You might not be expecting a history lesson in the middle of a course on environment, but have you ever wondered how we ended up in this mess in the first place? Where business interests are so harmful to the natural environment that we depend on? That making money automatically seems to come at the expense of the environment? In the next set of videos we explore how we ended up in the situation with business and environment in conflict and why such thinking persists even when it might seem obvious to you that things need to change. I want to take you back to the second industrial revolution that took place in the United States back in the times of the Wild West. Please understand that this isn’t a story about the US. But what happened there and then ended up changing business attitudes throughout the entire world until this day. The first industrial revolution took place in Europe from about 1720 to 1840 and was driven by the high cost of labor and comparatively low cost of energy. The high cost of labor made mechanization desirable to replace expensive workers, and replaced the small job shop with big industrial factories. People flocked to the cities for better paying jobs and it pushed children into the labor force. Interestingly, it is argued that an industrial revolution didn’t take place in China because it had the reverse situation - low cost of labor and comparatively high cost of energy. The second industrial revolution started took place in post-civil war in America. The homesteading act of 1862 gave any American or immigrant intending to become a citizen up to 160 acres of government land to . Eventually 1.6 million claims were spread across the vast prairies creating towns and new industry west of the mississippi. This was the time of the rise of the great railway companies in America and the first transcontinental railroad. This was an important turning point in business history. Prior to this time most organizations were relatively small and family controlled. These new railway and steel companies, with tens of thousands of employees were too big for family members to manage and they needed new forms of organizational control. This need gave rise to new organizational forms and the rise of the professional manager. The railways and the telegraph systems developed together by necessity. With single tracks and many trains, coordination was crucial. There were some tragic accidents that showed just how dangerous it was to have many trains on a single track. At first, stopwatches and timekeepers were used, but the telegraph allowed for much better coordination and control of the rail systems. The telegraph lowered the transaction costs of long distance communications enabling much greater organizational reach. A revolutionary technology came along in the form of the Sears catalog and the Sears business model which gave everybody access to consumer goods across America. In 1895 the Sears catalog was 532 pages long. You could buy everything in the Sears catalog - clothes, food, farming equipment, home-building kits, stoves, carriages, carts, liquor, cloth, books, along with many very unusual things you wouldn’t think of like the $18 Giant Power Heidelberg Electric Belt that advertised it could cure nervous disorders through electric shocks. [Confirm] America was unique in business history at this time because it was the largest homogenous market on the planet. Across this vast 3 million square mile country everybody spoke the same language, bought the same stuff with the same currency, with the same market rules. And they were glued together by the railroads and the telegraph system. These events take us up to about 1900 and a critical point in the relationship between business and the environment. This is just before the incredible explosion in human population when assumptions about the natural environment were burned into the psyches of american businessmen. Because the country was so big and the population density low, people assumed that energy, water and air were cheap, infinite and easily accessible, so there was no need to conserve. It was assumed that the country had infinite carrying capacity and so business and population could grow forever. And it was assumed that the environment was able to absorb all the waste of human industry. That humans only had a limited impact on the environment, so we could do whatever we want without needing to consider the impact on the environment. To give you an idea of how infinite resources seemed to people at the time consider the story of the bison. The herds of bison in the late 1800s were so large that they were called the thunder of the plains. About 30-60 million bison roamed the plains in enormous herds of hundreds of thousands of these massive animals. As the railroads expanded across the plains the trains would pass through these giant herds. Hundreds of men would climb to the top of the trains and shoot the bison for sport for hours and then drive on leaving behind a carnage of dead bison. It seems incredible today to think of doing this, but it gives you an idea of how people thought about the natural environment at that time.
