After listening to your presentation one of your reflections, while true, rang a little empty to me. The unit price of oil did decrease during the time of the Standard Oil Trust. But as they say a rising tide floats all boats and covers many obstacles.

The production and distribution capacities for oil multiplied dramatically during this time. Just based on absorption of fixed overhead alone to unit price for oil would have declined. When we consider economies of scale; the rapidly expanding markets; and the expanding discovery of reserves it is not hard to imagine that unit price would have consistent downward pressure. But a declining price does not preclude Standard Oil from engaging in predatory practices.

Have you had any luck researching the expansion and marketing tactics of the Standard Oil Trust? Just the mergers & acquisitions aspect of the trust is amazing to think about – I believe they were doing hundreds of mergers each year for quite a long stretch of time. I’ve not heard of that volume of M&A even from the likes of GE or Tyco. From the histories I’ve read the expansion and marketing tactics were a closely guarded secret at the time, perhaps in our time someone has uncovered some of these gems.

Some of the tactics I’ve come across (by hearsay) is that Standard Oil

Would gouge markets with higher prices where they held a local monopoly to push oil below cost in the market they were targeting to expand into.

I did read that their acquisition offers were generally fair, but that they rarely made offers on more than half of the competitors in a space. The remaining competitors were crushed.

Again hearsay, Once STO captured the monopoly in a market they raised prices to recoup their losses, and then used the future surpluses to expand their war chest.

Have you come across any good references about the STO tactics?

Great blog posting on the myth of monopoly, and the article you link to is fantastic. (I’m going to cite to it in a law journal article I’m currently writing on another 19th-century commercial trust and patent pool, the Sewing Machine Combination.)

I think we have to be careful about an Objectivist defense of Google, however, because Google was one of the companies that was leading the antitrust charge against Microsoft back in the 1990s. (The backstory to the DOJ’s case against Microsoft is that it was heavily lobbied by representatives from Netscape, Sun Microsystems, and others to file its antitrust case against Microsoft. From what I’ve heard, the DOJ was initially disinclined to do so, but these tech companies convinced it otherwise.) So, Google used antitrust to knee-cap its biggest competitor back in the 1990s, Microsoft, and now the up-and-coming new tech companies are agitating to knee-cap Google. So, the application of antitrust against Google represents the antitrust chickens coming home to roost.

So, here’s my question: How do we defend companies now when they have engaged in morally reprehensible behavior in the past? In some respects, I think Tom Bowden’s post about the oil companies paying Chavez to explore for oil in Venezuala is a good example of what to do. Deplore what these companies have done, and use this as another example of both the evil of statism and the relevance of sanction of the victim. What do you think?

Best,
Adam

Will you recommend a good bibliography of Rockefeller? Your lecture piqued my interest.