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RETHINKING THE ECONOMIC BASIS OF THE STANDARD OIL REFINING MONOPOLY: DOMINANCE AGAINST COMPETING CARTELS

By George L. Priest

Abstract

The success of the Standard Oil monopoly is not well understood. Standard Oil first developed a monopoly over the refining of crude oil, though later extended its control to gathering pipelines, later still to trunk pipelines (from the western Oil Regions to East Coast ports) and, even later, expanded operations to include oil production (drilling) and retail sales at the time the Supreme Court ordered its dissolution over 100 years ago, in 1911. Though there are several journalistic exposes of Standard Oil including Henry Demarest Lloyd and Ida Tarbell, as well as business histories-none are fully explanatory. The currently dominant theory of Standard Oil\u27s success is by Elizabeth Granitz and Benjamin Klein who assert that Standard Oil was chosen by oil shippers, the railroads, to police a railroad cartel. According to Granitz and Klein, the railroads split with Standard Oil the profits from cartelization of the crude and refined oil industry

Topics: Law
Publisher: Yale Law School Legal Scholarship Repository
Year: 2012
OAI identifier: oai:digitalcommons.law.yale.edu:fss_papers-5937
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