Sutton Smith, Monopolies in America Through the Ages

Since the men who greatly expanded the country with railroads, steel, and oil, there have been many people and companies that have taken over large portions of the American economy. Over time, many of these companies have been broken up or their power has faded away. With the increase in technology, our current empires such as Google, Tesla, and Amazon have more power and influence over Americans than ever before. However, while these companies directly impact more people, the older monopolies have had a more direct impact on the country’s economy. The breaking up of Carnegie Steel and AT&T also seems to continue to have an impact with these modern top businesses, as they try to avoid being separated. I have looked at the formation of these businesses and their leaders, as well as compared the monopolies we see today to those when America was first becoming industrialized.

One of the first monopolies in this country began with the rise of the railroad system. Cornelius Vanderbilt, later nicknamed “the Commodore’’, began his career by using money loaned to him to buy a boat. Over the next few years, he ferried passengers across New York City, and was able to keep reinvesting until he obtained a small fleet of ships. Vanderbilt was always looking to expand, and despite dropping out of school at 11, had an unbelievable business mind (Schneider).

Cornelius always focused on the movement of people, first by his various water transportation businesses that soon began to expand across the country. However, in the 1850’s with the start of the railroad

industry, Vanderbilt saw exponential opportunities. He invested heavily into the New York and Harlem Railroad, so much so that by 1863 he owned the entire line. By the time he completely shifted to railroads, he had amassed a net worth of over 30 million (“Cornelius Vanderbilt - Industry”). He continued to buy out smaller railroad companies by strategically shutting off certain lines and running competitors out of business.

While his acts were not always moral, his business-focused mind led him to own nearly all of the main railroad tracks across the country. Over his time in business, Vanderbilt was able to standardize procedures and train stops, as well as vastly improve shipping times, creating a much better and more efficient economy. Vanderbilt’s reign would eventually come to an end as he passed away, but he left behind over $100 million dollars, as well as his famous Biltmore Estate (“Cornelius Vanderbilt - Biography”).

Another key figure in the days of the Industrial Revolution was Andrew Carnegie. Carnegie was able to change the way Americans lived their lives through the steel he sold with his business: Carnegie Steel Corporation. Carnegie started as an emigrant who came to America and worked his way up from nothing. Starting when he was just 13, he was put to work from sun up to sun down, earning a measly $1.20 per week. Eventually, he landed a job at the Pennsylvania Railroad, and was then promoted to superintendent (Carnegie). Carnegie began to start his own railroad ventures, but soon became fascinated in the ever-growing steel economy.

Carnegie was able to start a steel manufacturing plant, and grew it to become the largest in the nation. He used the business strategy of vertical integration to achieve this. This process involved him not only making the steel, but also owning the mines and transportation as well.

This helped to minimize the work he sourced, which led to cheaper costs and being able to maximize profits (“Andrew Carnegie - HISTORY”). Because of this, he was able to prevail over his competition, and soon became the one main source for all steel goods.

Over Carnegie’s life, he was able to amass hundreds of million of dollars, an equivalent to around 75 billion in today’s money. Without Carnegie, infrastructure wouldn’t be what it is today. In 1901, J.P. Morgan bought Carnegie Steel for $480 million, allowing Carnegie to distribute his fortune and do much good with it. He had libraries, churches, and several non profits established, and truly was one of America’s great economic heroes (“Andrew Carnegie”).

In comparison to today’s monopolies, we also see a select few individuals towering among the rest. Elon Musk and Jeff Bezos stand out as some of the richest and most influential business figures in the world. These American entrepreneurs have taken different paths than their predecessors, but still have an enormous im-

pact with the companies they have created. There are also many similarities in the way they built their businesses, leading to the same type of patterns throughout history.

