Business Philosophy The idea that the government should not interfere with economic development, or specific businesses, is known as Laissez-faire. This idea originated with British economist Adam Smith and was published in 1776 in The Wealth of Nations. He believed that the laws of supply and demand, combined with profit motive, would be the most efficient type of economy. Many business leaders in the 1800s echoed these sentiments and wanted the government to leave their businesses alone..
Social Darwinism stated that success in society was determined by "survival of the fittest." This interpretation of Charles Darwin's theory caused many to believe that the poor were deceitful and lazy, while the rich were honest and hard-working. This also explained how healthy businesses thrived while unhealthy ones went bankrupt.
As the rich became wealthier, and the poor more so, people began to question these philosophies, and some even attacked leading industrialists calling the Robber Barons, while others maintained that they were Captains of Industry
Thieves or Great Leaders?
With the incredible success of large corporations and trust, several crafty businessmen became unbelievably wealthy. These ultra-rich capitalists gave the time period its name, the Gilded Age, because of their extravagant lifestyles.
Some citizens thought they were the "Captains of Industry" because the men helped create the modern economy based on business and industry. Critics called them "Robber Barons" because of the ruthless way these corporate executives tried to destroy all competition and keep wages low. After the depression of 1873, many large manufacturers began to drive smaller companies out of business and take over those companies. Sometimes corporations would join together, instead, forming a trust, completely controlling the production and sale of a product. Gaining complete control of a market is known as having a monopoly.
To illustrate this, consider that Andrew Carnegie emigrated to America with almost nothing. He ended up one of the richest men ever, controlling most of American steel production in the early 1900s. John D. Rockefeller controlled almost 90% of oil-related business in the nation. He was so powerful, he was able to force even the huge railroad companies to give him special rates. John Pierpont "J.P." Morgan,an investment banker worked with Rockefeller to accomplish such amazing exploits. As an example of their success, Morgan and Rockefeller, together in 1912, controlled over 100 corporations worth over $22 billion . They would be worth over $400 billion in 2003 money.