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Unformatted text preview: World Economy (1873-1920s) 9/26/2007 01:58:00 PM Seven Characteristics (Continued in tab 2) Geographically broad based o Prior to 1873 China and Africa and Japan were mostly isolated economically This is when globalization truly started Pluralist o England was where the money was; they were the economic power prior to 1873 as well. Now the U.S. and Germany are beginning to challenge their economic power (post WWII the U.S. takes over as the world power in economic power) Technology o Technology is drastically changing economy; bringing factories into a much larger scale, ability to use coal power, engines of production are becoming larger, steel is challenging iron Rationalization and Concentration of business o Frederick Winslow Taylor in 1911 publishes a book Principles of Scientific Management Would go into factories and walk behavior of workers in the factories and create a specific workflow within a factory; increase efficiency in every worker possible o Trusts- a combo of firms that come together for the purpose of reducing competition and controlling market prices; note, not a monopoly which there is no competition o John D. Rockefeller (Oil) Standard Oil is formed in 1870 to eliminate oil cost and waste Would get rebates from railroads, cut out extra screws, rivets, etc. Looked to buy out competition outright; if they would not sell he would sabotage, price slash, whatever necessary to Turn the Screw Samuel C.T. Dodd looks to Turn Standard Oil into a legitimate trust and control American oil industry 37 shareholders put their shares into a trust of a board composed of 9 men. 37 companies were now 1. o Gustavus F. Swift and Andrew Chase Decided to slaughter and ship meat instead of trying to ship live cattle to the east coast; also would have distributors on the east coast to sell his goods (all to cut down on cost; integration) o Isaac Merrit Singer 1870s-1880s Singer opened up offices and stores to sell sewing machines exclusively o Vertical v. Horizontal Integration Controlling every aspect of your industry is vertical integration; production, shipping, selling etc Think Chase and his meat market Horizontal integration is domination in a wider market, not just one area Two Weak Attempts to Control Trusts Interstate Commerce Act 1887 o Put into effect the Interstate Commerce Commission which regulated Railroads (regulate railroads you regulate trade) Sherman anti-trust Act of 1890 o Finally enforced by Teddy Roosevelt in the 1900s o Brief law that vaguely describes monopolies; in a sense if you become...
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- Spring '08