Carnegie open-hearth scale economies

Andrew Carnegie's economies-of-scale strategy built initially on Bessemer, then on open hearth. Used as the setup for U.S. Steel's eventual conservatism trap.

Steel was very labor-intensive back in the old days, and then the Bessemer process came along — we learned to melt steel. Before, we basically either started with cast iron, or if we made wrought iron we basically diffusion-reduced it from the ore and ended up with a sponge which we then had to forge by hand into wrought iron — which was steel basically, a lower-carbon cast iron. Then Carnegie came along with economies of scale and built huge steel plants, based initially on the Bessemer process but later others — the open hearth. Then in the 60s came the basic oxygen furnace, continuous casting, mini mills which were smaller, a way to use a lot of scrap.