Monopolies and Big Business

1. Monopolies and Big Business By Will Briggs in association with Tristan and Josh

2. Definition of Monopolies • The definition of Monopoly according to Webster's-Merriam Dictionary. • “1: exclusive ownership through legal privilege, command of supply, or concerted action. • 2 : exclusive possession or control. • 3: a commodity controlled by one party.” – (http://www.merriam-webster.com/dictionary/monopoly) • As well as the definition from Dictionary.com: • “1. exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. • 2. an exclusive privilege to carry on a business, traffic, or service, granted by a government. • 3. the exclusive possession or control of something. • 4. something that is the subject of such control, as a commodity or service.” – (http://dictionary.reference.com/browse/monopoly) • The best definition, however, is from Investopedia.com • “A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition, which often results in high prices and inferior products.” – (http://www.investopedia.com/terms/m/monopoly.asp)

3. Context of the Time • The very first time that Big Business was questioned in America was in the 1850’s, when several monopolies started to pop up one by one, such as the companies owned by John D. Rockefeller, Andrew Carnegie, Cornelius Vanderbilt and John P. Morgan, with their companies in the oil, steel, railroads, and banking sides of business. • Those companies were, however, quickly taken apart by the tag team of Taft and Roosevelt in the early 1900’s, even though they we essential to the economic progress in the early stages of the economic progress, but more on that later.

4. Positives of Monopolies in Big Business • To start off with a quote from the before referenced investopedia.com (from the definition) • “Back when there were a lot of oil companies competing to make the most of their find, companies would often pump waste products into rivers or straight out on the ground rather than going to the cost of researching proper disposal. They also cut costs by using shoddy pipelines that were prone to leakage. By the time Standard Oil had cornered 90% of oil production and distribution in the United States, it had learned how to make money off of even its industrial waste - Vaseline being but one of the new products launched.” – (http://www.investopedia.com/articles/economics/08/hammer-antitrust.asp) • These corporations allow prices to drop much lower because of the consolidation of production was much quicker and more efficient and economical, or, in other words, they got sh*t done. • In situations like the 1893 stock market crash, the U.S. Treasury, having run out of gold, went to people like the aforementioned John P. Morgan and other wall street monopolists for bonds, while it is arguable if this was good or not for the government in the end, as the bonds were rather high-yield (it cost a lot in the end for the government), the treasury was quickly able to pull itself back up to size quickly.

5. Downsides to monopolies • There were many downsides to Monopolies, some of these being: • Oftentimes it happens that these monopolies raise the prices, and since they are the only ones selling, obviously that leads to an abuse of the system, forcing people to pay outrageous sums or else to go without it. • Lack of competition quickly leads to lower quality items and much lowered standards of customer service and concern for public image and reputation. • to quote - “A monopoly market is best known for consumer exploitation. There are indeed no competing products and as a result the consumer gets a raw deal in terms of quantity, quality and pricing.” – (http://www.economicsguide.net/mv/tutorials/the-private-firm-as-producer-and-employer/advantages-and-disadvantages-of-monopoly/) • While many companies and, in fact, capitalism itself, thrives on competition, when a single company owns enough of that specific market, creativity and innovation can quickly stagnate, Plunging the market into a pit which may take years to recuperate because of the total control of the companies.