Wednesday, 15 May 2013
Original and sharpest monopolist and manipulator
If you want to know how to run an oil monopoly and control prices, have a look at this fellow: John D Rockefeller.
The European Commission may have raided Shell, BP and others over suspected manipulation of oil and fuel prices (not yet shown to be guilty of anything, of course), but Rockefeller's grip on the business will never be matched.
In the 1880s he controlled 90% of all the world's oil refining capacity and around a third of oil production.
That's because most of it was in the United States and a substantial chunk where he set up in business, in Ohio.
But, interestingly, oil and kerosene prices fell over the decades he was the top oil baron.
He focused his market power on rivals and on transport companies.
First he strong-armed rail companies into carrying his oil at a discount. Then he bullied rival refiners into selling their businesses to him - they realised they couldn't compete. And he bought up pipelines.
The Rockefeller billions came from squeezing the life out of oil well owners and business rivals.