Moreover, tycoons such as the Vanderbilts were notorious for their lack of regard for the common worker. Although some states passed laws to regulate corrupt railroads, the Supreme Court made regulation on a state level impossible with the 1886Wabash case ruling, which stated that only the federal government could regulate interstate commerce.

Carnegie, Morgan, and U.S. Steel

Among the wealthiest and most famous captains of industry in the late 1800s was Andrew Carnegie. A Scottish immigrant, Carnegie turned his one Pennsylvanian production plant into a veritable steel empire through a business tactic called vertical integration. Rather than rely on expensive middlemen, Carnegie vertically integrated his production process by buying out all of the companies—coal, iron ore, and so on—needed to produce his steel, as well as the companies that produced the steel, shipped it, and sold it. Eventually, Carnegie sold his company to banker J. P. Morgan, who used the company as the foundation for the U.S. Steel Corporation. By the end of his life, Carnegie was one of the richest men in America, with a fortune of nearly $500 million.

Rockefeller and Standard Oil

Oil was another lucrative business during the Gilded Age. Although there was very little need for oil prior to the Civil War, demand surged during the machine age of the 1880s, 1890s, and early 1900s. Seemingly everything required oil during this era: factory machines, ships, and, later, automobiles.

The biggest names in the oil industry were John D. Rockefeller and his Standard Oil Company—in fact, they were the only names in the industry. Whereas Carnegie employed vertical integration to create his steel empire, Rockefeller used horizontal integration, essentially buying out all the other oil companies so that he had no competition left. In doing so, Rockefeller created one of America’s first monopolies, or trusts, that cornered the market of a single product.

Social Darwinism and the Gospel of Wealth

In time, many wealthy American businessmen, inspired by biologist Charles Darwin’s new theories of natural selection, began to believe that they had become rich because they were literally superior human beings compared to the poorer classes. The wealthy applied Darwin’s idea of “survival of the fittest” to society; in the words of one Social Darwinist, as they became known, “The millionaires are the product of natural selection.” Pious plutocrats preached the “Gospel of Wealth, which was similar to Social Darwinism but explained a person’s great riches as a gift from God

Regulating Big Business

Without any form of government regulation, big business owners were able to create monopolies—companies that control all aspects of production for certain products. Economists agree that monopolies are rarely good for the market, as they often stifle competition, inflate prices, and hurt consumers.

Popular pages: The Gilded Age & the Progressive Era (1877–1917)