February 25, 2016

Today in History: Creation of U.S. Steel -- and economic paranoia (1901)

John RobsonResident Historian

On February 25, 1901, J.P. Morgan and Elbert Gary pretty much buried American free enterprise by creating the behemoth U.S. Steel. 

Along with giants like J.P. Rockefeller’s Standard Oil these “monopolistic” corporations would have crushed the competition and taken over the economy and politics if only the wonderful benevolent government had not stepped in.

Either way, markets were obsolete.

At any rate, that’s the standard left-wing paranoid story. But in fact U.S. Steel was too big to be efficient, and rapidly lost market share to smaller more nimble competitors. Today it’s just one fairly small player.

Government, on the other hand, remains a colossus with economic and political power almost impossible to resist.

Strange how that happened.

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commented 2016-02-28 21:55:53 -0500
Thank you professor!! Keep it coming!!
commented 2016-02-25 14:12:26 -0500
Thank you again John for helping debunk the idea that corporations are the problem, when everyone knows or should know it’s interventionist governments are the real problem. Consumers are supposed to pick the winners and losers.