Posted on 08/08/2009 9:50:11 AM PDT by Perseverando
In a series of articles published from 1902-1904, Ida Tarbell attacked Standard Oil, the leading US supplier of kerosene lamp fuel. The centerpiece of Ms. Tarbell's criticism was that the company had engaged in predatory pricing by continually lowering its prices. Her readers must have asked themselves, "How is that a bad thing? Am I supposed to be outraged that the amount I pay for lamp oil has fallen?"
Although company cofounder John Rockefeller had retired from actively managing Standard Oil in 1896, Ms. Tarbell vilified him in her articles, even criticizing his elderly appearance. Populist US president Theodore Roosevelt joined Ms. Tarbell's witch-hunt. Eventually, she stoked enough public hate and envy toward Rockefeller that the courts broke the company into 34 parts.
Economists point out that Ms. Tarbell's predatory pricing theory is unsustainable in a free market. For instance, auto company execs know that a predatory competitor can't offer money losing rebates forever, so they either match the predator's rebates to preserve their market shares or temporarily cut back production and wait out the storm.
To benefit from the ploy, a predator eventually would have to raise prices enough to recover all losses during the price-cutting period. But competitors then would reenter the market and regain their lost share -- or gain an even greater share if the former predator raises prices too much. By then, a predator also might be weaker financially than competitors that conserved cash while waiting for the storm to pass.
Standard Oil did not raise its prices. At the time Ms. Tarbell's exposé appeared, Standard Oil's customers were paying less than a third as much for kerosene compared to what they had paid two decades earlier.
How could Standard Oil seemingly violate the laws of economics and sell its products below cost for decades?
(Excerpt) Read more at americanthinker.com ...
Therefore it will never be mentioned or discussed in a public school. I had a real wacko economics teacher in high school that would have gone over the edge if anything like this was ever brought up.
Are Microsoft products priced at one-third of their 1989 prices?
real m onopolies can only exist with government backing.
I just downloaded Open Office for free. MS Who?
Microsoft is not a monopoly. Some people claim they are just because people are buying their products more than others.
Are Microsoft products priced less than the 1989 prices for IBM, Digital, Honeywell, Sun, and others in the market at that time?
martwain replies:
I believe that nearly all owners of Microsoft 1989 products will give them to you for free. The effective price of Microsoft 1989 products is now zero.
Good read bump
Absolutely correct. Look at copyright changes.
Super find and well done. Libs have never had any shame in any era.
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