Rockefeller Essay

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Arguments have raged over Standard Oil and its business practices since its prime in the 1870's and 1880's. Was it a monopoly? Did it severely impede fair competition? If it was a monopoly, did it hurt the consumer? These are the questions that have been argued in debates about Standard Oil and its practices. Whether Standard Oil was a monopoly or not, the more important question to economists is, were the practices of the Standard Oil Company efficient and did it hurt the social wealth of the country? The government's enforcement of the Sherman Antitrust Act on Standard Oil hurt the country's social wealth and efficiency.

John D. Rockefeller was the founder and owner of Standard Oil. Considered by many to be the first great
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First, they built extremely high quality, larger refineries. They also set forth in creating their own cooperage or barrel making plant. The plant ended up cutting the cost per barrel from $3.00 to $1.25 and saving Standard Oil around $4,000,000 per year (John D. Rockefeller and the Standard Oil Company). Twenty wagons were purchased by 1868 to more cheaply move the oil. A warehouse was built on the Hudson and East River in New York City and Standard Oil had their own boats to transport the oil. They were also the first to transport the oil via tank cars and invested in a fleet of them. All of these moves were vertical integration steps that reduced the production costs of Standard Oil.

Since Standard Oil was so large, it became economical to build a plant to create products from the waste of the refining of Kerosene. They produced lubricating oil that replaced lard for machinery. They used the gasoline as fuel instead of dumping it into the Cuyahoga River like some competitors had been doing. Consequently, the Cuyahoga had frequently caught fire. Paraffin was another byproduct that they manufactured because it was insoluble in water could be used for making candles and waterproofing goods. The most recognizable product that was created from the waste was Petroleum. Petroleum was a basis for ointments and lubricants. It was later marketed under the brand name of Vaseline. With Standard

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