Major belief in the late 1800s

“Social Darwinism”

“Survival of the fittest” in the business world People who are good at business will succeed

The businesses that “survived” were those that

killed their competition!

PROBLEM…

Entrepreneurs in the late 19th Century (1800s)

organized production to make increasing profit, leading to big business

REMEMBER…

Uniting companies in the SAME industry

Horizontal Consolidation

Merger ~ buy out other companies

Trust ~ group of people runs separate companies as one large corporation

One company controls an industry’s production, quality, wages, and prices

MONOPOLY

Caused by mergers/trusts Created in order to make more and more profit

Putting together companies from DIFFERENT industries

Vertical Integration

Buy out suppliers in order to control the quality & price of your product

Loss of competition leads to high prices

Effects of Monopolies

Poor working conditions

Monopoly ownersRobber Barons

Controlled the market to increase their own wealth

Didn’t share wealth with employees or consumers

Monopoly ownersRobber Barons

RESULT: wealth & resources were controlled by just a few people

Very few very wealthy people & many poor people

Examples…Robber Barons

U.S. Standard Oil

John D. Rockefeller

Examples…Robber Barons

Banking Industry

J.P. Morgan

Examples…Robber Barons

Carnegie Steel

Andrew Carnegie

1890~ Sherman Anti-trust Act

Government Response

Made monopolies illegal

Law was unsuccessful because it was not easy to enforce and was not upheld by the Supreme Court