Clio Speaks - Industrialization and the Rise of Big Business

Porter, Glenn. "Industrialization and the Rise of Big Business." The Gilded Age: Essays on the Origins of Modern America. Edited by Charles Calhoun. Wilmington, Delaware: Scholarly Resources, 1996, pp. 1-17.

The years between the end of the Civil War and the early twentieth century mark a period of profound economic transition. The antebellum economy, based on small economic units and 'republican' virtues, was replaced by a powerful new institution, the multinational corporation. The transition elicited anxiety in some Americans, who questioned the morality of corporate values. The greed and avarice commonly associated with the rise of big business and industrialization in the Gilded Age do not adequately explain the enormous success of corporations. A closer examination reveals that corporations utilized science and technology to provide modern America, defined as a consumer culture, with material goods. Americans, despite anxieties about corporate society, accepted the new industrial and corporate structures as the inevitable price of material prosperity.

The phenomenon of economic changes generally called industrialization has, in fact, numerous and complex meanings. Industrialization was not new to American life, but in the late nineteenth century, accelerated economic, social, and techological changes quickened the debate over the costs and benefits of progress, as defined by material prosperity, rising incomes, and improved transportation and communications. Prosperity was unevenly distributed and many groups, such as African Americans, Native Americans, and women, remained marginalized. Some rural Americans worried that industrialization would destroy American agricultural life. Agrarian political and reform organizations, such as the Grange, Populist party, and Greenbackers, grew as a result of worries that industrialization would destroy American agricultural life. Despite concerns, confidence in economic growth assured the advance of industrialization. Industrial firms that were not big businesss instituted the "American System" of manufacturers, a highly influential system of technological and organizational innovations, and which included mechanization and the factory system. Most of these industrial firms engaged in custom and batch production, the 'gentler fact of industrialization,' that preserved the artisanal tradition; reliance on skilled workers, catering to shifting fashion, and marketing flexibility. Custom and batch production embodied the American ideals of individualism, and American distrust of uniformity and standardization.

'Big business' was industrialization's harsher face. The fearsome "pools," "trusts," or "conglomerates," were industries led by powerful individuals such as John D. Rockefeller, J.P. Morgan, and Andrew Carnegie. The power of big businesses was due to their enormous size and capital, and more important, their structure and management. The railroad industry exemplified the economic and symbolic power of a national market, in which improved transportation and communication systems made big business expansion possible. The railroads provided new product manufacturers, such as Singer sewing machines, with strategies such as vertical integration, which combined two or more functions within a single firm. The expansion of the railroads created new forms of competition and hastened the interventionist role of government. The vague Sherman Antitrust Act of 1890 addressed the public's concern over the rise of big business, but by the beginning of the twentieth century, the economic culture of the United States was clear. Americans accepted the corporation as an acceptable, if not thoroughly admirable, part of the American economic and social landscape.