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Capitalism in US History - Blackford & Kerr

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Blackford, Mansel D. and K. August Kerr, Business Enterprise in American History is the assigned reading.

You should try to integrate the historical discussion in Blackford & Kerr with the activities of at least two of the post Civill War industrial leaders. Try to show the individual contributions to industrial and administrative technology. Consider the conflict between the theory of pure competition developed by Adam Smith* and the arguments of the 19th century captains of industry who sought to control the markets, to eliminate needless duplication and wasteful competition. Discuss or appraise the extra-legal activity you read about, and show how this behavior either advanced or deterred industrial progress. Finally, to the extent that you are conversant with Wall Street activity from 1980 to the present, show how it relates or compares to the activities of the so-called robber barons.

* Robert Heilbroner has a succinct and very clear chapter on Adam Smith's theory in The Worldly Philosophers. This book is a paperback. It should also be readily available in most libraries. Excellent summaries of his views are also to be found on Google.

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OTA 105878/Xenia Jones

Adam Smith's Theory of Pure Competition & the Robber Barons

When Adam smith proposed his views on capitalism via his book 'The Wealth of Nations' (1776), his ideas were based on observable events of an Industrializing world. Philosophically, the enlightenment has brought to question practices and standards of the old regime and ideas of equality, competition and independence were brewing among the minds of philosophers, thinkers and even the most ordinary man. This was, after all the period that has given birth to America when the Founding Fathers came together to declare their views and their intention to unite and fight against what they saw as the abuses of the British Empire and their liege and monarchical overlord - the King. This was the period of Lockean ideals realized when the notion of 'All men created equal' and each writes his own destiny became the very seed of American identity. The monarchical divine right of Kings and nobles to govern man on earth has come into question via logic and reason and abuses of the monarchy, not just of nobles of England but also of France and even that of the Iberian peninsula sparked feelings of discontent among their people and, fuelled by the success of the American Revolution absolute monarchies in Europe soon gave in to new forms of governance and arrangements that balanced or took away the absolute power of the monarchy with a new document or charter known as the Constitution (hence the term - Constitutional Monarchy). These were dynamic times and its dynamism was further energized by discoveries in technological and mechanical breakthroughs. For instance, the creation of the steam engine changed the way goods were made and people travelled increasing capacity, flooding markets with goods, opening up room for employment and competition. The Industrial revolution created prominent trading groups, companies and businessmen whose enterprises have survived even to this day. For Adam Smith, the dynamics of mass production allows for the possibility of perfect competition. This happens when similar goods are made available in the market. Buyers, knowledgeable of the product & services they want to buy and avail can then choose from among these products and services according to a set of conditions that are very particular to their taste and capacity (i.e. inherent characteristics of products, availability, prices, etc.). Additionally, in a perfect market, there will be no restrictions so as to limit the reach of all providers to give advantage to a few. In this kind of market, where providers, sellers and consumers can ...

Solution Summary

The solution is an extensive 1,732-word essay that discusses the topic of free enterprise side by side with the actions (especially extra legal activities) of key business leaders and industrialist from the time of American Industrialism to the present. Key areas of Adam Smith's capitalism principle (the invisible hand) is related to the actions of the robber barons and a reflection of the development of capitalism-regulation throughout American Business history is presented to assess changes. The conclusion includes a discussion of recent financial illegal activities (WorldCom, Madoff Ponzi scheme) side by side with the success of capitalism in growth industries (I.T.) and the way corporations and new industry captains straddle ethics and the need for growth. references are listed for expansion. A word version of the solution is attached for easy printing.