Attacks on the free market usually cite historical examples of how free enterprise leads to monopolies and massive acumulations of wealth. This is for the most part false, since there is usually some sort seldom-talked about government intervention that made the monopoly possible. For example,. the interstate commerce comission significantly hampered competition during the bith of railroads by imposing a minimum fair rate.
I was looking through the wikipedia article on standard oil though and much of the information lacks a source. What IS there about Standard Oil’s monopoly seems to be legit as far as libertarian laws go…
Is this an example the left actually wins on? Or is there more to the analysis than is typically given?
When Standard Oil was going through its anti-trust case, its market share was actually decreasing. Never did Standard Oil have a 100% stake on the market, either.
Thomas Woods has done extensive research and has some good lectures and articles on the subject. It wasn’t ever a monopoly. When the State broke it up, in 1911, it was already competing against Gulf, Texaco, Associated Oil and Gas and nearly 150 smaller independent refineries and only had 11% of the market share (down from its 88% market share in 1890). Again, that’s before the State began its meddling.
I used to think that the left did win on this one but then I watched a video by a guy called confederalsocialist on youtube. You should look him up he has a ton of incredibly useful videos on anarcho-capitalism but if you find his video about the industrial revolution, Roosevelt, or the robber barons then that will help you alot.
John D. Rockefeller was a great man. Using confederalsocialist’s info here’s some facts
Standard oil at its height owned about 85% of the oil market
During the rise of standard oil under Rockefeller the price of oil fell about 3/4ths
Standard oil was first labled a monopoly when it had about 65%of the market
By the time that Standard Oil was broken up its market share was already back down to the low 60%
Rockefeller’s policies while running the company reduced waste and kerosene and many other products were introduced through his new refining techniques and kerosene was introduced to the majority of American housholds due to the new refining techniques of standard oil
Standard oil promoted innovation through advancment and large cash payouts.
Standard oil was awesome and people hate it for all of the wrong reasons
However can somone tell me if there was any validity to the steel market being a monopoly under Carnegy?
Most of the responses hear almost feel like they are conceding the point.
Say a monopoly did exist. This firm would have to be so efficient, that in every area in the globe, its prices would be low enough and quality high enough to suppress anyone from thinking that a competiting business would be profitable.
But if this happens, then that firm is doing a pretty awesome job; and were it ever to restrict supply in the slightest, then competitors (or in the case of a natural monopoly, complement goods) would crop up.
(in the same vein, I never understood why people looked at gini coefficients. Yeah, people are richer than me, so what? It’s not a zero-sum game.)
Idk if i want to agree with this. The Rockefeller family has been up to some shady things… shady NWO things…
But thank you for the post and youtube recommendation. I’m listening to his one about UL right now.
@LS
Thanks for the youtube post. I was already familiar with monopoly theory but the historical aspect of his lecture is really useful to me. Its crazy to see how policymakers applied emerging theories in economics without an understanding of even the flawed analysis. I was reading today a leak from the bilderberg group on wikileak from their 1980 meeting. In the economics section it talks about keynes and friedman over and over again. What will they think of next…
A Hoppean analysis leads to understanding that politicians are motivated to fail, because it is in their best interest. And their best interest, given that the power of the state is a temporary position in a democracy, is to fail early and often.
That they make decisions based on the well being of others, or some commitment to veracity is a fairy tale.
Market share and prices! There’s a brief synopsis on mises.org, here:
First, Standard never even monopolized petroleum refining, let alone the entire oil industry (production, transportation, refining, distribution) which would have been an impossibility. Even in domestic refining, Standard’s share of the market declined for decades prior to the antitrust case (64% in 1907) and there were at least 137 competitors (firms like Shell, Gulf, Texaco) in oil refining in 1911.,
[P]etroleum market outputs increased and prices declined for decades during the alleged period of “monopolization” by Standard Oil. For example, prices for kerosene (the industry’s major product) were 30 cents a gallon in 1869 and fell to about 6 cents a gallon at the time of the antitrust trial.
So? If I’m a great man and I have children and then grand and great grand and great great children I can scarcley be blamed for thier actions ad it doesn’t make my actions any less heroic. The day that men who only made life better for milions are considered bad because of the actions of their far distant offspring is a bad day
I understand. The reason i’m skeptical of Jonh R the 1st is because I’m afraid there’s something wrong with him too.
I suppose I’m open to the idea of Rockefeller as an ultra savvy champion of the free market. Its just that typically when I encounter some very well known historic figure, they have a dark side that isn’t talked about (Lincoln, FDR, etc).
Everyone you just mentioned are the “good” historical figures who people want to believe are infallable. Rockefeller is one of the good ones who’s presented as one of the evil greedy capitalists. Even if he did have a dark side I would doubt its anything compared to the good he’s done.
At any rate reverting to the original topic rockefeller almost certianly wouldn’t have been able to do just about any of his negatives without a government just sitting there waiting to be corrupted… Or simply shifted from one type of corruption to another
I have a real trouble understanding what you mean when you say it’s in their best interest to “fail early and often”, I presume what you mean is that the incentives in place are such that it will be optimal for politician to act in his own self interest and not in the interest of the electorate. But, this is hardly a “Hoppean” analysis, the idea that public officials (something of a misnomer) will act in their own interest is pretty basic Public Choice stuff. Which began with Downs and Tullock & Gordon, not Hoppe.
Also, the idea that term limits in a democracy will increase the discount rates of office holders is nothing revolutionary and original with Hoppe.
