Essay on The Greatest Oil Man - 633 Words

The Greatest Oil Man The majority of people in the world dislike monopolies. People do not like monopolies because they are allocatively inefficient and because they produce less than consumers want. John D. Rockefeller was a good example of a monopolist from 1880 to 1911. Most people in that time period did not like his company, Standard Oil, and wished for an end to it (micheloud). In 1870, J. D. Rockefeller started the Standard Oil Company. Soon after the birth of this company, Rockefeller began to horizontally integrate other refineries into his company. This was not enough for Rockefeller. He wanted control over the whole industry so he proceeded to vertically integrate other companies including companies having to do†¦show more content†¦At this time, he was the only buyer so the oil men had to sell at dirt-cheap prices or go out of business (micheloud). When Standard oil obtained the low prices for oil and from the railroads, it became â€Å"the lowest cost refiner in the world†(Micheloud) and made it easier for him to sustain his monopoly. This gave Rockefeller the leverage he needed to raise a war on any given market and so he did. Rockefeller would lower prices in a certain area selectively to choke any competitors out of the business. As part of his integration of other companies into his own, he would either attempt to purchase these companies at forty percent of their value as capital or eventually gave in to extreme pressures. There was no choice for most of the companies at the time; it was either sell or go out of business (micheloud). Eventually his rein began to end with The Sherman Antitrust Act in 1890. â€Å"The law forbids every contract, scheme, deal, and conspiracy to restrain trade (micheloud).† It also forbids conspirations to secure a monopoly of a given industry. Eleven years later the Supreme Court found that Standard Oil was in violation of The Sherman Antitrust Act. Standard oil was forced to dissolve into thirty-four separate companies (micheloud). One reason for disliking Monopolies like Standard oil is because they are allocatively inefficient. This means that the monopoly is preventing resources from being placed in the mostShow MoreRelatedTragedy of the Commons Essays886 Words   |  4 Pagesresources are infinite. As our population increases it will become harder and harder to support, and in order to attempt to support the increasing population our amount of resources used must be as close to zero as possible. This creates a problem, because man is naturally selfish, and wants to advantage themselves only. Over-herding is a product of over-population: many farmers over-herding not only to feed the population, but also to earn more money for themselves and their families. 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