The Rise of INDUSTRIAL CAPITALISM [APUSH Review Unit 6 Topic 6] Period 6: 1865-1898

Summary

The video script provides an insightful look into the rise of industrial capitalism in America during the Gilded Age, a period characterized by the shift towards mass production and consumption. It highlights the dominance of large corporations, particularly in the railroad, steel, and oil industries, with key figures like John D. Rockefeller and Andrew Carnegie leading the way through horizontal and vertical integration, respectively. The video also discusses the expansionist tendencies of these industries, seeking new markets and resources abroad. The wealth accumulation of these industrial leaders is attributed to laissez-faire government policies, exploitation of cheap labor, and the application of Social Darwinism to economics. Carnegie's philanthropic efforts, known as the Gospel of Wealth, are presented as a counterbalance to the harsh business practices of the time. The video concludes by leaving it to the viewer to decide whether these figures should be seen as 'captains of industry' or 'robber barons'.

Takeaways

• 🏭 The rise of industrialism and capitalism in America during the Gilded Age led to mass production and consumption of goods.
• 📈 Large corporations and trusts, particularly in the railroad, steel, and oil industries, dominated markets, making small businesses obsolete.
• 🛢️ John D. Rockefeller's Standard Oil exemplified horizontal integration, controlling nearly 90% of the oil industry by the late 1880s.
• 🔩 Andrew Carnegie's steel empire grew through vertical integration, acquiring all aspects of steel production from mining to distribution.
• 🌍 American industries expanded globally, seeking new markets and resources, influencing the push for American imperialism.
• 💰 The wealth of industrial leaders like Rockefeller and Carnegie was facilitated by laissez-faire government policies and a lack of regulation.
• 👥 These industries relied heavily on underpaid labor, including immigrants, women, and children, due to an abundant labor pool and no wage regulations.
• 🧬 Social Darwinism was applied to economics, justifying the survival of the fittest companies and the concentration of wealth in fewer hands.
• 🤑 Andrew Carnegie's Gospel of Wealth argued that the extremely wealthy had a duty to give back to society through philanthropy, which he practiced.
• 🏛️ Carnegie's philanthropic efforts included donating $350 million for the establishment of libraries, concert halls, and universities.
• 🧐 The historical perception of figures like Carnegie and Rockefeller is divided, with some viewing them as 'captains of industry' and others as 'robber barons'.

Q & A

What does the term 'industrialism' refer to in the context of the AP U.S. History curriculum?

Industrialism describes the shift in the way goods are produced and sold, specifically the transition towards mass production and mass consumption.

What is the historical period in American history known as The Gilded Age?

The Gilded Age refers to the period of American history characterized by rapid industrialization and economic growth, despite underlying social and economic problems.

How did John D. Rockefeller manage to dominate the oil industry through his company, Standard Oil?

John D. Rockefeller used shrewd business tactics to force his competitors to sell their companies to him, a practice known as horizontal integration, which led to Standard Oil controlling almost 90% of the oil industry by the late 1880s.

What is the difference between horizontal integration and vertical integration in the context of business practices?

Horizontal integration involves a company buying out its competitors to eliminate competition, while vertical integration is when a company acquires all the complementary industries that support its business, from raw materials to distribution.

How did Andrew Carnegie's approach to business differ from John D. Rockefeller's?

Andrew Carnegie focused on vertical integration, acquiring companies throughout the entire supply chain of steel production, rather than eliminating competitors through horizontal integration.

Why did large corporations and trusts look to foreign markets and resources during the Gilded Age?

As these corporations grew in size and power, they sought to expand their control over foreign markets and resources to increase their profits and secure access to natural resources.

What was the laissez-faire government policy, and how did it contribute to the rise of wealthy industrialists?

Laissez-faire government policies involved minimal government intervention or regulation in business practices, allowing industrialists like Rockefeller and Carnegie to consolidate their power without significant oversight.

How did the availability of underpaid laborers contribute to the wealth of industrialists during the Gilded Age?

The influx of immigrants, along with the employment of women and children, provided a large pool of underpaid laborers, which allowed industrialists to maximize profits without significant wage increases.

