Re: POL: Reaction to Microsoft Ruling

From: John Clark (
Date: Sun Apr 09 2000 - 15:39:16 MDT

> Matt Gingell wrote:

>I think monopolization is a problem

Me too, and the mother of all monopolization is government. The DeBeers
diamond monopoly would never have been successful without sweetheart
agreements with the governments of South Africa and India, and the C in
OPEC stands for countries.

>and that intervention is in some instances beneficial.

Let me say something about the most famous government intervention of all.
Standard Oil was incorporated in 1974 and its principle product, kerosene,
sold for 23.5 cents a gallon. Standard controlled the largest percentage
of the oil industry it ever would in 1899 and in that year kerosene sold for
7.5 cents a gallon. That's not exactly sticking it to consumers I would say.

In 1899 non American oil was not a significant factor and Standard controlled 32%
of American oil production and 86% of its refineries. In 1911, the year government
came to the rescue and broke the company up, standard was already in decline,
it had serious competition from Texaco, Sun, and Pure Oil. Domestic production
was down to 14% from 32% and refining was down to 70% from 86%.
Internationally things were far worse, Royal Dutch Shell and Anglo Persian Oil
(later called British Petroleum) were huge, in fact America was no longer the leading
oil producer, Russia was. A few years later Indonesia beat Russia, a few years
after that the Mid East beat everybody. What exactly did the government save us
from in 1911?

It's interesting that by 1917 even the government had to face realty, they were at
war and needed as much oil as they could get as cheaply as possible. Believe it
or not, the government of the United States of America urged the various companies
that had been Standard Oil to "pool" some of the resources and cooperate among
themselves more than they had in order to increase production and lower the price
of oil.This is pitiful! I'm tempted to make some wise cracks at the government's
expense but it almost seems in bad taste, sort of like making fun of a blind man.

              John K Clark

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