Describe the rise of J.D Rockefeller.
Answers
The story of John D. Rockefeller and the Standard Oil trust is one of the most controversial in business history. Not only is it regularly used as the classic case for free markets inevitably leading to abusive and hostage-taking monopolies, but it also serves as one of the prime examples justifying the need for government regulation of competition and the adoption of the Sherman Antitrust Act (never mind the fact that the Sherman Act was adopted in 1890, but applied to Standard Oil only 20 years later).
Rockefeller’s story made the subject of many books and articles, starting with emotional, misleading muckraker publications, all the way through dry business studies and some more approachable biographies. Mr. Doran’s work finds itself on the more welcoming side of these works, and is a fresh addition to the rich literature on the subject. Moreover, his book takes a wider look at the Standard Oil’s business career, putting it in an international context. Regrettably, as far as the Standard Oil company is concerned, this look is sometimes much too wide, relying mainly on Ron Chernow’s previous biography of Rockefeller (Titan: The Life of John D. Rockefeller, Sr.) and neglecting other valuable economic and historical studies on the subject.
Seeking Balance
Published in 1998, Ron Chernow’s Titan was the first full-length biography of John D. Rockefeller since the one published by Allan Nevins almost half a century before. It also came at an opportune time as public debate again settled on the problem of monopolies and the need for government intervention to protect the “freedom” of our markets. This time, it was Microsoft’s turn to be subjected to State antitrust scrutiny, and Bill Gates was at the time commonly compared to Rockefeller (although, beyond superficial similarities in their positions, anyone familiar with their biographies would have steered clear of such comparisons).
Chernow’s biography of Rockefeller attempted to tell a balanced and fair history of this titan of industry, and, for the most part, it succeeded. While the progressive muckrakers Henry Demarest Lloyd and Ida Tarbell excoriated the “robber baron” for monopolizing the oil industry and abusing its consumers, biographers such as Allan Nevins depicted Rockefeller in an admiring and heroic light, overcompensating in an effort to set the historical record straight. Chernow tried to maintain a composed approach and presented his subject as both wrong-doer and benefactor, giving credit to Tarbell where it was due, but speedily repudiating certain falsehoods.
Although Chernow had access to mostly the same research material as Nevins, his work still presents new or previously unused details of Rockefeller’s life; additionally, fresh material relating to personal and familial matters was made available to the author, and he made good use of it in presenting a mostly impartial picture.
Unfortunately, rather than giving a proper vindication of Rockefeller’s business practices, Chernow balanced the businessman’s ruthlessness with his lifelong philanthropy, highlighting the way in which his strong Baptist beliefs shaped his vision of himself as an entrepreneur favored by God’s blessing as well as a humanitarian patron charged with improving the state of the world. Despite convincingly attributing Standard Oil’s growth to many of its innovative entrepreneurial accomplishments, Chernow fell short of addressing the economic case behind the company’s business practices and is visibly troubled by the railroad rebates or the “predatory pricing” on which Tarbell based her attacks.
The Standard Oil's "Predatory" Pricing
Following in Nevins’s footsteps, Chernow acknowledged a certain commercial reasoning behind railroad rebates and even the fact that the Standard Oil combination was more like a federation of independently managed (and sometimes uncoordinated) companies rather than a single unit under Rockefeller’s despotic rule. He even mentioned the fact that the Standard Oil’s pricing policies were not uniformly “predatory” (although he didn’t expand on how a dynamic pricing strategy in the face of different sellers is essentially competitive rather than monopolistic), but never saw beyond the antitrust rhetoric which claims that the Standard Oil gained and maintained its monopoly position by undercutting its competitors and subsequently buying them out.