US Economy in the late 1800’s

•Abundant natural resources
•A willing and able workforce
•Pro-business regulations
•Advances in technology
•John D. Rockefeller and Andrew Carnegie capitalized on the industrial revolution by establishing huge corporations in the oil and steel industry
•This period of economic expansion, increased quality of life for most, low unemployment, and opportunities for innovation and entrepreneurship it also introduced threats to the free market.

Monopoly

•During the industrial revolution in the late 1800’s, for the first time in the US economy, consumer experience the power that can come from a monopoly.
•A monopoly is a single company that controls and entire industry.

The Threat of Monopolies and Trusts

•Regulators struggled with how to continue to create a business friendly environment, but also protect consumers from potential abuses of a monopoly.
•When a company controls an entire market it has no competition. It is able to keep supply artificially low, forcing prices up.
•Monopolies can fix prices to achieve outrageously high margins.
•The United States was the freest market in the world at this time, but it was also clear to regulators that an efficient free market system was only possible with competition.

What is the Sherman Act?

•The first major federal antitrust law
•Targeted at breaking up monopolies
•Prohibiting two types of anticompetitive business behavior:
- Contracts, combinations, or conspiracies in restraint for trade or commerce
- Monopolies and attempts to monopolize
•Fails to define what is a contract, combination, or conspiracy in restrain of trade.
•Based in the common law interpretation of federal courts







Última modificación: martes, 14 de agosto de 2018, 10:17