The American Fur Company
1.) Astor’s motive was second to none, he came to America with virtually nothing, yet it did not stop him from becoming the richest man in America at one point. He was highly self-motivated, mainly by profits and power. His managerial ability was also great as he was able to expand his trade operations and profit off of every piece of the industry. This however, was very unethical. TO explain, he gained profits through charging his employees high costs on clothing and sugar, profits of 300-400 percent, and even diluted the whiskey he sold them with water (51). He also used alcohol in negotiations with the Indians after Congress had banned alcohol on Indian territories. If this story teaches anything about the relationship between virtue and success, it’s that they do not always go hand in hand. Astor had little to no virtues, yet was able to become highly successful in the world of business.
2.) The environment of the company changed in the 1830’s with the belief that Cholera was spread through the trade. This had a negative effect on the trade. Also, new silk hats that didn’t require fur in their production were also driving down the demand of furs. During this time Congress also passed a law that banned alcohol on the Indian territories, which many people in the industry used to barter with the natives. Historical forces that are implicated in these changes include inequality, globalization, chance and nation state.
3.) Impacts on society were tremendous. In the dimension of the economic environment, profits soared and a monopoly was created as Astor was able to purchase furs at a fraction of the final selling price and since they were so light, he could transport them for cheap. The technological environment was affected through the invention of the steamboat that could travel up river faster to catch and transport beaver. The natural environment may have been affected the most with the depletion in population of beavers from over hunting and extermination of beavers to keep people like Astor away from parts of the country (Oregon). Government and the legal environment were also affected by the trade. Laws had to be passed to keep out Canadian and British fur trappers as well as a law that prohibited alcohol on the Indian territories.
4.) I think the most important stakeholders in the nineteenth century fur trade were the Indians. They may not have benefited the most from the trade, but they were that backbone of the entire operation. Astor was able to profit tremendously off the trade of trinkets and other cheap goods in exchange for furs he was able to ship and sell overseas for much higher price. When 17,000 of them were killed by the smallpox epidemic caused by the steamboat carrying them, the industry came to a close as “their most profitable Indians died” (53). They were in no way treated responsibly by the standards of their day simply off the fact that the trade negotiations were extremely one sided and Americans were using alcohol to barter when they were not supposed to be. They were also not treated responsibly by today’s standards either. Standards have only increased in the employee’s favor and work conditions were nowhere near where they would have to be in today’s environment.
5.) On balance, the fur trade legacy can be looked at in both a positive and negative manner. On the negative side, employees of the trade were paid very low wages and worked in extreme conditions and many men lost their lives. Indians were also treated very poorly, and their demise could be directly correlated with the growth of the trade. However, valuable lessons about business and society and business and government have been learned and can be continued to be passed down through generations to come to ensure an industry never becomes as oppressive as this one had.
6.) The story does hint at how and why capitalism has changed over the years. Capitalism once was the market where earning profit was the number one goal, despite how you got there. Through this story and a few others capitalism is still a market in which the goal is to earn profit, but is now done with laws and standards that must be abided by to ensure equality and safety of those involved.
7.) Models from chapter one apply to this historical era. To explain, the business and society model fits as Astor created this business for his own personal benefit and profit but meanwhile supplied an international market with a high demand durable product that was trendy for years to come. He also set the standard for large corporations to run the US instead of many small businesses. Business and government can be applied when we look at how the trade had an influence on laws that were passed to generate growth in the industry and even the Louisiana Purchase that was made to also help the industry