And The Country Grew Rich

"You know that great prejudice exists against all successful business enterprise - the more successful, the greater the prejudice."

John D. Rockefeller (1839-1937)

As a young man, working as an office assistant for 50 cents a day, it is said that Rockefeller's great ambition was to have $100,000 and live to be 100.

He missed the first goal by a long shot, but nearly succeeded in the second!

Lining up third in the history of wealthy men (behind Andrew Carnegie and Sam Walton), John D. Rockefeller did it through business.  Adjusted for inflation some say he is the richest.

Although quite responsible for a lot of the economic development of the country during the Industrial Revolution, he was quite reviled in his time.

Living today, the word "revile" would not approach what the current gubment, and a lap-dog press, would do to him and his company.

According to my Oxford dictionary, "prejudice" is defined as a preconceived opinion that is not based on reason or experience.  It comes from the Latin word praejudicium, which means judgment in advance.

As regards successful business, Rockefeller says that there is "great prejudice."

That was in part fomented by the press in his era.  The New York World newspaper said, "Standard Oil is the most cruel, impudent, pitiless, and grasping monopoly that ever fastened upon a country."  Another muckraker, Ida Tarbell, wrote a book entitled The History of the Standard Oil Company.  Her book, in her words, "documented the company’s espionage, price wars, heavy-handed marketing tactics, and courtroom evasions."  Her father's oil company had been buried by Standard Oil and she was going to get it back!

But Rockefeller never said a word about her.  He did, in his own defense, say, "In a business so large as ours ... some things are likely to be done which we cannot approve. We correct them as soon as they come to our knowledge."

What did he do?  Organized horizontally and vertically, controlling about 80% of the country's oil at one point, his business developed drilling, refining, pipeline, transportation and distribution systems.  It is said he would arrive to the refinery at 6am to personally roll full barrels of oil into position for shipment.  Oil became cheap and affordable.  He developed over 300 oil-based products, including consumer items ranging from Vaseline to chewing gum.

His company was called a monopoly.  At its height Standard Oil employed over 100,000 people.

In 1911 Standard Oil was found in violation of the Sherman Anti-trust Act.  The "trust" controlled about 70% of the country's refined oil market, but only 14% of the U.S. crude oil supply at that time.  Standard Oil was broken up into 34 smaller companies.

What happened?  They all grew explosively (many still exist today - like ExxonMobil) and Rockefeller's personal fortune increased to over $900 billion.  Today's richest men are pikers compared to Rockefeller.

John D. lived in retirement for the last 40 years of his life.  However, he devoted his life to what he called "targeted philanthropy."  The extent of his philanthropy was huge, but not calculable.  He gave privately, and did not give for public notice.  And his whole life he tithed 10% of his pay check to his church.  His generosity is never touted.

So, was all this good or bad for the country?

His organization and business skills, and the practices he pioneered, helped feed the industrial revolution.  Immigration came from all over the world to find its fortune working for him, and the other "monopolies."

The business magnates of this era basically made the U.S., and made the west, RICH.  

They were heavy handed, to be sure.  They were ruthless, to be sure.  Would they get away with all that today?  Likely!

Some might call Standard Oil and the other business magnates of the Industrial Revolution monopolies.  But those magnates would call it free enterprise.

PROFIT IS MERELY THE MARKET RESPONDING TO WHAT A BUSINESS IS PROVIDING IT.  CONSUMERS, AND PERSONAL CONSUMPTION, RESPOND IN A BIG WAY TO A NEEDED AND WANTED PRODUCT. TODAY PERSONAL CONSUMPTION COMPRISES ABOUT 70% OF THE ECONOMY!  THOSE COMPANIES PROVIDING THE MOST-WANTED PRODUCTS ALL PROFIT! 

DID THESE MAGNATES, AND ROCKEFELLER IN PARTICULAR, LIFT OR SINK THE ECONOMY?  WERE THEY A RISING TIDE, RAISING ALL BOATS AS IT WERE, OR A FALLING ONE, BRINGING EVERYONE DOWN?   

 

AND HOW COME BREAKING STANDARD OIL UP INTO 34 SMALLER ENTITIES DIDN'T STOP IT FROM DOING WHAT IT DID BEST - OIL PRODUCTION AND DISTRIBUTION, AND GROWTH?

Think carefully...