What is Social Darwinism, and how was it applied to economics during the Gilded Age?

Social Darwinism is the application of the concept of survival of the fittest from biological evolution to society and economics. It was used to justify the idea that strong companies should dominate or 'eat' weak ones, leading to the concentration of wealth in the hands of a few.

How did Andrew Carnegie's 'Gospel of Wealth' philosophy differ from the standard practices of his time?

Carnegie's 'Gospel of Wealth' argued that the extremely wealthy had a moral duty to invest their wealth back into society through philanthropy, which he demonstrated by donating a significant portion of his wealth to various causes.

What are the two contrasting titles often used to refer to industrial leaders like Andrew Carnegie and John D. Rockefeller?

The two contrasting titles are 'captains of industry,' which carries a positive connotation, and 'robber barons,' which implies a more negative view of their contributions to American society.

Outlines

00:00

🏭 The Gilded Age and Industrial Titans

This video segment explores the rise of industrial capitalism in America during the Gilded Age of the late 1800s, a period characterized by rapid economic growth and stark inequalities. The narrative describes how small businesses became obsolete with the rise of large corporations, particularly in the railroad, steel, and oil industries. Key figures like John D. Rockefeller and Andrew Carnegie are discussed for their roles in monopolizing these industries through strategies like horizontal and vertical integration, respectively. The segment also touches on the broader implications of such industrial growth, including the expansionist view toward acquiring foreign markets and resources.

05:03

🌟 Philanthropy vs. Exploitation in the Industrial Age

This paragraph contrasts the public images of prominent industrial leaders like Andrew Carnegie and John D. Rockefeller, who were seen either as 'captains of industry' for their business acumen and philanthropic efforts, or as 'robber barons' for their exploitative practices. Carnegie's significant contributions to public works are highlighted, alongside a critique of the harsh labor conditions fostered by these industrialists. The segment encourages viewers to form their own opinions on these historical figures, ending with a call to continue exploring U.S. history through the channel's other videos.

Keywords

💡Industrialism

Industrialism refers to the shift in the way goods are produced and sold, specifically the transition towards mass production and mass consumption. In the video, it is a core concept as it describes the transformation of American economy during the Gilded Age, leading to the rise of large corporations and the obsolescence of small, local businesses.

💡Gilded Age

The Gilded Age is a term used by historians to describe the period of American history characterized by rapid economic growth and industrialization, despite underlying social and economic problems. The video uses this term to set the context for discussing the rise of industrial capitalism and the associated issues, like the gold-covered外表掩盖下的不公正现象.

💡John D. Rockefeller

John D. Rockefeller was an American industrialist who played a pivotal role in the development of the U.S. oil industry. As the owner of Standard Oil, he is known for his business tactics that led to the elimination of competition through horizontal integration, which is a key example in the video of how industrial capitalism led to monopolies.

💡Horizontal Integration

Horizontal integration is a business strategy where a company buys out its competitors to eliminate competition. In the context of the video, it is illustrated through the actions of John D. Rockefeller's Standard Oil, which came to control nearly 90% of the oil industry by the late 1880s.

💡Andrew Carnegie

Andrew Carnegie was a leading figure in the steel industry during the Gilded Age. The video highlights his use of vertical integration to dominate the steel industry, acquiring companies throughout the production chain, from mining to processing to distribution, thus illustrating another way industrialists amassed power and wealth.

💡Vertical Integration

Vertical integration is a business strategy where a company acquires or controls the supply chain that feeds into its business. In the video, Andrew Carnegie's steel empire serves as an example of this strategy, where he bought up companies involved in all aspects of steel production to achieve complete control over the industry.

💡Laissez Faire

Laissez faire is a term derived from French, meaning 'let alone', and refers to a government policy of non-intervention in the economy. The video discusses how laissez faire policies allowed industrialists to operate with minimal regulation, contributing to their rapid growth and the exploitation of workers.

💡Social Darwinism

Social Darwinism is the application of the concept of natural selection and survival of the fittest to social and economic contexts. The video explains that this ideology was used to justify the ruthless business practices of the time, suggesting that the accumulation of wealth by the few was a natural outcome of competition.