Elon Musk is one of America’s most notorious billionaires, creating several successful companies, and introducing technology never before seen. Musk is a South African-born American that started the developments of PayPal, SpaceX, and Tesla, among other companies such as his internet service, Starlink (Gregersen). For Musk, growing up in South Africa with divorced parents was anything but ideal. On top of that, he also had to live with an abusive father. Because of this, Elon had a hard time making friends in school, and found himself using books to keep him company. Even though he faced much adversity, he started developing video games at 10 years old, and ended up moving to Canada to avoid serving in the South African military. Musk used this technological mind to build many successful technology-centered businesses. Specifically with Tesla, he has created the largest electronic car company, and is developing the capabilities to have full self driving vehicles. His mission statement is that he wishes to “accelerate the world’s transition to sustainable energy”, according to Tesla.com (“About Tesla”).

Jeff Bezos has changed the lives of nearly every American with his development of Amazon. Today, nearly everyone relies on Amazon to get common goods quickly to their home. Bezos had a more standard upbringing and was an exceptional student; after being the valedictorian of his high school class, he was able to obtain two degrees from Princeton University. He went on to work at various firms on Wall Street, but found his interests in the Internet, and decided to create an online shopping platform for books (Clarine). Bezos was able to turn his business from selling books out of his garage into the largest ecommerce store on the planet. Today, Bezos has an estimated net worth of 171 billion dollars, and has changed the way the world buys goods (“Jeff Bezos - Space, Wife & Amazon”).

I have found that with many of the wealthiest individuals, many of them are self-made and have had innovative ideas and an outstanding work ethic. While there are many wealthy individuals that have had money passed down through generations, these tycoons truly show that the American dream is still alive and well today. In the past, these top individuals have focused mainly on the physical needs and resources of the American people. While today billionaires also improve the daily life of individuals, they usually do so more with the technology they create and provide, rather than by mass amounts of a single physical good. However, companies like Amazon have been able to combine these two approaches by selling thousands of goods through an online platform.

From the Industrial Revolution to today, there have been countless individuals that have emerged to be the wealthiest in the world. These people have created

monopolies in their respective fields, and this has allowed them to obtain mass growth and adoption. While these companies are great for individuals’ lives, they also demote competition due to their massive size, and could violate rules that the United States has against monopolies in certain business areas.

In the past, there have been several companies shut down due to their massive size. Because many lawmakers saw the old monopolies take up such immense spheres of the economy, the Sherman Anti-Trust acts were passed in 1890 to help prevent these monopolies from forming. According to economy expert Will Kenton, “the act aimed to promote economic fairness and competitiveness while regulating interstate commerce” (Kenton). From this point forward, big companies like Standard Oil and American Railway Union were legally pressed for their actions. This was the first time monopolies were attempted to be shut down, and these acts have continued to be used today (Kenton).

In more recent times, AT&T was broken up due to these acts. In 1984, the telephone company was broken up into seven separate businesses. The breakup did have a positive benefit for the users, giving them more choices and lower prices for their cell carrier needs (Beattie and Schmitt). These monopolies can be great for the billionaires that own them and to unify people, but they do decrease competition and do not allow for other companies to compete. Many companies such as Facebook and Google face these Trust Acts today, and are battling with the legal system to keep their empires intact (Falcon).

From my findings, I assume that these patterns in history will continue to occur. As our society becomes more advanced, we will likely continue to see billionaires emerge, and new companies form that change the day to day life of the American people. While there are certain businesses that will try to stay on top, with the advancement of the legal system to help ensure a fair economy, I feel that new companies will still be able to form. As our world continues to unify through the advancement in technology, I hope that there are still many companies that we rely on on a day to day basis, instead of just one central business.

Throughout history, various monopolies have emerged from the areas of railroad transportation to computers. There have been continuous patterns that can be seen between these companies, from the leaders that build them to the strategies used to stay on top. However, today, there has never been more pressure on companies to avoid creating complete monopolies and be split up. Today’s top companies strive to be the best in their industry, while still having more fair wages and better working conditions than the monopolies of the past. The pattern of monopolies has been seen for centuries, and is likely to be seen for centuries to come. *Works Cited page available upon request.