Modern Day Monopolies

I am finally home from my travels. It feels as though I have been gone for over a century, yet when I look at the date I see that I have only been gone for a few days. I don’t see how it is even possible. Yet since I am a history major, rather than engineering, or science, I am not going to question how it is possible that I am actually traveling though time. All I really know that I have learned a lot about the oil industry and the idea of monopolies. But it does not really matter to the average person what I have learned, other than it just being some interesting facts. Yet I know that some how everyone can relate to this topic because of it does have an impact on today’s society.
Rather that just thinking about just oil, it might be better to just refer to the good as a commodity. Thus we can apply the ideas of monopolies to many subjects other than standard oil. First, however we must learn what a commodity actually is. According to Merriam-Webster’s dictionary, the word commodity means “an economic good; something useful or valued; a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price.” (Merriam-Webster “Commodity) So in terms of Standard, the commodity would be oil. Yet many things could be considered a commodity in today’s consumer society, for example look at the amount of cars in the parking lot, or even the advertisements on television. In terms of goods and services, there are two types of people that are effect. The first is known as a producer or a seller, the people who are actually making the product or selling a service for a profit. The second is called a buyer, or a consumer, who is the person who is paying for the service or good. “When a commodity is largely sold in spot markets, with prices that are very volatile and uncertain, buyers and sellers tend to try to find a mechanism to minimize their risk.” (Yergin “The Prize”, 724) In other words both they buyer and the seller are trying to make the market work for themselves. The seller is trying to make the most profit possible, and the buyer is trying to get the best quality product for the lowest possible price. “Both buyer and seller are hedgers, their objective is to minimize their risk and reduce their exposure to volatility.” (Yergin “The Prize”, 724) In reality the market is rather instable and unpredictable, which is why many buyers and sellers make deals with others in order to maximize their prophet or minimize the price that they are paying, if they do they are able to make it possible to drive out all other competition. Yet this is where it the buyers and the sellers violate the Sherman Anti-Trust Act, it is in section 2 that the act prohibits the use to conspire or create secret combinations. In addition in order to be considered a monopoly a business must control over 90% of a commodity in order to be considered a monopoly. (Morawetz “The Sherman Anti-Trust Act, 325-326)
It seems as though this was a big problem during the gilded age, with the major industries being owned by one or two big bosses. Yet there are also companies that continue to do this today.
When thinking about modern day monopolies, the thing that most Americans think of is Microsoft. In terms of a PC the only really competitive software is Windows, which is made by Microsoft. In 1995 a new software came out, called Windows 95. This software was the latest hit when it came to computers making it easier for the average person to use. Yet there was one big problem, when using Windows 95, one could only get on the Internet using one network, which is MSN, using the Windows Explorer to actually get on to the internet. (Gleick “Microsoft Monopoly”) Yet by doing this, it would force all of the other companies that were network browsers to become worthless, considering it would drive out all other competition when it came to the Internet. It would also mean the Microsoft would have total control over the software business and also full control over the Internet. More recently there have been some other companies that have been questioned for being monopolies, for example Hasbro, the game maker. Currently Hasbro games have 9 out of 10 spots on the best selling games list. Which has been driving out all other competition. (Feder “Hasbro Monopoly) Another example is Wal-mart. In terms of Hasbro, Wal-Mart made a deal with them to not advertise any other games if Hasbro would give them the cheapest game prices. Thus, “Wal-Mart reflects large retailers' ability to determine the pace for expanding retail exposure.”(Feder “Hasbro Monopoly”) This way Wal-Mart is able to provide the lowest price for their customers, driving out the competition.
Much like the idea of the monopoly of Standard Oil, many people want the government want to step in and get rid of monopolies. But there are two sides of the story. When it comes to Standard, they wanted to maximize the amount of profit by making the process of making oil production cheaper by increasing the amount of the actual commodity. This is the same idea for Microsoft, Hasbro, and Wal-Mart. One must ask themselves if they are willing to pay a higher price, or if they want to be part of the people who are driving out the competition.