Glossary

Adam Smith

In The Wealth of Nations (1776) Smith presented a theory purporting to explain how a free economy worked and also prescribed government's role in that economy. Acceptance of his "invisible hand" theory of supply and demand led to the policy of laissez-faire.

American Federation of Labor

The American Federation of Labor, unlike the Knights of Labor, accepted industrial capitalism but rejected reform and partisan politics. Led by Samuel Gompers, it concentrated on practical, reachable goals such as higher wages, shorter workdays, and improved working conditions.

Carroll D. Wright

Wright was among the first to recognize the importance of the family economy, but his belief that the factory system tended to destroy the family was probably false.

Drake's folly

Edwin L. Drake and businessman George Bissell tapped the first oil well in Titusville, Pennsylvania. Commonly called "Drake's folly," it marked the start of the petroleum industry.

family economy

The most important factor in determining the economic well-being of a working-class family was how many members of the family worked. Fathers and sons, mothers and daughters, and others all contributed to the family economy.

George Westinghouse

Westinghouse's air brake made longer, faster trains possible, thus revolutionizing railroad transportation. He also developed an alternating current system for transmitting electricity. They were two of many technological innovations associated with economic modernization.

gospel of wealth

Along with Social Darwinism, the gospel of wealth provided an intellectual justification for the new economic order.

Horatio Alger

This novelist wrote stories about heroes who rose from poverty to comfortable middle-class comfort through a combination of diligence and good luck. His novels illustrate how popular literature reinforced the idea that America was a land of opportunity where success always came to those who deserved it.

Knights of Labor

The Knights of Labor, led by Terence V. Powderly, failed to achieve its goal of complete worker solidarity. Like the earlier National Labor Union, it rejected industrial capitalism and aspired to reform society.

Russell Conwell

Among the most effective apologists for the wealthy were religious leaders like Russell Conwell, who delivered his "Acres of Diamonds" speech about 6000 times between 1861 and 1925.

Santa Clara County v. The Southern Pacific Railroad

This Supreme Court decision ruled that a corporation was a "legal" person entitled to all protections granted by the Fourteenth Amendment.

scientific management

Frederick W. Taylor laid the foundations of scientific management. His time and motion studies aimed at improving the efficiency of workers by controlling wasted motion. Although he intended his work to benefit both labor and management, it promoted monotony and displaced higher-paid workers.

Social Darwinism

Social Darwinists like Herbert Spencer and William Graham Sumner applied the biological concepts of Charles Darwin to society.

vertical integration

Corporate leaders like Andrew Carnegie used this business strategy to gain a competitive edge. It entailed controlling the raw materials used by a business as well as the transportation facilities needed to distribute its products. Vertical integration lowered final prices by cutting out profit taking by suppliers and shippers.

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