Standard History
13 March 2006
Editor, The Atlantic Monthly
600 New Hampshire Ave., NW
Washington, DC 20037
Dear Editor:
To help commemorate The Atlantic’s sesquicentennial (April 2006), you reprint part of Henry Demarest Lloyd’s muckraking attack on Standard Oil.
The thesis of Lloyd’s "Monopoly on the March" - first published in the March 1881 issue of your magazine - is that Standard Oil was a dangerous monopolist that could be controlled only by the national government. But the very first sentence of Lloyd's essay is evidence against his thesis: "Kerosene has become, by its cheapness, the people’s light the world over." Indeed.
A true monopolist raises prices and restricts output. Standard Oil did the opposite. Between 1870 and 1890 - the year the Sherman Antitrust Act was passed - kerosene's price fell 72 percent, from 26 cents per gallon to seven and three-eighths cents per gallon. The large market share that Standard Oil enjoyed during this era resulted from nothing more than Rockefeller's intrepid quest for efficiencies that enabled his firm to keep cutting its prices.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, The Atlantic Monthly
600 New Hampshire Ave., NW
Washington, DC 20037
Dear Editor:
To help commemorate The Atlantic’s sesquicentennial (April 2006), you reprint part of Henry Demarest Lloyd’s muckraking attack on Standard Oil.
The thesis of Lloyd’s "Monopoly on the March" - first published in the March 1881 issue of your magazine - is that Standard Oil was a dangerous monopolist that could be controlled only by the national government. But the very first sentence of Lloyd's essay is evidence against his thesis: "Kerosene has become, by its cheapness, the people’s light the world over." Indeed.
A true monopolist raises prices and restricts output. Standard Oil did the opposite. Between 1870 and 1890 - the year the Sherman Antitrust Act was passed - kerosene's price fell 72 percent, from 26 cents per gallon to seven and three-eighths cents per gallon. The large market share that Standard Oil enjoyed during this era resulted from nothing more than Rockefeller's intrepid quest for efficiencies that enabled his firm to keep cutting its prices.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Thursday November 30, 2006 at 4:27pm