By Kenneth G. Pringle
Before Standard Oil became "the most gigantic, the most cruel, impudent, pitiless, and grasping monopoly which ever fastened upon a community," it was a start-up.
John D. Rockefeller was 24 in 1863 when he invested in the emerging new technology of distilling crude into kerosene. Some believed this clean-burning fuel might one day replace whale oil as America's chief indoor lighting source.
Rockefeller didn't quit his day job, in the produce business, since the oil scheme remained mostly aspirational. And he still had to find something to do with the waste product that resulted from the kerosene-making process: gasoline.
We know how the story turns out. Like Bill Gates, Mark Zuckerberg, and other entrepreneur-moguls who followed, Rockefeller leveraged his early success in a new high-tech industry into market dominance. Standard Oil at its peak controlled 90% of the U.S. crude market.
Rockefeller succeeded through vision, hard work, and ruthless tactics -- and in the end, his creation was broken up by regulators. That same fate befell American Tobacco and AT&T, among others, and has threatened the practices of Microsoft, Meta Platforms' Facebook, Alphabet's Google, and fellow modern titans.
In America, there's a sense that too much success in business is a bad thing, and that everyone needs to play fair.
That is the concept behind U.S. antitrust laws developed beginning in the late 19th century to rein in monopolies like Standard Oil.
"[I]t should be as much the policy of the laws to multiply the numbers engaged in independent pursuits, or in the profit or production, as to cheapen the price to consumers," wrote the Ohio Supreme Court in 1892, the first time Standard Oil was broken up.
Rockefeller got around that ruling. But Standard Oil finally went under the knife in 1911, split into 34 separate companies that sometimes seem like they are bent on reunifying.
While Rockefeller was the most spectacularly successful at monopoly building -- what he gently termed "cooperation" -- he was also part of a greater movement in American business toward rationalization and centralization. That is, putting all facets of an operation under the command and control of one central administrator.
Rockefeller and contemporaries like financier J.P. Morgan and steel magnate Andrew Mellon were known as " robber barons." Their counterparts today go by terms like techno-oligarchs. They face the same antitrust concerns.
Founding Fathers including Washington and Hamilton encouraged " manufactures," though businesses in the early Republic were necessarily small and locally oriented.
The possibility for national markets was brought about by the railroad, which by the 1870s had connected all major U.S. cities and many minor ones, and the telegraph that ran beside it.
Industry spread, too. But markets tended to remain local, with varying prices and quality of goods from one place to the next.
The salt barons of Michigan decided to do something about that. The state's natural salt "licks" had long been harvested by Native Americans, and by 1888 Michigan produced 40% of U.S.-manufactured salt.
The operation was tightly controlled by the Michigan Salt Association, a "pool" comprising most state producers. The association insured quality, directed distribution, and set prices -- which, because of its market power, were followed across the nation.
For many Americans, this was an improvement.
"The salt association was thus a classic example of an effort by producers to rationalize the methods of production, and, more important, marketing," Page Smith writes in The Rise of Industrial America.
It also formed a functional monopoly, sparking concerns of excessive profit-taking.
"Equally important, the practice violated the venerable principle of free competition," Smith writes, and the association dissolved amid antitrust challenges by 1890.
Many industries followed the same playbook, including cordage, paint, and even crackers, where National Biscuit (Nabisco) controlled 90% of the market.
Rockefeller surpassed them all.
Once his first refinery proved successful, he started buying rivals, improving some, closing others. The price of kerosene plummeted to 26 cents a gallon in 1870, from 58 cents in 1865.
Rockefeller didn't always play fair. In 1872, he leveraged secret fare reductions from railroads to buy out 22 of 26 competitors in the "Cleveland Massacre," a fact revealed by Ida Tarbell, the original investigative reporter.
In 1882, Rockefeller created the Standard Oil Trust. Nine trustees ran dozens of companies as one, controlling the market from exploration to retail, and paying out handsome dividends.
"The combination is here to stay. Individualism has gone, never to return," Rockefeller later declared.
In Rockefeller's defense, as a business owner, you would rather have a job done by your own trusted people than pay an unknown third party to handle the task.
Rockefeller just took it to extremes, so that all the workers were his people.
In 1911, the U.S. Supreme Court found Standard Oil guilty of practices deemed " unreasonable" in restraining trade, separating 33 operating units from their parent, unleashing a world of "oil majors" like Exxon Mobil and Chevron.
The "rule of reason" now guides all antitrust decisions.
AT&T narrowly avoided a breakup a couple of years later, mostly because it had the nation's only working long-distance telephone network. The government granted AT&T the status of a regulated monopoly, and it became one of the largest and most successful companies in U.S. history.
Still, its control of the industry -- and Americans' daily lives -- earned AT&T the epithet "Ma Bell." And in its high and mighty position, it became an object of ridicule.
"We don't care. We don't have to. We're the phone company," Lily Tomlin cackled, catching the national mood as Ernestine the Telephone Operator on the TV show Laugh-In (1968-73).
It took another decade, but the Bell system was broken up into the Baby Bells, ushering in a new world of phones not attached to the kitchen wall.
Both Microsoft ( 2001) and Google ( 2025) have had to adjust business practices after violating antitrust laws. Amazon.com and Apple have cases pending, while the government is appealing a favorable decision for Meta.
Antitrust cases aren't likely to end anytime soon, as modern-day barons try to toe the line in the antitrust "rule of reason."
And regulators can be expected to take the same attitude toward suspected monopolies as the Ohio Supreme Court did in the 1892 Standard Oil ruling.
"Experience shows that it is not wise to trust human cupidity where it has the opportunity to aggrandize itself at the expense of others," they wrote.
Write to editors@barrons.com
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May 02, 2026 05:00 ET (09:00 GMT)
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