Lecture 3: The Threshold of Unparalleled Success

During the time after the Civil War and continuing into the early 1900s, business growth and business values drove the country. This lecture explains the intellectual basis for the American philosophy of free enterprise, and then looks at growth in several key industrial sectors. It concludes by considering the type of individuals who provided leadership for America during this time.

Introduction	The growth of industry is key to the development of modern America. All the other early topics of the course—settlement of the plains, immigration, and populism—all hinge somehow on the growth of industry.
Free Enterprise	The American philosophy of business is free enterprise. The origins of this American philosophy, however, lie mainly in ideas brought over from Britain. The frontier tradition may have been important, but key economic ideas came from Charles Darwin, Adam Smith, Herbert Spencer, and William Graham Sumner.
Expansion & Consolidation of American Business	Through a variety of corporate devices, business in the U.S. consolidated both vertically and horizontally. Consolidation came simultaneous with expansion, as illustrated in the following industries: railroads, petroleum, steel, and communications. Some have called the leaders of this consolidation “robber barons,” while others have called them “industrial statesmen.”
Expansion & Consolidation in Key Industries	Business consolidation proceeded in different ways and produced different results, for both companies and consumers, in different sectors. The railroad, petroleum, steel, and communication industries were important ones that illustrate many of the possibilities of expansion and consolidation in the late 19th Century.
Labor Unions	The growing power of business prompted labor to organize. Some distinctions to understand include skilled v. unskilled labor and craft v. industrial union organization. Collective bargaining was central to the organization of the American Federation of Labor, under its practical leader, Samuel Gompers.
Carnegie & Gompers: Two Paths	Carnegie & Gompers, despite common working-class origins, took different paths—one to become a captain of industry, fiercely acquisitive, and yet in his later years, a great philanthropist; the other to become an organizer of labor, a Marxist at heart, but moderate in practice.

Assignments
Tocqueville	Read and discuss Chapter 18, “Equality Suggests to the Americans the Idea of the Indefinite Perfectibility of Man.” Americans, with their revolutionary heritage and frontier background, are great believers in progress, in the idea that things are getting better and better. Chapter 18 pertains to this American belief in progress—a basic value of industrializing America. · What is the doctrine of human perfectibility? · Give of an example of this doctrine affecting modern life in America. Then read and discuss Chapter 34, “How an Aristocracy May Be Created by Manufactures.” In Chapter 34 Tocqueville is writing about the economic concepts of, to use modern economists' terms, division of labor and economy of scale—also essential assumptions for industrial America. · What is division of labor, the organization of work in industry that Tocqueville is talking about? · How does division of labor engender a new aristocracy? · Is the aristocracy of manufacturing a dangerous aristocracy?
WWW	You're invited to visit the James J. Hill House maintained by the Minnesota Historical Society
	Spend some time with inventor and industrialist Alexander Graham Bell, American Memory, Library of Congress
	Consider The Way We Worked, courtesy of the National Archives

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