- Paperback: 162 pages
- Publisher: Wiley-Blackwell; 3 edition (December 9, 2005)
- Language: English
- ISBN-10: 0882952404
- ISBN-13: 978-0882952406
- Product Dimensions: 5.4 x 0.4 x 8 inches
- Shipping Weight: 5.6 ounces (View shipping rates and policies)
- Average Customer Review: 4 customer reviews
- Amazon Best Sellers Rank: #108,526 in Books (See Top 100 in Books)
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The Rise of Big Business, 1860-1920 (The American History Series) 3rd Edition
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About the Author
Glenn Porter is the Director Emeritus of the HagleyMuseum and Library, an internationally renowned research library inbusiness history and one of the leading American industrialmuseums. He is the author of numerous articles, chapters, andreviews, and the books he has written, co-authored, or editedinclude: Merchants and Manufacturers: Studies in the ChangingStructures of Nineteeth-Century Marketing (1971); Enterpriseand Economic Development: Essays in Canadian Business and EconomicHistory (1973); Regional Economic History: The Mid-AtlanticArea since 1700 (1976); The Encyclopedia of AmericanEconomic History (3 vols., 1980); The Workers’ Worldat Hagley (1981); The Papers of John D. Rockefeller, Sr.(1991); and Raymond Loewy: Designs for a Consumer Culture(2002). While on the faculty of the Harvard Business School, heserved as editor of the Business History Review, and he wasalso the general editor for two book series, at JAI press and atthe John Hopkins University Press.
Dr. Porter served on the editorial board of the JournalAmerican History, as President and Trustee of the BusinessHistory Conference, as Trustee of the Andalusia Foundation and ofthe WORLDESIGN Foundation, on the Department of theInterior’s advisory committee on National Historic Landmarks,on the National Aeronautics and Space Administration’sHistory Advisory Committee, and as President of the IndependentResearch Libraries Association. At Hagley, he headed the RegionalEconomic History Research Center before becoming Director of theHagley Museum and Library in 1984. He retired from that post in2002 and now enjoys life in New Mexico.
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Regions were islands in this big nation, but with the advent of railroads, the regional market became the national market. The development of stocks and bonds caused ownership to be more widely held, and for persons to sell their stake in firms. It also caused huge influxes of money for the new corporate structure.
Finally, scientific management also facilitated the development of big business, even with its cold and heartless ways.
I read this for a college course, so this book could be better reading. However, this does show the advent of big business in the United States.
The first topic that Porter examines is the nature of big business. He believes that it is particularly important to understand how the giant corporations that evolved during this period differed fundamentally from those that came before. Prior to the rise of big business, most business institutions in America were small, frequently family-run affairs; at most involving a partnership of a few men. They relied heavily on the personal integrity and prestige of these men in order to do business. These firms were capitalized in extremely small amounts and, consequently, had low fixed costs relative to operating expenses. Finally, they usually operated in limited, local areas and produced a very narrow range of goods and services.
Big business, however, represented a clean break from these traditions of the past. The new, large-scale enterprises were usually corporations, rather than partnerships; frequently characterized by a separation between ownership and control. These corporations were often typified by an anonymous, impersonal quality; a factor which contributed greatly to the public's mistrust of them. They had massive capital requirements and huge fixed costs (a significant barrier to entry which ensured reduced competition). Furthermore, they operated on a wide geographical scale and provided an array of products.
The next topic Porter looks at is the appearance and spread of big business. The first major enterprise of this type was, of course, the railroads, which achieved this status around 1860. This was a necessary condition for the rise of big business, since it could not thrive without a basic transportation system in place. The development of the telegraph system-and, later, the telephone-was also crucial to its coming.
Once these advances were in place, big business started to appear, slowly but sporadically. The corporations generally evolved through one of two methods: vertical or horizontal growth. A firm grew vertically by extending its operations backward and forward along its chain of supply and distribution. It would reach backward for raw materials and forward to the final consumers. This allowed corporations control over every facet of the production and marketing of their product. Horizontal growth, on the other hand, was where different producers who were all engaged in the same enterprise would join together to form a larger firm that served their collective interests. Initially, horizontal growth was achieved through use of the infamous, though short-lived, trust. This method was soon replaced by the holding company and, subsequently, the outright merger. Companies could, of course, integrate both horizontally and vertically, thus forming truly large and powerful businesses. This is how such familiar firms as Standard Oil, Swift and Company, Goodyear, US Steel, and American Tobacco came into prominence. (Among the forgettable failures were American Glue, National Starch, the United Button Company, and Standard Rope & Twine.)
By 1910, the industrial structure of the country had been forever altered, giving birth to the modern American economy. This radical change in society naturally caused great consternation in the minds of many Americans. Porter likens it to Turner's beliefs about the closing of the frontier. "The coming of giant corporations seemed to signal the end of an open, promising America and the beginning of a closed, unhappier society." The chief component of this dissatisfaction, Porter believes, was "the fear that the new economic order was destroying America's status as a land of opportunity." America had long been seen as a place where every man had the potential to acquire a business of his own, to be his own boss. With the advent of big business, the prospects of this were severely diminished.
Despite these fears, however, Americans gradually, if not eagerly, adapted to the new state of affairs. This transition was aided by rapid economic growth which resulted in a steadily increasing standard of living and a tremendous increase in the amount and variety of material goods. The rise of big business also resulted in the creation of a new role for government as "watchdog of the private sector." This was the spirit of progressivism finally exerting itself in the corporate world; something which Porter believes it rarely did. He views the rise of big business as not only being independent of the progressive movement, but bordering on the inevitable. As such, it was not so much a phenomenon of the Progressive Era as it was coincident to it.
"The Rise of Big Business" is recommended to anyone interested in American history since 1860.