Monopolies And Trusts

In late 19th century, as Social Darwinism grew, riches were God’s favor and the poor became inferior people. According to the saying of “the fittest survives”, most entrepreneurs did everything they could control the competition that threatened the growth of their business empire. They monopolized the business and controlled the biggest market power, which are called trusts. Monopolies and trusts impacted American society politically, economically, and socially by eliminating the competition, controlling the government, and controlling the prices of supplies. Monopolies and trusts impacted society politically by controlling the Congress and the Senate. “Trusts were extremely influential in Congress and the Senate. Some even accused the trusts

Rockefeller’s Standard Oil Company was one of the trusts at that time. “Within a decade, it controlled 90 percent of the refining business. Rockefeller reaped huge profits by paying his employees extremely low wages and driving his competitors out of business by selling his oil at a lower price that it cost to produce it. Then, when he controlled the market, he hiked prices far above original prices.” (textbook, pg449) This empire threatened the whole American economy by breaking the regulation of the market. It monopolized other people’s business and forced them to join his company. Thus, his empire became stronger and stronger. It was a detriment to consumers and the economy. “They were able to manipulate price and quality without regard for the laws of supply and demand. Basic economic principles no longer applied” (socialstudieshelp.com, “How and why did American business seek to eliminate competition”). This is another evidence supports that trusts generated excessive margins while doing little to improve their product or relevant processes. The economic system became disorder and messy. Therefore, it could cause a great depression in economic system. What’s more, monopolies in economy could stop the progressive economy. “A highly-profitable monopoly also may have little incentive for improvement as long as consumers still demonstrate a need for their current product or service. In comparison, businesses in a competitive market can compete by making changes to existing products and services and lowering prices.” (smallbusiness.chron.com, “How does a monopoly affect business and consumers?”) This evidence shows that monopolies didn’t help improve the society. Instead, they couldn’t consumers’ need as time went