Quote from: BitterTea on May 21, 2011, 11:50:21 PM

I'm on my phone so this reply will be terse, but there are two important critiques of the view expressed above.

1) Were these trusts providing better service at a lower cost than their competitors? Ultimately, that is the most important question.
2) Were their monopoly positions sustainable? That is, absent government intervention, wouldn't the ability of smaller competitors to more easily adapt to new markets and technologies allow them to efficiently compete with the trusts?

I think these three paragraphs address your questions-

Quote

Once a trust emerged, it would raise its prices and drop its quality of service, as well as engage in unfair trading practices that drove other firms out of business. The abuses of these monopolies became so great that they became a national scandal. So deep was antitrust sentiment that when both houses of Congress passed the Sherman Antitrust Act in 1890, there was only a single dissenting vote! (2) But U.S. presidents did not bother to enforce it, and the monopoly problem continued to worsen.

The worst period of monopoly formation was between 1898 and 1902. Prior to this, there was an average of 46 major industrial mergers a year. But after 1898, this soared to 531 a year. (3) By 1904, the top 4 percent of American businesses produced 57 percent of America's total industrial production, and a single firm would dominate at least 60 percent of production in 50 different industries. (4) The power of these monopolies easily dwarfed the governments that oversaw them. As early as 1888, a Boston railroad company had gross receipts of $40 million, whereas the entire Commonwealth of Massachusetts had receipts of only $7 million. (5) And when Rockefeller, Carnegie and Morgan united in 1901 to create U.S. Steel, the result was an international sensation. Cosmopolitan magazine wrote:

"The world, on the 3rd day of March, 1901, ceased to be ruled by so-called statesmen. True, there were marionettes still figuring in Congress and as kings. But they were in place simply to carry out the orders of the world's real rulers -- those who controlled the concentrated portion of the money supply."