💡Underpaid Laborers

The video discusses the exploitation of underpaid laborers, including immigrants, women, and children, as a factor contributing to the wealth of industrialists. These workers were often paid very low wages due to the lack of government regulation and the abundance of available labor, which kept wages suppressed.

💡Philanthropy

Philanthropy is the act of promoting the welfare of others, typically through the donation of money to good causes. Andrew Carnegie's 'Gospel of Wealth' is mentioned in the video as a way he attempted to mitigate the harsh realities of his business practices by giving away a significant portion of his wealth to various social causes.

💡Robber Barons

The term 'robber barons' is used to describe the wealthy and powerful industrialists of the Gilded Age who amassed their fortunes through often ruthless and exploitative business practices. The video contrasts this term with 'captains of industry', highlighting the debate over the legacy of these figures in American history.

Highlights

The rise of industrial capitalism in America during the Gilded Age.

The shift from small, locally owned businesses to large corporations and trusts dominating industries.

John D. Rockefeller's use of horizontal integration to control almost 90% of the oil industry.

Andrew Carnegie's approach to vertical integration in the steel industry.

The expansion of American industries into foreign markets and resources.

The influence of industry leaders on the push for American imperialism.

The wealth accumulation of industrialists due to laissez-faire government policies.

Reliance on underpaid laborers, including immigrants, women, and children.

The application of Social Darwinism to justify business practices and economic disparity.

Carnegie's Gospel of Wealth and his philanthropic efforts to give back to society.

The contrasting titles of 'captains of industry' and 'robber barons' to describe industrial leaders.

The lack of governmental regulation on wages and working conditions.

The competition elimination strategy through business consolidation.

The moral ambiguity surrounding the wealth accumulation of industrialists.

The potential for viewers to form their own opinions on the legacy of industrial leaders.

The historical context of the Gilded Age as a period of economic growth and social challenges.

The role of immigration in the labor force and its impact on wages and working conditions.

The potential for viewers to subscribe for more APUSH review content.

Transcripts

Well hey there and welcome back to Heimler’s  History. We’ve been going through unit 6 of  

the AP U.S. History curriculum and in this video  we’re going to talk about the rise of industrial  

capitalism in America. So if you’re ready to  get them brain cows milked, let’s get to it.

So as I said in the last video, industrialism  describes the change in the way things are made  

for sale, specifically the move toward mass  production and mass consumption of goods.  

And generally, historians call this period of  American history The Gilded Age. If something is  

gilded that means it’s covered in gold. But to say  something is gilded tells you nothing about what’s  

underneath the gold. In my estimation, the Gilded  Age was something akin to a gold covered turd. In  

this video we’re going to talk about the gold, and  in the next video we’ll talk about the turd below.

So during the Gilded Age in the late 1800s  small, locally owned businesses basically became  

obsolete and defunct due to the rise of large  corporations and trusts that eventually dominated  

entire industries, especially the railroad,  steel, and oil industries. Now I talked a good  

deal about the railroads in the last video,  so here let me just focus on oil and steel.

In the oil industry, the name you need to  know is John D. Rockefeller. He was the  

owner of Standard Oil, and as the company grew  he made many shrewd business moves that forced  

his competitors to sell their companies to him,  thus eliminating the competition. By the late  

1880s Standard Oil controlled almost 90% of the  oil industry. Now this particular practice of  

consolidation was called horizontal integration,  and by definition, this just means that one  

company eventually buys out all its competitors  until there is effectively no competition left.

In the steel industry, the name you need to  know is Andrew Carnegie. Carnegie was, like  

Rockefeller, a shrewd businessman and grew his  company to the point where it dominated the steel  

industry, except Carnegie didn’t consolidate  his interests through horizontal integration,  

he was more of the vertical integration  persuasion. Vertical integration is when  

a company acquires all the complementary  industries that support its business. For  

example, over time Carnegie was able to buy  up companies that handled all parts of steel  

production from mining companies to processing  companies to distribution companies. Again,  

that means complete domination of the  industry with little room for competition.

