Standard Oil Monopolies

We support the statement ‘Monopolies have led to the success of many economies in the world, and therefore, they should be maintained by government if they want their economies to continue enjoying economic growth and prosperity’. This is because monopolies are large in size, they benefit from economies of scale and are able to generate a huge amount of profit- larger than other market structures. With this money, they can invest in research & development, improving their existing products and creating new ones. Moreover, monopolies have a great impact on a country’s economy. Two very large monopolies that positively impacted the United States economy is Standard oil and Steel Company.

Standard Oil Company, America’s first successful multi-national

Standard Oil built a nationwide infrastructure that did not depend on trains any longer, with their fluctuating costs. After the company was dismantled, costs and the overall prices of petroleum products decreased, because of Standard Oil. The size of Standard Oil allowed it to undertake projects that disparate companies could never agree on and, in that sense, it was as beneficial as state-regulated utilities for developing the U.S. into an industrial nation (Beattie, 2007). Oil became America’s biggest industry because of Standard Oil. Rockefeller provided an extremely useful and needed product that the industrializing country needed- kerosene, lubricants, and gasoline for automobiles (Rose, 2014.) Furthermore, the practice of being efficient was adopted by Standard Oil and this greatly impacted the US economy. All parts of the oil was used in the process of production, in order to achieve a high level of production and did not waste. For example, Vaseline was created with the use of the residue left over from the refining processes. Because of Standard Oil’s size, the company had the ability to take over projects that smaller companies would not have been able to accomplish. This in turn, helped in developing the growth of the United States as an industrial nation. Whether these projects were reducing the prices of railroad rates or opening up new refineries, they all positively affected the

Steel was created at an affordable price with the help of Carnegie’s business skills. As a result, numerous buildings and bridges were constructed across America which led to an economic boom that created jobs and ultimately led to the expansion of America (Mann, 2016). Furthermore, the efficient and cheap mass production of steel rails for railroad lines was also one of the two great innovations. The expansion of the railroads meant that products and goods could be easily exported around the country, which helped the growth of manufacturers selling those goods. The second great innovation was the vertical integration of all suppliers for raw materials. In the late 1880s, Carnegie Steel Company was the largest manufacturer of steel rails, pig iron and coke in the world with a capacity to produce approximately 2,000 tons of pig metal per day (Gilded Age Home, 2013). Additionally, the area in which the company influenced United States was also in the education system. Carnegie supported higher education by building the Carnegie Institution in Washington, D.C and Carnegie Foundation for the Advancement of Teaching which has provided colleges and universities with funding for research. Carnegie allocated $125 million to the Carnegie Corporation of New York for educational advancement through schools, libraries, research and publication. Money was also donated to over 100 libraries to some of those