The U.S. Industrial Revolution Early 20th century Mr. Raffel 20th Century American History Consider the Humble Apple iPod • So sophisticated • So convenient • Mine has 5,000+ songs How did that iPod make it into your backpack? • In writing, please explain all the steps an iPod would travel until someone buys it. Modern Capitalism Depends On: Production: Distribution: Consumption: Raw Materials Machines Advanced Adequate Technology markets Skilled Workers Transportation Factories (Railroads) Role of Energy Advertising Electricity Govt. role? Marketing Corp. Structure Access to Capital The Industrial Revolution • Event in U.S. history, starting in the late 19th century- continuing today • Definition: Shift in manufacturing from hand to machine production • Movement of people and workers from rural farms to urban factories • Production occurs in factories, not homes • Transformed the way we live I.R. Origins in U.S. • Started in late 18th century England, but rapid expansion of industry did not happen here until during/after Civil War. • Demands of Civil War--need to cloth, arm and supply soldiers led to growth of industry • Republican (party) willing to use govt to promote economic growth • Business boom due to war profits and new generation of business leaders Factors Behind the U.S. Industrial Revolution • Abundance of land and natural resources • Excellent natural and man-made transportation • New ways to organize work and companies • Invention/Innovation-creation of new technologies • Increased supply of labor (workers) About the Factors… • Each factor of production had advantages and disadvantages for society • Government policy promoted the development of several of these factors • Factors are often related to each other • We will look at some of these factors in more detail…. Transportation: The Railroads • Benefited from government land grants and financial aid – Ex: Union Pacific got 12 million free acres of land and $27 million in govt. bonds • Politicians worked closely with railroads--not always honestly – Central Pacific spent $200,000 in bribes to get 9 million acres of free land and $24 million in bonds Corporate Organization • Rockefeller, Carnegie and Morgan transformed industries – Rockefeller’s horizontal integration (oil industry)- buy your competitors – Carnegie’s vertical integration (steel industry)- control all facets of production – Morgan-revolutionized investment banking by popularizing stocks – What advantages and disadvantages did these innovations create for American society? (please answer in writing) John D. Rockefeller, Andrew Carnegie, and James Pierpont Morgan: Filthy Rich! Technology • The Bessemer Process – Device that allowed manufacture of high quality, low priced steel – Made railroad construction possible – Other refinements in steel made steel for bridges, buildings, subways, factory machines • Increased steel production made new products possible (supply impacts demand) • Edison’s development of electricity allows new ways to make and use products The Infamous Bessemer Converter Hi! My name is Thomas Edison. Thanks to me, you don’t have to do your homework by candlelight! Labor Supply: Immigration • As manufacturing was born, immigrants flocked to the U.S. in search of jobs and opportunities. • Between 1870-1920, nearly 16 million “New Immigrants” came to the U.S. from Southern and Eastern Europe; more than 500,000 immigrants arrived from Asia as well. • What challenges would face any new immigrant arriving in the U.S.? (Then and now) Cities and the Industrial Revolution • Urbanization is often linked to industrialization, although immigration also helped these cities grow • In 1900, just three U.S. cities (New York, Chicago and Philadelphia) had populations over 1 million; by 1930 ten cities (including Boston) did. • What problems would rapid growth of cities create? (please answer in writing) Relationship Among the Factors • Railroad tracks made possible by new science (Bessemer process) • Lead to new business organization (monopoly) that benefits investors and attracts capital • Impact: improved transportation expands markets for products • Track laying creates jobs for immigrants, demand for labor Benefits of Industrialization • Makes our modern way of life possible • Large Corporations • Manufacturing and technology allows for job specialization and higher productivity • Advanced transportation unites country into a single market Problems of Industrialization • Wealthy companies, very poor workers • Living conditions for immigrants/city residents often very poor • Local and state governments often corrupt • Working conditions in factories often dangerous, unsanitary • Widespread use of child labor, very weak labor unions • This is the agenda for the Progressive Era! .