Actually I agree with most of this.
It’s the “cozy” part that had me thinking you’re part of the conspiracy theorist contingency.
OK. The “cozy” part was more in reference to monopolies granted in many third world countries to well cconnected family run business (like mining operations). I suppose these “public utility” monopolies granted in the US can sometimes include coziness and corruption. Right no, in San Jose the mayor is being investigated for how he handled to garbage collection contracts-- it’s a pretty big deal locally, altough I doubt it gets much press nationally.
Obviously you have never experienced CableVision of New Jersey. Talk about suck.
What’s not true about it? Let’s see:
Somewhat arguable, I haven’t studied Rockerfeller in 10 years, but let’s stipulate that this is all true. Regardless, this has nothing to do with what I wrote, and, thus off-point.
Fine. But, that’s a good thing, right (at least in th case of worthelss operations)? Or, do you believe that inefficient companies should be able to survive?
Again, this has nothing to do with my argument.
Ok, it looks like that Standard Oil wanted cooperation or even, >gasp< collusion amongst the competitors. He didn’t get it, thus, they went into competition, and those lone holdouts got beat down. Fine, competition at its finest. Btw, this isn’t an example of monopoly power.
Again, no he didn’t. You wrote an impassioned retort, but failed to argue against my basic argument: he was losing monopoly power, regardless of what he was doing.
In the quoted article, he never once abused his monopoly position. Prices were always low. Quality did not suffer. Everything was well and good for the consumer. In order for a monpoly to keep its position, first and foremost, it has to reduce prices to the point where competitors will not enter because of lack of profit incentive. Prices under Rockerfeller droped to like $0.30/gal to like $0.059 (same article). As economist John McGee concluded in his classic analysis of the Standard Oil case, “whatever else has been said about [it], the old Standard organization was seldom criticized for making less money when it could readily have made more” through other means.
If you want to argue that Standard Oil was hurting competition through unfair restraints of trade, unfair trade practices, and the like, that’s fine. You won’t get no argument from me. But these things will happen in a managed market way more than in a free market.
So let’s look closer at what you wrote.
Perhaps the best biogrophy of JDR was written by Ron Chernow, a gifted writer who also wrote about the Morgans, Warburgs and Alexander Hamilton. it is rich in detail, and is not a muck raking biography. It has many details, and even had the support of the Rockefeller family.
By your own cite SO controlled over 90% of production and 85% of all sales. By your own cite SO engaged in at least the following abusive practices:
(1) secret and semi-secret railroad rates;
(2) discriminations in the open arrangement of rates;
(3) discriminations in classification and rules of shipment;
(4) discriminations in the treatment of private tank cars.
If you read Chernow’s account (which I have read twice as it is a fascinating read, and the best business biography I’ve ever read, followed by Chernow’s accounts of the Morgans and Warburgs) It is abundantly clear that SO did manage pricing and distribution through a sham company called Southern Improvement Company. Fron “Titan”, Chernow’s account, it says of SIC:
The notion that SO didn’t control prices and competion directly, or indirectly through shipping arrangements is absurd. The evidence that SO forced competitors either out of business, or into collusion with them is *overwhelming. * I don’t think I’ve ever read any authoritive source, including the Rockefellers themselves, that disputes that Rockefeller/SO controlled the market for kerosene through various means, including pricing.
You’re kidding, right? The largest corporation in the world, ExxonMobil, is a fraction of the “Seven Sisters”; the 7 successor companies to “The Standard.” The original seven sisters were:
Those same companies are now:
It is mind bending to think about what kind of company would exist had The Standard not been dismantled. The revenue and profits of these successor companies, if combined, would dwarf any other company on the planet.
The statement, “If Rockerfeller ever had a chance to use monopoly power, he never did, as he couldn’t control prices nor prevent competition from entering” is just amazing. The Standard Oil is the monopoly the Sherman Act was written for, and the Standard Trust is the monolpoly that all monopolies are measured against. In modern business history only AT&T comes close. (and AT&T had none of the “colorful” history and business practices of SO)
Except this wasn’t competition at it’s finest. Rockefeller was a *brilliant *businessman, amd a brilliant manager. In fact, one cannot read avccounts of his [business] life and not come away with at least a grudging admiration of what he accomplished. He lived in a time when many of the things we consider illegal, or abusive were not in fact illegal. It was the wild west of early American business.
