Lecture 3: The Industrialization of America


During the time after the Civil War and continuing into the early 1900s, business growth and business values drove the country. This lecture explains the intellectual basis for the American philosophy of free enterprise, and then looks at growth in several key industrial sectors. It concludes by considering the type of individuals who provided leadership for America during this time.



First we need to understand the concepts, the ideology, of American business expansion. Key concepts include: Adams Smith and the invisible hand; Darwinism and Social Darwinism; and the doctrine of laissez faire, the basis of free enterprise.

Expansion & Consolidation of American Business

Through a variety of corporate devices, business in the U.S. consolidated both vertically and horizontally. Consolidation came simultaneous with expansion, as illustrated in the following industries: railroads, petroleum, steel, and communications. Some have called the leaders of this consolidation “robber barons,” while others have called them “industrial statesmen.”

Labor Unions

The growing power of business prompted labor to organize. Some distinctions to understand include skilled v. unskilled labor and craft v. industrial union organization. Collective bargaining was central to the organization of the American Federation of Labor, under its practical leader, Samuel Gompers.

Carnegie & Gompers: Two Paths

Carnegie & Gompers, despite common working-class origins, took different paths—one to become a captain of industry, fiercely acquisitive, and yet in his later years, a great philanthropist; the other to become an organizer of labor, a Marxist at heart, but moderate in practice.

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“How Equality Suggests to the Americans the Idea of the Indefinite Perfectibility of Man”

Americans, with their revolutionary heritage and frontier background, are great believers in progress, in the idea that things are getting better and better. Chapter 18 pertains to this American belief in progress—a basic value of industrializing America.


·        What is the doctrine of human perfectibility?

·        Give of an example of this doctrine affecting modern life in America.


“How an Aristocracy May Be Created by Manufactures”

Here Tocqueville is writing about the economic concepts of, to use modern economists' terms, division of labor and economy of scale—also essential assumptions for industrial America.


·        What is division of labor, the organization of work in industry that Tocqueville is talking about?

·        How does division of labor engender a new aristocracy?

·        Is the aristocracy of manufacturing a dangerous aristocracy?


You're invited to visit the James J. Hill House maintained by the Minnesota Historical Society.

Film Review

Norma Rae

Unionization in southern textile mills.

North Country

A union story from northern Minnesota.

Book Review

Smith, The Wealth of Nations

The foundational work in the philosophy of free enterprise.

Chernow, Titan: The Life of John D. Rockefeller

Biography of the founder of Standard Oil.

Krause, The Battle for Homestead

Story of the great strike against Carnegie Steel in 1892.