THEY made a monopoly? How do you make a monopoly by fining the companies who broke the law, put those responsible behind bars and tell everyone to follow the rules? That's how we handle oligopolies where I come from. How do you do it? Companies can still continue to operate, just within the rules.
Perhaps you just have a crappy government that needs to be replaced? Start campaigning.
Because once you set those laws up, businesses often lobby to change them to their favor. Here's a chunk of text from
Machinery of Freedom:
The difficulties facing private cartels are nicely stated in Rockefeller's description, cited by McGee, of an unsuccessful
attempt (in 1872) to control the production of crude oil and to drive up its price:
. . . the high price for the crude oil resulted, as it had always done before and will always do so long as oil
comes out of the ground, in increasing the production, and they got too much oil. We could not find a market
for it.
... of course, any who were not in this association were undertaking to produce all they possibly could; and as to
those who were in the association, many of them men of honor and high standing, the temptation was very great
to get a little more oil than they had promised their associates or us would come. It seemed very difficult to
prevent the oil coming at that price ....
Rockefeller's prediction was overly pessimistic. Today, although oil still comes out of the ground, federal and state
governments have succeeded where the oil producers of 1872 failed. Through federal oil import quotas and state
restrictions on production, they keep the price of oil high and the production low. Progress.
It is widely believed that railroads in the late nineteenth century wielded almost unlimited monopoly power. Actually,
as Kolko shows, long distance transportation was highly competitive, freight rates were declining, and the number of
railroads was increasing until after the turn of the century. One line might have a monopoly for short distances along
its route, but a shipper operating between two major cities had a choice of many alternative routes—twenty existed
between St. Louis and Atlanta, for instance. Railroad rebates, frequently cited as evidence of monopoly, were actually
the opposite; they were discounts that major shippers were able to get from one railroad by threatening to ship via a
competitor.
Rail executives often got together to try to fix rates, but most of these conspiracies broke down, often in a few months,
for the reasons Rockefeller cites in his analysis of the attempt to control crude oil production. Either the parties to the
agreement surreptitiously cut rates (often by misclassifying freight or by offering secret rebates) in order to steal
customers from each other, or some outside railroad took advantage of the high rates and moved in. J. P. Morgan
committed his enormous resources of money and reputation to cartelizing the industry, but he met with almost
unmitigated failure. In the beginning of 1889, for example, he formed the Interstate Commerce Railway Association to
control rates among the western railroads. By March a rate war was going, and by June the situation was back to where
it had been before he intervened.
By this time a new factor was entering the situation. In 1887, the Interstate Commerce Commission was created by the
federal government with (contrary to most history books) the support of much of the railroad industry. The ICC's
original powers were limited; Morgan attempted to use it to help enforce the 1889 agreement, but without success.
During the next 31 years its powers were steadily increased, first in the direction of allowing it to prohibit rebates
(which, Kolko estimates, were costing the railroads 10 percent of their gross income) and finally by giving it the power
to set rates.
The people with the greatest interest in what the ICC did were the people in the rail industry. The result was that they
dominated it, and it rapidly became an instrument for achieving the monopoly prices that they had been unable to get
on the free market. The pattern was clear as early as 1889, when Aldace Walker, one of the original appointees to the
ICC, resigned to become head of Morgan's Interstate Commerce Railway Association. He ended up as chairman of the
board of the Atchison, Topeka, and Santa Fe. The ICC has served the railroads as a cartelizing agent up to the present
day; in addition, it has expanded its authority to cover other forms of transportation and to prevent them, where
possible, from undercutting the railroads.
He then goes on to describe the process even more effectively done with the Civil Aeronautics Administration.
It's from reading the occasion news article like this
RIAA lobbyist becomes federal judge, rules on file-sharing cases which makes me believe the process is still common today.
