The Rise of Big Business

The rise of the modern corporation led to a surge in economic productivity between 1869 and 1910.

Following the Civil War, a new economy emerged in the United States that was dependent on raw materials from around the world and that sold goods in global markets. The new industries were based on inventions such as steam-powered manufacturing, the railroad, the electric motor, the internal combustion engine, and the practical application of chemistry.

Business organization expanded in size and scale with a significant increase in factory production and mechanization. By 1900, the major sectors of the nation's economy—banking, manufacturing, meat packing, oil refining, railroads, and steel—were dominated by a small number of giant corporations owned by a new class of millionaires.

The emergence of the modern corporation led to many positive developments. Through mechanization, standardization, and economies of scale, productivity grew substantially. Between 1890 and 1929, the average urban worker put in one less day of work a week and brought home three times as much in pay. Families enjoyed comforts and conveniences that had not existed. By 1929, nine out of ten Americans had electricity and indoor plumbing; four-fifths had automobiles; two-thirds had radios; and nearly half had refrigerators and phonographs.

Yet the rise of big business also raised problems. Corporations were accused of exploiting workers, corrupting the political process, and producing poorly-made, unsafe products. Corporate power might allow companies to fix prices and influence government decision-making.

Source: The Rise of Big Business
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