Now these industries and others like them  grew so big and so powerful that they  

began increasingly looking outside the United  States to gain control over foreign markets and  

resources. At the end of the century American  is going to have the opportunity to become an  

empire by acquiring overseas territories,  and we’ll talk an awful lot about that  

in another video. But here it's enough to  know that many Americans had no interest  

in America becoming an empire since, after  all, no small part of our birth narrative  

as a country had to do with breaking away from  an empire. However, that was not the case with  

these industry leaders. They looked abroad  into places like the Pacific Rim and Asia  

and Latin America and could see the opportunity  to acquire new markets to sell stuff to people  

and new places from which they could acquire  natural resources. So the impetus for empire  

in America is going to include a significant  influence from these leaders of industry.

At this point you can start to see the gold  wearing thin and the turd is starting to peek out,  

but we’re going to cover that right back up  and deal with it in the next video. Now both of  

these men, and the others who followed similar  practices grew fabulously wealthy during this  

time. And there were several reasons they were  able to get away with these kinds of practices.

The first reason was the proliferation of  laissez faire government policies. As I’ve  

mentioned before, laissez faire, when  being translated, means something like  

“let alone.” And so politicians during this  time almost had an allergic reaction to any  

government intervention or regulation over these  business practices. And it could be that these  

politicians really believed that government  regulation was harmful to the noble principles  

of free enterprise. Or maybe it was that guys  like John D. Rockefeller kept stuffing buttloads  

of money in their pockets to keep them from  passing regulations. You know, potato, potahto.

The second reason these men were able to grow  so wealthy is because they relied heavily on a  

large pool of underpaid laborers like immigrants,  women, and children. I mentioned in a previous  

video that during this period there was  a huge influx of immigrants from Europe,  

and while some of them settled in the west,  the vast majority of them streamed into  

urban industrial centers looking for work. They  were vastly underpaid, and again, there was no  

governmental regulation on wages, and they weren’t  able to ask for higher wages because if they did,  

there were ten other immigrants looking for jobs  who would work at the lower wage. Additionally,  

factory owners realized that in this age of  unskilled labor they could employ women and  

children to work the machines as  well. And they didn’t hire women  

because they were all progressive and  waving the flag of gender equality. No,  

they discovered that they could employ women and  pay them about a quarter of what they paid men.

The third reason these kinds of business  practices were tolerated was because of  

the application of Social Darwinism  to economics. Now in case you forgot,  

Social Darwinism is similar to biological  Darwinism. In nature, the strong eat the  

weak and it’s all survival of the fittest. Social  Darwinism argued that if that’s how nature works,  

why not apply that to society? Strong nations  should eat weak nations. And in this case,  

strong companies should eat weak companies, as is  the way of nature. And in that way, these folks  

argued, the world’s wealth would be concentrated  into the hands of those who were deemed fittest.

Now all of these were standard practices  for men like Rockefeller and Carnegie,  

and those who followed their example. However,  Carnegie mitigated these brutal practices  

through what he called the Gospel of Wealth.  Carnegie argued that those with extraordinary  

wealth had a duty from God to invest their  wealth back into society through generous  

acts of philanthropy. And this wasn’t just a  philosophical argument for him: Carnegie gave away  

something like $350 million to build libraries and  concert halls and universities. So in that way,  

Carnegie had a little more gold than  turd, and you know, small victories.

Now you’ll often hear guys like Carnegie  and Rockefeller and Collins Huntington  

and Mark Hanna referred to by one of  two titles. Some folks refer to them  

as captains of industry. And, of course,  that title presupposes a favorable opinion  

of them and their practices. On the other  hand, you might hear them referred to as  

robber barrons. And that would be the more  negative connotation of their contributions  

to American society. And the decision on which  label is more appropriate, I’ll leave to you.

Thanks for watching, and if  you need more help on Unit 6,  

then click right here. Additionally if you need  more help getting an A in your class and a five  

if you want to consolidate Heimler’s History  as the industry of your APUSH review world,  

then go ahead and subscribe and I shall  keep making videos for you. Heimler out.