Lesson 24: Industrial Entrepreneurs or Robber Barons?

This lesson focuses on a group of nineteenth-century industrial entrepreneurs described in many history books as Robber Barons. It calls upon students to analyze the activities of these entrepreneurs in order to draw conclusions about the innovations and business practices for which they are known. To carry out this analysis, the students examine techniques of mass production, division of labor and vertical and horizontal integration, noting their effects on industrial output and other outcomes. They also read a case study on John D. Rockefeller and discuss the characterization of him as a Robber Baron. The nineteenth-century industrialists often described as Robber Barons include Andrew Carnegie of Carnegie Steel, John D. Rockefeller of Standard Oil, and Cornelius Vanderbilt, a railroad magnate. (The term Robber Baron was first used in a history book published by Matthew Josephson in 1934.) Accumulating great wealth through entrepreneurial activity and innovation, these men became recognized leaders in industry and business circles, known particularly for business consolidations on a large scale and for focusing sharply on innovative management practices. Their achievements yielded benefits and costs. The benefits flowed from a new emphasis on improving efficiency in the workplace. Innovators achieved this emphasis by replacing decentralized methods of production with mass production, developing specialized production techniques and cutting production costs through vertical and horizontal integration. The costs, also flowing from an emphasis on efficiency, included certain harmful effects of monopoly practices and conditions affecting workers.

Concepts:

Benefits, Costs, Entrepreneurs, Horizontal integration, Mass production, Property rights, Vertical integration
National Content Standards in Economics:
  • Standard #6: Specialization
  • Standard #14: Entrepreneurship