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The Rise of INDUSTRIAL CAPITALISM [APUSH Review Unit 6 Topic 6] Period 6: 1865-1898 - YouTube
Channel: Heimler's History
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Well hey there and welcome back to Heimler’s
History. We’ve been going through unit 6 of
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the AP U.S. History curriculum and in this video
we’re going to talk about the rise of industrial
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capitalism in America. So if you’re ready to
get them brain cows milked, let’s get to it.
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So as I said in the last video, industrialism
describes the change in the way things are made
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for sale, specifically the move toward mass
production and mass consumption of goods.
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And generally, historians call this period of
American history The Gilded Age. If something is
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gilded that means it’s covered in gold. But to say
something is gilded tells you nothing about what’s
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underneath the gold. In my estimation, the Gilded
Age was something akin to a gold covered turd. In
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this video we’re going to talk about the gold, and
in the next video we’ll talk about the turd below.
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So during the Gilded Age in the late 1800s
small, locally owned businesses basically became
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obsolete and defunct due to the rise of large
corporations and trusts that eventually dominated
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entire industries, especially the railroad,
steel, and oil industries. Now I talked a good
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deal about the railroads in the last video,
so here let me just focus on oil and steel.
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In the oil industry, the name you need to
know is John D. Rockefeller. He was the
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owner of Standard Oil, and as the company grew
he made many shrewd business moves that forced
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his competitors to sell their companies to him,
thus eliminating the competition. By the late
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1880s Standard Oil controlled almost 90% of the
oil industry. Now this particular practice of
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consolidation was called horizontal integration,
and by definition, this just means that one
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company eventually buys out all its competitors
until there is effectively no competition left.
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In the steel industry, the name you need to
know is Andrew Carnegie. Carnegie was, like
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Rockefeller, a shrewd businessman and grew his
company to the point where it dominated the steel
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industry, except Carnegie didn’t consolidate
his interests through horizontal integration,
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he was more of the vertical integration
persuasion. Vertical integration is when
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a company acquires all the complementary
industries that support its business. For
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example, over time Carnegie was able to buy
up companies that handled all parts of steel
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production from mining companies to processing
companies to distribution companies. Again,
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that means complete domination of the
industry with little room for competition.
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Now these industries and others like them
grew so big and so powerful that they
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began increasingly looking outside the United
States to gain control over foreign markets and
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resources. At the end of the century American
is going to have the opportunity to become an
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empire by acquiring overseas territories,
and we’ll talk an awful lot about that
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in another video. But here it's enough to
know that many Americans had no interest
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in America becoming an empire since, after
all, no small part of our birth narrative
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as a country had to do with breaking away from
an empire. However, that was not the case with
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these industry leaders. They looked abroad
into places like the Pacific Rim and Asia
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and Latin America and could see the opportunity
to acquire new markets to sell stuff to people
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and new places from which they could acquire
natural resources. So the impetus for empire
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in America is going to include a significant
influence from these leaders of industry.
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At this point you can start to see the gold
wearing thin and the turd is starting to peek out,
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but we’re going to cover that right back up
and deal with it in the next video. Now both of
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these men, and the others who followed similar
practices grew fabulously wealthy during this
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time. And there were several reasons they were
able to get away with these kinds of practices.
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The first reason was the proliferation of
laissez faire government policies. As I’ve
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mentioned before, laissez faire, when
being translated, means something like
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“let alone.” And so politicians during this
time almost had an allergic reaction to any
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government intervention or regulation over these
business practices. And it could be that these
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politicians really believed that government
regulation was harmful to the noble principles
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of free enterprise. Or maybe it was that guys
like John D. Rockefeller kept stuffing buttloads
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of money in their pockets to keep them from
passing regulations. You know, potato, potahto.
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The second reason these men were able to grow
so wealthy is because they relied heavily on a
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large pool of underpaid laborers like immigrants,
women, and children. I mentioned in a previous
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video that during this period there was
a huge influx of immigrants from Europe,
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and while some of them settled in the west,
the vast majority of them streamed into
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urban industrial centers looking for work. They
were vastly underpaid, and again, there was no
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governmental regulation on wages, and they weren’t
able to ask for higher wages because if they did,
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there were ten other immigrants looking for jobs
who would work at the lower wage. Additionally,
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factory owners realized that in this age of
unskilled labor they could employ women and
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children to work the machines as
well. And they didn’t hire women
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because they were all progressive and
waving the flag of gender equality. No,
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they discovered that they could employ women and
pay them about a quarter of what they paid men.
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The third reason these kinds of business
practices were tolerated was because of
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the application of Social Darwinism
to economics. Now in case you forgot,
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Social Darwinism is similar to biological
Darwinism. In nature, the strong eat the
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weak and it’s all survival of the fittest. Social
Darwinism argued that if that’s how nature works,
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why not apply that to society? Strong nations
should eat weak nations. And in this case,
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strong companies should eat weak companies, as is
the way of nature. And in that way, these folks
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argued, the world’s wealth would be concentrated
into the hands of those who were deemed fittest.
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Now all of these were standard practices
for men like Rockefeller and Carnegie,
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and those who followed their example. However,
Carnegie mitigated these brutal practices
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through what he called the Gospel of Wealth.
Carnegie argued that those with extraordinary
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wealth had a duty from God to invest their
wealth back into society through generous
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acts of philanthropy. And this wasn’t just a
philosophical argument for him: Carnegie gave away
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something like $350 million to build libraries and
concert halls and universities. So in that way,
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Carnegie had a little more gold than
turd, and you know, small victories.
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Now you’ll often hear guys like Carnegie
and Rockefeller and Collins Huntington
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and Mark Hanna referred to by one of
two titles. Some folks refer to them
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as captains of industry. And, of course,
that title presupposes a favorable opinion
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of them and their practices. On the other
hand, you might hear them referred to as
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robber barrons. And that would be the more
negative connotation of their contributions
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to American society. And the decision on which
label is more appropriate, I’ll leave to you.
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Thanks for watching, and if
you need more help on Unit 6,
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then click right here. Additionally if you need
more help getting an A in your class and a five
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on your exam in May, you can click here and
grab my Ultimate Review Packet. And lastly,
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if you want to consolidate Heimler’s History
as the industry of your APUSH review world,
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