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Comment by neaanopri | Hacker News Reader

It's shocking that they present this story as a tale of virtue. If being an entrepreneur is a noble calling, then we should be ashamed of Rockerfeller for his ruthless tactics, not praising him for it. If we want to praise capitalists and capitalism, then we should be villifying Rockerfeller for his monopolistic tactics. He was too clever by half as a CEO, since his tactics eventually brought down the ire of the government. And he felt the need to atone for his horrific business practices by charity, assuming that one of them would cancel out the other. He deserves to have the ruthless, terrible reputation the article laments him having.

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> horrific business practices

I recommend that you read "Titan" by Chernow. Rockefeller is mostly guilty simply of being very rich. During his career, he caused the price of kerosene to drop 70%, and stay down. This was good for the expanding country.

During the anti-trust trial, Rockefeller was steadily losing market share to nimbler, aggressive competitors. There was no need for the government to break it up, it was coming apart anyway.

All businesses rise and fall over time. The popular narrative that, unchecked by government, a business will eventually rise to absorb everything is not borne out by practice.

> The popular narrative that, unchecked by government, a business will eventually rise to absorb everything is not borne out by practice.

I get your point, but there are exceptions. In particular, utilities come to mind. All locations I've lived except 1 provided exactly one option for high-speed internet. I don't see that changing in most parts of the US any time soon. Ditto for water and electricity, depending on locality. Even temporary monopoly abuse in either of those two sectors can have devastating humanitarian impacts.

Aren't most utilities gov't supported monopolies? I think the logic is that for some utilities it doesn't make economic sense to have 5 companies all providing water to a house (5 water lines underground?).

The gov't gives the utility a monopoly in exchange for full coverage to all customers and pricing oversight.

There are plenty of examples where private companies control water distribution without government assistance or oversight if you look past the USA. We don't need fanciful theoretical speculation to know what happens in practice.

(note: not continuing with this thread because holy fuck hivemind downvotes.)

> All businesses rise and fall over time. The popular narrative that, unchecked by government, a business will eventually rise to absorb everything is not borne out by practice.

Interesting assertion, do you have any books/data to back that up?

The entire history of economics backs this up. The only instances of long-lasting monopolies are the result of government coercion. The instability of large, profitable businesses has both a solid theoretical foundation and an unending abundance of empirical data.

If you ever think you have found a single instance of monopoly lasting any significant length of time, look deeper - with absolute certainty there is a government gun backing it up.

Irrelevant since it's a straw-man. It doesn't matter if monopolies self destruct over enough time, the point of regulation is to avoid them to begin with because they're not good for capitalism.

It does matter. Monopolies are not "good for capitalism" if they prevent honest competition from battling the monopoly for business. If, as argued above, monopolies naturally "self-destruct" in favor of newer, more ferocious competitors, then regulation isn't necessary.

> If, as argued above, monopolies naturally "self-destruct" in favor of newer, more ferocious competitors, then regulation isn't necessary.

Absolutely incorrect as it allows for the abusive monopoly to exist for an undetermined amount of time possibly preventing competition more than long enough to do harm. This argument is equivalent to saying all murders die eventually so there's no need to outlaw murder.

Just because something self destructs "eventually" is not sufficient reason to not regulate it and is certainly not a good argument against regulation.

edit replying to below:

> I'm curious what harm you accuse SO of. Keep in mind that SO dropped the price of kerosene by 70% and kept it down. reply

Why should I keep that in mind? Doing a good thing doesn't mean you didn't also do bad things so that's simply not a relevant fact in this discussion.

It is historical fact he used anti-competitive practices[1] to sabotage the competition, the harm caused was to those trying to compete with him and it's exactly the reason we now have anti-trust laws.

[1] https://en.wikipedia.org/wiki/Standard_Oil#cite_ref-31

I'm curious what harm you accuse SO of. Keep in mind that SO dropped the price of kerosene by 70% and kept it down.

"If you ever think you have found a single instance of monopoly lasting any significant length of time, look deeper - with absolute certainty there is a government gun backing it up."

But that caveat lets the horse out of the barn, since the gains made by monopolies can purchase lobbyists and thence the government gun. Disney Studios has been around 93 years at this point.

What, precisely, does Disney have a monopoly on? Last I checked there were at least several major movie studios, TV stations, and animation houses doing very well for themselves independently of the mouse.

Mickey Mouse.

Intellectual property is considered a monopoly assigned by the government.

My example aside, is it really so hard to believe that successful companies can influence regulation? Monopolies are exceptionally successful companies.

I think that one modern example is "The Innovator's Dilemma".

> The popular narrative that, unchecked by government, a business will eventually rise to absorb everything is not borne out by practice.

There is no such popular narrative-that's merely a strawman you've created-the popular narrative is that monopolies can and do form (not always, but can) in the absence of government rules to prevent them and that such monopolies are bad for capitalism. That is a fact borne out by history.

> Rockefeller is mostly guilty simply of being very rich

No, he's guilty of abusing the power of his near monopoly to sabotage competition just as the OP said. He's not reviled for his wealth, but for the unethical ways in which it was maintained.

All businesses rise and fall over time. The popular narrative that, unchecked by government, a business will eventually rise to absorb everything is not borne out by practice.

Businesses do rise for a period of decades, however, and can do a lot of damage along the way should they decide to leverage monopoly or otherwise kill competitors unfairly.

Rockefeller might have done some good with his wealth, but he was neither obligated to do so, nor was it inevitable that he do so.

In addition to the other comments, I would also note that it's untrue that Rockefeller started doing philanthropic work as "atonement" for his business practices. Even as a young man just getting his start as a bookkeeper at a small merchant, he gave a significant portion of his then-meager pay to charity.

He was a complicated man, no doubt, and he tended to gloss over some of the consequences of his actions when recalling his past, but he was, mostly, just vilified for being a brilliant businessman at a time when it was popular to do so.

I imagine this complexity comes from his combination of economic and religious values. Interestingly, it was not uncommon for Protestants to have this kind of dilemma - they were encouraged to work very hard (see "The Protestant Work Ethic") for having success in life was the only indication that one was in god's favour. However, it was forbidden to actually spend one's earnings on selfish pursuits thus many Protestant businessmen reinvested the money into their enterprises which only increased their earning power.

On top of that, his father was a philandering, alcoholic, gambling bigamist that left he and his mother when he was quite young. He strove all his life to not be "that guy".

All of us raised in a capitalist society abide by this social contract, and as such it is more beneficial to have examples of people that played by more effective sets of rules than the next person.

People have learned from this by having a settlement (or rainy day fund) specifically for the government.

You can use it as educational, as a cautionary tale, but there isn't need to pass any retroactive judgment on it, in my opinion. No need to either rosy it up, or highlight something you would rather consider abominable.

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