not going to offer those resources or that transportation to any competing businesses. In the long run, this helped tycoons like Andrew Carnegie to gain more money and more power within their industries.

2. Horizontal integration

A. Horizontal integration was the process of a growing industry merging with or buying out all its competitors.

 B. Horizontal integration helped businesses such as the Carnegie Company by taking out all its competitors by merging with them, and making the original business even larger and more powerful. This again just aided tycoons like Andrew Carnegie to gain more profits, and to come closer to having a monopoly.

3. Social Darwinism

A. Social Darwinism was a term for taking the idea of "natural selection" from Charles Darwin's theory of evolution, and applying it within society and economics.

 B. Social Darwinism helped big businesses and tycoons because it supported their beliefs that they, by the idea of natural selection, were better fit to be in power of the market than the people below them. Therefore smaller businesses would sometimes just merge with the larger ones because they believed that by "natural selection", they were less fit to run a large business. The idea, "If you can't beat 'em, join 'em." came into play as well.

4. Monopoly

A. A monopoly means an industry has total control over it's production, wages, and prices.

 B. Monopolies were basically the goal of tycoons and big businesses, once a business had a monopoly, it had become the ultimate power of that industry. Monopolies, in a way, allowed businesses to manipulate the economy, because they had complete control over the price of their product, and no competitors to provide another choice for the public.


5. Holding company

A. A holding company was a corporation that bought out the stock of its competitors, and that's all it did.

B. This allowed large corporations and business leaders to become bigger and more powerful, once they bought out the stock of the biggest companies in their industry.

6. Trust

A. A trust is when a company establishes a trust agreement with a competing company. The companies within the trust turned their stock over to trustees, and in return the companies would get profits.

 B. Trusts allowed a different approach to power for businesses and business leaders. Although they were not "legal mergers", they were a way to become a monopoly. John D. Rockefeller used a trust to gain monopoly over the oil industry.


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" put tycoons like John D. Rockefeller in a bad light, and made monopolized businesses such as Standard Oil seem more powerful than they should be allowed. They were thought, by some, to be manipulating the government.

8. Sherman Antitrust Act

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

The Sherman Antitrust Act harmed businesses such as Standard Oil and tycoons like John D. Rockefeller because it made it illegal to form a trust that inhibited free trade between states or other countries, and John D. Rockefeller had come to power in his industry through a trust. It threatened to limit the power of big businesses like Standard Oil, therefore sometimes businesses had to reorganize into single corporations to avoid prosecution.