The Importance Of Andrew Carnegie And The Rise Of Big Business

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During the late 19th and early 20th centuries, the strength of the U.S. economy began transitioning from agricultural to industry. A variety of factors sparked this industrial revolution, but the genius industrial leaders, particularly Andrew Carnegie, allowed big business to take over and dominate the economy. As evidenced in Andrew Carnegie and the Rise of Big Business by Harold C. Livesay, Carnegie mastered and understood the organizational structures and technological factors necessary to run a profitable business. However, he did not have the best relationship with his workers or labor unions. Andrew Carnegie’s success and influence paved the way for the sustained dominance of big business in the American economy. Carnegie did not have…show more content…
In the past, some businesses did not estimate their costs and would have no idea whether they would have profit or loss at the end of the year. Thanks to his experience at the Pennsylvania Railroad, Carnegie understood the importance of cost control. Tracking costs led to increased accountability because Carnegie could discover, “who saved material, who wasted it, and who produced the best results” (95). Knowing costs also allowed Carnegie to confidently charge low prices, understanding they would produce a profit. Additionally, he thought that if he kept costs low, profits would take care of themselves. One technique used to slash costs was speeding up individual operations to produce more goods per dollar of capital. Another technique was reducing labor costs while sustaining current production. These practices revolutionized big business because they began to focus on cutting excess costs that were hurting profits. Cost management improved the efficiency of labor and profits of…show more content…
Unfortunately, Carnegie and his cost cutting ways did not sit well with his workers. He made wages dependent on steel prices, meaning when prices went up, wages went up and vice versa. After he pushed Captain Bill Jones to cut wages, Jones warned him to “leave good enough alone. Don’t think of any further reductions” (145). Carnegie became so obsessed with keeping costs as low as possible, he didn’t consider that lower wages might affect the quality of his labor. Additionally Carnegie and Henry Clay Frick wanted to eliminate the labor union in a bargaining agreement. As a result, the workers went on strike. Carnegie wanted to, “always shut down and suffer. Let them decide by vote when decide to go to work” (153). Neither side budging resulted in the Homestead Strike of 1892. This strike became deadly when Frick called in Pinkerton agents to replace the work of the striking laborers. Once the laborers saw the Pinkertons, battle ensued and four guards died. Poor treatment of workers and subsequent strikes were common during the industrial revolution because many large companies focused exclusively on profits and not their workers. Workers and businesses rarely avoided conflict during the industrial

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