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Difficulty: MediumRise of Industrial Capitalism and Business Consolidation

Source: Henry George, *Progress and Poverty*, 1879

'So long as all the increased wealth which modern progress brings goes but to build up great fortunes, to increase luxury and make sharper the contrast between the House of Have and the House of Want, progress is not real and cannot be permanent.'

Which of the following developments in the late nineteenth century best explains the conditions described in the excerpt?

  1. A
    The enforcement of mercantilist policies aimed at maintaining a favorable balance of trade for the British Empire.
  2. B
    The federal government's strict adherence to laissez-faire principles, which prevented any government intervention in the economy.
  3. The rapid consolidation of businesses into trusts and pools that concentrated wealth and market control.Answer
  4. D
    The successful nationalization of major industries led by Populist reformers in the federal government.

Answer

The rapid consolidation of businesses into trusts and pools that concentrated wealth and market control.
The correct answer is correct because the late nineteenth century was defined by the rise of corporate capitalism, where business leaders consolidated control over markets using corporate structures like trusts and holding companies. This process allowed massive accumulation of wealth by industrial titans (such as John D. Rockefeller and Andrew Carnegie) while leaving millions of industrial workers in poverty, creating the stark socioeconomic divide criticized by Henry George.

Step-by-Step Solution

1
Analyze the historical source.
Henry George's 1879 text highlights a growing disparity between the extremely wealthy ('House of Have') and the poor ('House of Want') despite rapid industrial progress.
Understanding the core argument of the stimulus is necessary to connect it to the correct Gilded Age development.
2
Evaluate the late nineteenth-century economic landscape.
The Gilded Age saw massive industrial expansion driven by business consolidation strategies, such as horizontal and vertical integration, which allowed companies to form powerful trusts and monopolies.
This establishes the historical context of corporate growth and wealth concentration.
3
Connect the stimulus to the correct historical cause.
The consolidation of businesses into trusts concentrated economic power and profits among a small class of industrial capitalists, directly causing the wealth gap George describes.
Linking the corporate structure to the unequal distribution of wealth provides the correct analytical answer.

Key Concept

Business consolidation and Gilded Age wealth inequality
Estimated Time:1m 30s
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Topics

Rise of Industrial Capitalism and Business Consolidation

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