Standard Oil Monopoly Analysis

The Standard Oil Monopoly

John D. Rockefeller was the founder of the Standard Oil Company. He opened his first refinery in Cleveland, Ohio in 1863. In 1870 he created Standard Oil. By the 1890s, Rockefeller controlled 90% of the United States pipelines and refineries. Many critics of Rockefeller claim this was due to unfair business practices which gave him a monopoly on the oil market. Rockefeller so oppressed all competition that ultimately he alone controlled the market. In 1890 congress passed the Sherman Antitrust Act which basically forbids any companies to “restrain trade”. It also forbids companies from establishing monopolies. In 1911, the U.S. Supreme Court found Standard Oil in violation of antitrust laws and ordered the company to be shut down. I agree with the government’s response to Standard Oil’s underhanded domination of the oil
A monopoly is detrimental to any society. When one business is the sole provider of a good or service, that gives that company incredible power. They can charge anything they want, and if it’s a product that the public really needs, the public is at that company’s mercy and must pay. A monopoly is also bad because of the tactics used to create it in the first place. Often times, dirty tricks are employed to drive competitors out of business, ruining lives in the process. A company like Standard Oil had deep pockets, so it could afford to slash it’s prices to rock bottom in order to bankrupt a competitor. Big companies like that also have a lot of political influence and this is never a good thing for the environment or society. John Sherman, who was the sponsor of the Sherman Antitrust Act wrote: "if we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessaries of life.’” The United States doesn’t tolerate monarchies or monopolies very well at