[Ed. note: This post is taken from Robert Bradley’s conclusion in chapter 18 of Oil, Gas and Government: The U.S. Experience. In this series, Part I summarized the manifold contributions of John D. Rockefeller to a fledgling, powerhouse industry; Part II critically interpreted rebates and other ‘unfair’ practices of Rockefeller’s Trust; and Part III critically reviewed other complaints about unfair practices against Standard Oil.]

The Standard Oil Trust of John D. Rockefeller qualifies as a free market company, not a political one. The major mistake of Standard Oil in its distinguished history was not a failing of economic performance. It was underestimating the need to present information to explain to the public and critics the virtues of integration and scale economies, particularly in petroleum. (This was an intellectual problem of critics too–see the Appendix below.)…

[Ed. note: This post, taken from Robert Bradley’s Oil, Gas and Government: The U.S. Experience, rebutes the textbook criticisms of the business practices and economic consequences of the Standard Oil Trust. Part I summarized the manifold contributions of John D. Rockefeller to a fledgling, powerhouse industry. Part II provided a critical interpretation of rebate and other ‘unfair’ practices of Rockefeller’s Trust. (Documentation for this post can be found on pp. 1099–1103.)]

If Standard is labeled a monopoly because of its large market share, a liberal application of the “single seller” criterion, it should be recognized that outside of oil tariffs that Standard neither wanted nor needed, Standard was a free-market, not a governmental, monopoly. Standard had to continually offer quality products at competitive prices to gain and keep its dominant market share.…

[Ed. note: This post, taken from Robert Bradley’s Oil, Gas and Government: The U.S. Experience, rebutes the textbook criticisms of the business practices and economic consequences of the Standard Oil Trust. Part I yesterday summarized the manifold contributions of John D. Rockefeller to a fledgling, powerhouse industry. (Documentation for this post can be found on pp. 1094–1099.)]

Critics of Standard Oil, while conceding many of the aforementioned points about how Standard Oil advanced consumer service and resource efficiencies, might accuse the author of painting the picture with only bright colors. What about the other side of Standard’s drive to power? Did the ends justify the means – preferential treatment from third parties over competitors, monopsony power to purchase crude at prices detrimental to producers, predatory pricing to eliminate rivals and raise prices, and excess profits gained at the expense of consumers?…

[Yesterday (May 15) was the 100th anniversary of the U.S. Supreme Court decision [Standard Oil Co. of New Jersey v. United States finding John D. Rockefeller’s company guilty of restraint of trade and monopolizing the petroleum industry. The court’s remedy was to affirm a lower court decree effectively dividing Standard Oil into several competing firmsdissolution of Standard Oil. This post, taken from Robert Bradley’s Oil, Gas and Government: The U.S. Experience, summarizes the manifold contributions of John D. Rockefeller to a fledgling, powerhouse industry. Documentation for the points and quotations below can be found on pp. 1089–1094.], 221 U.S. 1 (1911)]

A resume of the contributions of Standard Oil prior to its court-ordered dissolution in 1911 offers an illuminating glimpse into entrepreneurship, the market process, and consumer service therein.

Rockefeller and the management team at Standard Oil can be credited with accelerating the maturation of the kerosene age in petroleum.…