But the fact remains that we was a monopolist, and wielded tremondous power as one. Competitors didn’t get driven out of business fair and square, or by “competition at it’s finest.” They were destroyed by tactics that by today’s standrds would get him indicted. Dude, he was a monopolist, and The Standard Oil Trust was the most powerful monopoly ever. And John D Rockefeller wielded that power without compunction, doubt or mercy. He was ruthless.
(btw, tell your brain surgeon econ friends that any true monopoly can only exist if the government allows it. It’s called the Sherman Act)
I keep saying that, yet you seem to keep missing the point. Standard Oil did not engage in price undercutting: it didn’t lower prices to only raise them later. But, I’ll get to that in a bit…
Do you mean the Ron Chernow with distinguished degrees from both Yale and Harvard in English Literature? Excuse me, if I don’t go to English professors for clarity on Economics, particularly, where one such writing is impassioned storytelling rather than analytical reasoning in a peer-reviewed academic journal (i.e. see my previously postings to John McGee.)
Yeah, like I said, not examples of price fixing. Also, still widely used in industry today. Also, I said you get no argument from me.
What is this? The all-Chernow praise post? Go open a MPSIMS thread (though, it might be better suited under Cafe Society, being a work of fiction and all :))
Oh, do you mean this SIC, whose charter was repealed by the state of Pennsylvania? The very same SIC that shipped no oil or conducted a single transaction. Wow, way that Rockerfeller, I am blinded by his brilliance.
Well, to be fair, I was talking about the price of oil, but go ahead and insert what you have to to make your best argument.
Impassioned italics don’t make a good argument, even if used in brevity.
You should expand your reading list. Try reading Journals of Economics and economic textbooks to enlighten yourself on what it means to be a monopoly.
To requote earlier numbers which were so generously not refuted (and re-quoted with actual source):
Did prices rise then? No, in fact:
This historical analysis backs up Professor John McGee’s journal article which stated:
Uh yeah, it was losing its market share. The rest of this quote doesn’t challenge that statement, so I won’t bother respondingto any of it. The wiki article says that it fell to 64% ownership of market share. Great use of monopoly power there!
Excellent lack of anaylsis! Please be more conclusory next time. Btw, if he was such a monopoly power, how did he let his market share fall to 64%? The first ruling against Standard Oil was in 1909, objectionable practices stopped in 1900. It appealed and continued to operate as before, until SCOTUS broker it up for good in 1911, which at that time market share had dwindled to 64% (apparently it was Texaco giving it a run for its money).
Again, he did not enjoy monopoly power. Try using some evidence to support your claims. He did not price gouge, he did not recoup market position, and he lost market share, three major things that a monopoly does as I have previously quoted above. Dude, if you want to argue coersion, physical threat, blackmail, fine, I won’t argue as I don’t read about rich people ((just their economics). These tactics are useable by monopolists and non-monopolists alike. But, to say that they are a monopoly, coercive or not, is refuted by economic analysis.
Comparing Time Warner to Cablevision is like comparing Satan to Lucifer.
Let’s cut through the minutia of the SO monopoly. Can we all agree that SO used all kinds of unfair tactics that would be illegal today to drive competitors out of business…but that those tactics did NOT include deliberately selling oil below cost, waiting for its competitors to go bankrupt trying to match that price, then jacking up the prices once its competitors were bankrupt.
John D Rockefeller and Standard Oil. The nightmare begins... He undercut. and more. Tarbill exposed him.
Standard Oil had a “monopoly” on the refining of oil in that brief period in which American oil production was limited to Pennsylvania and Ohio. Once Spindletop and Tulsa went online in the first decade of the new century, their marketshare dropped quite a bit. The 1911 ruling was a Godsend to Rockefeller, as it allowed him* to divide his organization up into individual operational units focusing on their core competencies. The SC ruling didn’t mention a thing about ownership, so that Rockefeller now owned X% each of 40+ companies, rather than X% of just one Trust. Within 20 years his holdings made him America’s first billionaire.
As my grandfather liked to say, he cried all the way to the bank. 
*Not really him but his successors.
I was going to let this go, because your style of debating leaves something to be desired xtisme and Renob have called you in on it. However, let me just say that sound evidence should be little more than some rant on a free web site, without any analysis by the author or the poster. Btw, Ida Tarbell’s dad tried to compete against Standard Oil and got his ass kicked. I think Ida has a little more than a bit of bias. Try to come up with something that refutes economic analysis, something more than your gut instincts, because that just don’t cut it in GD.