Antitrust historically exists because the market was working to well.
The first Antitrust act in the US was about local butcher being disrupted by 'centralized' slaughterhouses (refrigerated train cars). Antitrust was literally created to attempted to prevent that. This was on state level.
On the federal level mostly the same thing happened. It was a political tool and it was used by politicians who tried to defend the losing competitors against innovated companies.
Standard Oil is the poster-boy for 'look how great anti-trust is' but if you look at what politics was behind it its clear that the losers in the market were pushing it. Despite in reality Standard Oil simply standardizing and improving quality, using innovative logistics system and lowering prices.
Of course the losers were pushing it. They were losers because they couldn't compete against a company that controlled pricing and critical infrastructure across multiple strategic sectors - not just oil.
SO's "innovations" were mostly just efforts to game the system. The federal courts took a clear-eyed view on this and did not see it kindly.
> SO's "innovations" were mostly just efforts to game the system.
That a very reductive view on innovation. Most innovations are not some fancy new technology. They are new way to do deals and partnerships and improve overall process efficiently. That doesn't change the fact that they are real.
Interdicting standardized testing and quality control, is an innovation. Making deals with railroads to have an overall more efficient and cheaper distribution model is an innovation. The railroads agree to it as it allowed them to have higher utilization.
Would you say for example slaughter houses using refrigerated rail-cars is not a real innovation? Its just evil slaughter houses trying to 'game' the system?
At some point in time, doing things a certain way is just more efficient and those companies that can not adopt new processes will be less successful. Had all such innovations been prevented we would be much worse of overall.
Often it actually makes sense for most companies to go out of business, as for overall efficiency it doesn't really make sense to be differentiated into 100s of companies.
> The federal courts took a clear-eyed view on this and did not see it kindly.
No they didn't. Courts didn't create these laws, politicians did. And the enforcement was often very selective and politically driven.
The whole history of Anti-Trust went very strongly along with political interest in it until the 70s.
Anti-Trust lacked a clear definition and eventually the courts, lead by jurist Richard Posner, created a Anti-Trust definition that requires showing that consumers were harmed. Not only some vague accusations of 'market power'. Under that definition things like Standard Oil would not have gone threw.
> SO's "innovations" were mostly just efforts to game the system.
Rockefeller put together the trust in 1882. Within 3 years, the consumer cost of a gallon dropped 70%. If it was gaming the system, the consumers of oil were primary beneficiaries.
> clear-eyed view
Throughout the time of litigation of the anti-trust case against Standard Oil, SO was losing market share because Rockefeller's competitors had figured out to compete with him.
Standard Oil did things like demanding a kickback from railroads on oil shipments, including their competitors' shipments. That's quite a bit more than "simply standardizing and improving quality, using innovative logistics systems and lowering prices". That's flat-out unfair competition. (The railroads went along because of the threat of losing Standard Oil's shipments, which was a really large amount of business.)
I mean, yes, Standard Oil did do a fair amount of standardizing and improving quality, and innovative logistics, and lowering prices. It also did unfair competition.
