Free Post Civil War Economics Essay Sample
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The Civil War had a significant effect on the development of the American and the Caribbean economy. Prior to the war, the manufacturing industries were almost nonexistence, and businesses were carried out by the individual proprietors. There were only small businesses, and the existence of large corporations was yet to be witnessed. The Civil War increased a demand for manufactured goods for the soldiers who would stay in the battle field for months. This demand created a trade boom and a need to increase the manufacturing capacity. Many big multinational businesses in America today owe their very birth, development and existence to the American Civil War. For instance, the now giant Proctor & Gamble has its humble beginnings back to the early days of the Civil War. Two entrepreneurs who were then individual businessmen used to manufacture candles and other goodies to be used by the soldiers in the battlefield. Because the earlier businesses were small and were mainly trading businesses rather than manufacturing businesses, they did not require much capital to start and run. On the other hand, manufacturing and processing required a great capital, and very few business people could raise the capital needed to start a manufacturing plant. This led to merges of different businesses to create one bigger force and start such businesses. During and after the Civil War, the manufacturing sector of the economy was boosted by so much that it led to the industrial revolution in America. More people were to move to the cities where political and economic opportunities were much greater than in the rural areas.
As more manufacturing businesses came into force, the completion started to have a sour effect on the businesses. Different businessmen reacted differently to the situation. Some believed that the completion was a good thing for businesses and that it would lead to better improvements by the business and thus lead to improved standards. Others, on the other hand, believed that the completion was harmful to the businesses fraternity as a whole and that unnecessary completion should be purged out to make sure that the businesses could deliver their services and products to the masses at the cheaper prices. Mergers between businesses were achieved during that time in which horizontal mergers would happen between businesses at the same level of production to reduce completion. For instance, Procter & Gamble originally was two companies owned by two brothers-in-law whom their father-in-law advised to merge or they would drive each other out of business. These two brothers followed this wise advice and merged their businesses to make one bigger force that could withstand the completion from other businesses as well as eliminate the completion between themselves. These were not the only business merging, but there were many mergers happening at the time. Those businesses that did not heed this kind of advice perished in the ensuing completion. Later, other forms of mergers started to be implemented. These mergers were vertical in nature and involved the merging of businesses at different levels of the value chain. For instance, a bread manufacturer would merge with a wheat producer to reduce costs. More than just mergers and acquisitions, businesses formed trusts and alliances to reduce costs and more importantly to reduce completion among their selves. These mergers, trusts, and alliances were not welcomed by everyone, and some people saw them as enemies of the public. True to this claim, the mergers and trusts, despite being able to solve some of the problems that existed, such as unnecessary competition, were also bad because they got used to exploit the common citizens. These mergers and trusts led to the rise of the so called baron robbers who had selfish interests and did not care for the common citizen but did everything they could to take advantage of the people by overcharging their products. It is for this reason that the post Civil War period is associated with the social decadency and moral corruption.
These robber barons had no much difference with the corrupt and the selfish Wall Street officials of today who will risk a nation’s economy that supports millions just to enrich their selves. For instance, just like today, there were people who vehemently fought for the abolition of the monopolies and oligopolies that were holding the average consumer hostage. As Joram (2007) points out, in vain did many people cry out loud for the legislation of law that would inhibit the exploitive practices of such businesses. The robber barons who had already gained too much economic and political power and influence would not give way, and the exploitation of consumers continued to be a major theme in the economy. Even when there were legislations that would prohibit these organizations from the unlawful and immoral practice of the exploitation through mergers and trusts, the legislation would not be effective and would only collect dust on the shelves. Such legislations that allowed the investigation of businesses that were thought to be exploiting the consumers, included the Sherman Antitrust Act in 1890, would remain ineffective until such a time when ten years later, President Roosevelt came to governance and enforced the law. This legislation, as the title suggests, sought to prohibit businesses from joining or making trusts because this inhibited the healthy competition, thus allowing the businesses in such trusts to exploit the consumers.
The debate concerning the dangers of business trusts was one that did not create two but rather three sides. There were those who were completely against the formation of such trusts and even any form of businesses mergers and those who believed that such mergers and trusts were good not just for the business but for the consumers as well because the reduced competition would lead to reduced costs and thus more affordable goods. The third side was more realistic and realized that the mergers and trusts were neither entirely bad nor good. This third side recognized that the trusts were important in reducing unhealthy and unnecessary competition but that they were also destructive to a certain extent if they were in the wrong hands. As such, they pushed the legislation that would still allow mergers and trusts but that would also make sure that the businesses forming such mergers were not abusing them and that there was enough control (William, 2009). President Roosevelt, who was also an entrepreneur and a business person, believed that the formation of mergers and trusts were not entirely evil or bad but those reforms were necessary so as to prevent such trusts from exploiting the public.