Rise of Big Business

Summary

In this Crash Course episode, John Green explores the industrialization of the United States post-Civil War, highlighting the country's transformation from a largely agrarian economy to a global industrial leader. Key factors include the vast American geography, population growth driven by immigration, and legal frameworks like the Commerce Clause. The episode also discusses the rise of major industrial figures like Cornelius Vanderbilt and John D. Rockefeller, and the creation of modern corporations. It touches on the uneven distribution of wealth and the rise of labor unions, as well as the philosophical debates on social Darwinism and economic inequality.

Takeaways

• 😀 The U.S. became the richest and most industrialized nation after the Civil War, thanks to the introduction of national currency, massive contracts, and infrastructure development like the Transcontinental Railway.
• 😀 The U.S. had abundant resources, including coal, iron, and oil, which played a key role in fueling industrialization.
• 😀 Between 1870 and 1900, the U.S. population grew significantly, with a large portion of that growth coming from immigration, helping to fuel the industrial economy.
• 😀 The American legal system, including the Commerce Clause and patent protection, encouraged innovation and economic growth.
• 😀 The U.S. government's role in industrial growth included high tariffs, land grants to railroads, and policies that favored big businesses.
• 😀 Railroads were a critical component in the industrial success of the U.S., enabling mass commerce, establishing time zones, and creating modern corporations.
• 😀 The first major corporate tycoons, known as captains of industry or robber barons, rose to prominence through practices like monopolization and ruthless competition, including figures like Cornelius Vanderbilt and John D. Rockefeller.
• 😀 Vertical and horizontal integration were key strategies for controlling entire industries, as exemplified by companies like Standard Oil and U.S. Steel.
• 😀 The labor force faced harsh conditions during industrialization, with long hours, low pay, and unsafe working environments, leading to the rise of unions like the Knights of Labor and the American Federation of Labor.
• 😀 Social Darwinism, which misapplied Darwin’s theory of evolution to economics, was used to justify inequality and discourage government intervention in business, further entrenching the power of the wealthy.

Q & A

What role did the Civil War play in America's industrial growth?

The Civil War helped America's industrial growth by forcing the introduction of a national currency, boosting the finance system, and providing massive government contracts to arms and clothing manufacturers. It also improved communication through the telegraph and led to the creation of the Transcontinental Railway, all of which increased efficiency and productivity.

What are the three key factors that contributed to America's economic growth post-Civil War?

The three key factors are Geography, Demography, and Law. Geography provided the U.S. with abundant natural resources like coal, iron, and oil. Demography saw a population increase, largely driven by immigration, and Law, especially the Constitution and its Commerce Clause, helped establish a unified national economy.

How did railroads contribute to the industrialization of America?

Railroads were crucial as they increased commerce, integrated the American market, and facilitated the emergence of national brands. They also introduced time zones to standardize shipping schedules and played a role in the creation of the first modern corporations, requiring innovative organizational methods.

Who were some of the key industrial figures associated with the railroad industry?

Key industrial figures in the railroad industry included Cornelius Vanderbilt, who made a fortune through transportation and railroads, and Andrew Carnegie, who became a steel magnate, symbolizing the era's captains of industry.

What was the significance of vertical and horizontal integration in industrialization?

Vertical integration allowed firms to control all aspects of production, from raw materials to distribution, while horizontal integration involved large firms acquiring smaller competitors to eliminate competition. Both methods helped maximize profits and control entire industries.

What was the impact of John D. Rockefeller's Standard Oil on the oil industry?

John D. Rockefeller's Standard Oil controlled 90% of the U.S. oil industry by the late 1880s, which limited competition and drove gasoline prices up. The company used horizontal integration to dominate the market, and eventually, it was broken up by the Supreme Court into smaller companies, which later reunited to form ExxonMobil.

How did labor conditions during industrialization affect workers?

Labor conditions were poor, with workers typically working 60-hour weeks without pensions or injury compensation. Industrial injuries were common, and over 35,000 workers died on the job annually. These conditions led to the growth of labor unions, which fought for better working conditions, pay, and safety.

What was the Haymarket Riot, and how did it affect the labor movement?

The Haymarket Riot of 1886 occurred during a strike against the McCormick Harvesting Company when a bomb killed several police officers, and the police killed strikers. The event damaged the reputation of the Knights of Labor, leading to a decline in their influence, although the labor movement continued through the American Federation of Labor.

What is social Darwinism, and how did it relate to industrial capitalism?

Social Darwinism was a perversion of Darwin's theory, suggesting that only the 'fittest' people or companies survive and thrive in society. It was used to justify the lack of government regulation in business, promoting the idea that monopolies like those of Rockefeller and Carnegie were natural and beneficial.

How did the rise of corporations and industrial capitalism shape American society?

The rise of corporations led to a concentration of wealth and power in the hands of a few individuals, which sparked debates over inequality and the role of government in regulating business. The industrial revolution created vast wealth but also deepened economic divides, influencing discussions about freedom and the distribution of resources.