“Two men have been supreme in creating the modern world: Rockefeller and Bismarck. One in economics, the other in politics, refuted the liberal dream of universal happiness through individual competition, substituting instead monopoly and the corporate state…”
-Bertrand Russell
It is an economic fact that a competitive market is the most efficient. However, one of the major reasons our nation took off economically was because of the few monopolies that controlled many of the major industries in the late 1800’s. Two of these were the oil and railroad industries.
“Railroad corporations became America’s first big business.” Huge tracks connected the two coasts of America and made business and travel easier. Can you imagine hundreds of different companies and organizations trying to work separately and raise the funds to build railroad track that could span tens of thousands of miles? It would have taken years to do half of what Central Pacific Railroad and the other big companies did. The railroad industry was also crucial starting another monopoly, oil.
John D. Rockefeller was one of the United States first millionaires and if converted to today’s dollar, the wealthiest man in the country’s history. Most of this wealth was acquired through illegal deals with railroad companies and the rest through perseverance. He went out and bought smaller companies and grew at an incredible rate. Rockefeller’s company, Standard Oil Company, controlled more than 90 percent of the country’s refinery capacity by the 1870’s (Faragher, 505.) Due to the companies near complete control of the market, Rockefeller was able to drop the price of kerosene products near eighty percent. This is immensely important when you consider the importance of oil in an industrial nation.
Oil has some importance in most, if not all, industries. Oil was crucial getting the United States to the next step economically. In just a mere hundred years of being a independent nation, the U.S. grew to be a leader in industry. Rockefeller’s ability to dominate the oil industry early on was a key factor. He was able to control asset, and ultimately drop the price. Would this be consistent in today’s world? Well OPEC has done a fairly good job of showing there answer to this question is no. We have become so dependent on the resource that the cartel can charge whatever price they please. Which is only good business practice, in my opinion.
Monopolies were an effective way of organizing key industries that made the United States an economic power for over a century. They helped gather natural resources that were eventually crucial in the country’s development. Once again, I think it would be rather foolish to look at Rockefeller, and others like him, and say they were bad men. I would simply say that they an opportunity, and took it.
