Monopolies In The 19th Century

A monopoly is advantageous to the society and is encourages by the government if there are high fixed costs and very strong economies of scale. At the same time, it could also lead to unequal distribution of wealth; containment of consumer choice; lobbying and unethical spending.

In the late 1800’s America’s industry was on the rise, in this completely new era many factories were born and introduced to the American people. Many people also had to help build railways as well as many other ways to help transport or make goods, this would help build industrial America. But many people would face crucial conditions working in factory, it was unsafe for many people, even some young children who had to work faced a lot of injuries. Not only this, but many people would be out of work because the factories were taking over the work force. One of the most successful people in this time period was John D. Rockefeller, he owned 90% of refineries in America, he made his living by selling, transporting, and refining oil.

There is just a one person who sells products or services and there are no incentives which help to break this monopoly. There are many monopoly industries in the market. In monopoly, they use patents because they don’t like if someone’s copy their inventions.

Monopolies and oligopolies often use anti-competitive practices, which can have a negative impact on the economy. This is why company mergers are often examined closely by government regulators to avoid reducing competition in an industry.

Finally is the allowance of these monopolies to rise in the first place. Since there were no regulatory agencies back in the second industrial revolution, big businessmen with the idea of trimming fat in their companies could conquer any competitor by using hardball tactics of purposely

Throughout history, there have been many problems present in the American life. In the time period between the 1800s to the 1900s, there were many problems such as, poor living and working conditions and powerful monopolies. Many reforms were proposed in order to solve these problems. The grisly living and working conditions, along with overpowered monopolies, were both addressed with reforms.

Prior to the American Era of Industrialization, the American Civil War had just taken place that gave the Northern Economy war profits that were eventually invested into industrialization. However, the Age of Industry, in the United States, was extremely harmful to the nation, due to the fact that the idea of Social Darwinism arose, there was corruption within the government, and monopolies began arising which had a negative effect on the the economy and the working class. Monopolies, in the industrial period, had a negative impact across the nation due to the fact that monopolies made life difficult for the arising middle class, economically speaking. Document 1 illustrates perfectly how monopolies made life difficult for the working class

The American business giants of the Gilded Age were captains of industry. The men and women who lived in this time period took risks in search of wealth. Some entrepreneurs didn’t earn that wealth in a good way. However, they did what they needed to pursue their dreams. Some became very successful, creating monopolies like Rockefeller Oil. Others weren’t so lucky and went bankrupt.

During the Progressive era from 1900-1920 , the reformers and the federal government was making reforms on the national level. The Progressive Era was bursting with ideas to make life better in the industrial age by making changes to political and social through the government.Most of the Progressives had the ideology of limiting big business, improving social justice, and improving democracy for the people. They only made limited change with child labor and trust-busting.Some limitations prohibited leaders from implementing their actions right away, but their success was the ultimate result. This was fueled by investigative reporters who were called muckrakers. This era was named the Gilded Age, which means there was bad under the appearance of something good.

Monopolies are quite dangerous economically, and are usually broken up by the federal government, with only two exceptions- electricity, and gas. These are modern examples. A monopoly is the economic term for when a company that makes a product has no competition, and can raise the prices as high as they want. For example, the most obvious and powerful monopoly of the industrial revolution was the railroad monopoly. They made money quite quickly as a shipping company, and destroyed any and all competition as the only transcontinental railroad at the time. It’s leader, Cornelius Vanderbilt came to be considered one of the most powerful people of all time, due to his control over who he shipped for.

Many utilities are monopolies by having the entire market share in certain areas. With deregulation of these utilities, the market becomes open to competition for market share to begin. In terms of regulation of monopoly, the government attempts to prevent operations that are against the public interest, call anti-competitive practices. Likewise, oligopoly is a market condition where there are minimal distributors that have a major influence on prices and other market factors. This causes market failure, especially if evidence of collusive behavior by dominant businesses is found.

1 - There is a separation of service and payment. Because monopolies are funded through taxation, they cannot go bankrupt - they can always get more funding from the public coffers. Therefore, monopolies have little incentive to be efficient.

Adam smith explained that monopoly charges any price that it chooses, and that it robs consumers and makes the countries less efficient and poorer. He also explained that competition means that businesses try to charge the lowest price possible, so that consumers could get the maximum value for money and that if they can buy more, jobs in the economy will be more supported and then the country will grow even more richer than it already is. Adam Smith also explained that without the police stopping competition, monopolies couldn’t survive for very long.

Natural monopolies are cases in which production costs, infrastructure, and demand structure lead to a single monopolizing firm producing the good at lower cost than any other arrangement. Under such situations, firms will tend to over-charge and under-supply, causing a reduction in social surplus and an inefficient distribution of goods. A lack of competition is a fundamental violation of the idealized market assumptions. Little or no competition leads to inefficiencies of production and operation (Weimer and Vining p. 102). Furthermore, natural monopolies give an unfair and non-competitive advantage to firms that have entered the industry first. In cases of natural monopolies, government must typically regulate private industry in an attempt to maximize surplus, or, alternatively, government may provide the good or service publicly.

What is a monopoly? According to Webster's dictionary, a monopoly is "the exclusive control of a commodity or service in a given market.” Such power in the hands of a few is harmful to the public and individuals because it minimizes, if not eliminates normal competition in a given market and creates undesirable price controls. This, in turn, undermines individual enterprise and causes markets to crumble. In this paper, we will present several aspects of monopolies, including unfair competition, price control, and horizontal, vertical, and conglomerate mergers.