John Rockefeller as a Robber baron

John Rockefeller is one of the great American businessmen that dominated the oil industry in the 19th century. His business acumen was coupled with unethical practices that saw him amass great wealth. The method Rockefeller used to accumulate such large amount of material wealth has since elicited mixed reactions from scholars. While his philanthropic character is widely praised, his enlisting among the industrialist robber Barons cannot be ruled out. In essence, the monopoly power that Rockefeller enjoyed in oil industry was tantamount to public exploitation[1]. However, the system was to blame as oil industry had no regulation at the time Rockefeller joined. A critical review of some his business decisions illuminate a crafty person that explored all available legal loopholes and information gap to earn massive revenues[2]. Rockefeller had a way of frustrating his competitors and keeping the Standard oil revenue constantly high. In order to suppress or bar other competitors in the oil industry, Rockefeller used to buy or create companies related to secretly expand its dominance in the market. Such firms as engineering and pipeline were established to appear as independent from standard oil, however, Rockefeller and his business associates used such derived companies to command scale of production, exude confidence, reflect reliability, and obtain hidden rebates. As Rockefeller pursued such unethical business practices, he destroyed the future of many other businessmen[3]. In that regard, despite showing spirit of philanthropy, his antics consumed so many entrepreneurs and promoted monopoly that worked against the interest of the American people.

At some point, Rockefeller is remembered for buying up almost all the oil refinery equipment in a move to shut out potential competitors. It is worth to note that in ethical business practices, a level field is important and such unregulated monopoly is uncalled for. While America was since known as a free world where equality reign supreme, Rockefellers attempt to create barrier to entry through purchase of all oil production machinery was not in good faith. In fact, Rockefeller had another tactic in which he would get intelligence on the firms having a conflict or stiff competition. Through his vast network of information gathering, underground deal negotiators and massive financial muscle, he would secretly buy one of such firms [4]. By acquisition of a company in a private arrangement, Standard oil would get more information from the management of the bought company and note the possible threats and deals from its real industry competitor. In that regard, Rockefeller steadily monopolized information, contained the supply chain of its competitors and ultimately killed many firms. Such practices gave Rockefeller head start in profit accumulation, pricing, and wealth while trampling over the life of many Americans that lost their jobs. In the event that rate wars heightened, Standard oil would cushion itself against losses by slightly cutting prices in the short run[5]. Such strategy effectively locked out its competitors that did not have enough financial buffers to keep pace. The competing firms would therefore sell themselves out to Rockefeller or go out of business. Owing to limited government control on oil prices then, Rockefeller contributed to mass crowding out of average and startup firms in the oil industry. The immorality of suppressing other firms amounted to economic saboteur that labeled Rockefeller as a robber baron.

In a sign of forceful monopolization of the oil market, Standard oil even had thugs that were deployed is certain cases to intimidate unrelenting competitors. Such strategies were out outrageous and promoted abuse of monopoly[6]. Under the concept of “in harmony”, Rockefeller had a secret arrangement with railroads to refuse transporting oil of its competitors that did not agree to “in harmony” deals. Rockefeller therefore maliciously cut the supply of its competitors and in return conquered the market. Such corrupt business strategies override the philanthropic and Christian values that Rockefeller portrayed. Rockefeller had reached a level of wealth and facilitated the creation of anti-trust law. Despite a dragging court case in 1897, Ohio, Standard oil affiliate companies blatantly failed to show up [7]. It is clear that Rockefeller took American oil industry by a storm and almost stage-managed the direction of the economy in the wake of industrialization. In respect to the growing discontent among people and the government, Rockefeller secretly owned minority share in some other companies and hence manipulated the industry to satisfy personal greed for profit. Rockefeller’s unorthodox competitive techniques presented an economic threat to the US as oil was at the center of industrialization[8]. Standard oil gained significant influence across government agencies and almost singlehandedly decided on the prices. It highhandedness confused the public, frustrated the judicial system and continually promoted it.

Although Rockefeller left a legacy of several philanthropic projects, his method of managing Standard oil made the public to believe that he was a champion of business malpractice. He is therefore a confirmed member of the industrialist robber barons in the history of the United States economic development.

[1] Chalmers, David M. 2012. History of the Standard Oil Company: Briefer Version. Dover Publications. http://public.eblib.com/choice/publicfullrecord.aspx?p=1894317. p.14-6

[2] Ibid,.p.54-7

[3] Ibid,p.58-9

[4] The social history of crime and punishment in America. An encyclopedia. 5 vols. 2012. London: Sage Publications.p.43-5

 

[5] Ibid,p.46-7

[6] Straubhaar, Joseph D., Robert LaRose, and Lucinda Davenport. 2018. Media now: understanding media, culture, and technology.p.71

[7] Straubhaar, Joseph D., Robert LaRose, and Lucinda Davenport. 2018. Media now: understanding media, culture, and technology.p.71

 

[8] Chalmers, David M. 2012. History of the Standard Oil Company: Briefer Version. Dover Publications. http://public.eblib.com/choice/publicfullrecord.aspx?p=1894317.p.92

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