Second Industrial Revolution

Big Business=Increase in...

Scale: wider geographical distribution of output-push products out further and further (in the world)=produce more and more=economy scale gets greater and greater. Scope: variety of economic functions performed-take products to consumer and train them to create safe products. Bureaucracy: impersonal codified procedures- big organization that go through steps that are necessary to secure/make their product COMPETITION

Second Industrial Revolution

Secondary Industrial Revolution was a period between 1870-1900 that was developed by the Trans-Mississippi Expansion and available railroads that opened up the country further west which allowed markets to expand and monopolies to form. This period was an age of newly formed capital, technologies, business/industry, and other opportunities for the US to develop into a mature industrial society, second to Great Britain. This also allowed big business or monopolies to be empowered.

National integrated mass market

Transportation infrastructure created (Railroads) national integrated mass market for manufactured goods while expanding the US steel industry= more mining for steel. RR: nations' transportation, privately owned-need a set time Telegraphs: first communication-male dominated trade-mainly used for business information. Four Time Zones: to match times of telegraph and trains that carried products (know when products arrive) More Consumers: population growth from 40 - 60 million between 1870 and 1890 Vertical integration: method employed by companies to control the cost of production, by gaining ownership of all parts of the manufacturing process from raw materials through transportation and marketing. Marketing: new form of marketing/advertisement="chain stores"/ "mail order houses"= expansion of postal service

Steel

a superior material, more resistant, but not possible to make in large quantities until... Bessemer Process which makes large quantities of steel without having to pay skilled men for higher wages. Andrew Carnegie first industrialists to unite all stages of production of steel RR rails in one factory= he meets the goal of economies of scale and vertical integration

Big Business

Limited liability -share stocks are held under that business to expand and become "big" stock gives you limited liability; you lost only the money you invested in the business unit.

Significance of Second Industrial Revolution

integration, "anti trust" regulations aimed at preventing monopolies and allowing medium-sized firms to remain competitive in the market. Also approach for US to become a more mature industrial society.

Trust Problem

seeks to restrict competition and achieve a monopoly in a industry by taking over competitors. Allowed a group of companies to combine and operate as a single unit= rid of competition for customers= raise market prices and gain near-monopoly power.(any giant corporation that dominated a sect of the economy and wielded monopoly power) Monopolies are dominant because they have reached economies of scale=knock out competition.

Great Commodity Price Deflation

small farms went into foreclosure and bankruptcy because of competition in prices (couldn't keep up with price deflation) mechanization=new technology=debt if economies of scale not met. bigger business=cheaper goods=more consumption

Economies of scale

the bigger your productive capacity is, the lower the prices of your products (the more=the less). Manufacturers exploit this in order to defend their profits during world-wide commodity price deflation.

Big Business incentives to...

vertical and horizontal integration