Herr Bischoff

The Beggar Barons

In the late 1800s John D. Rockefeller devised an ingenious plan for Standard Oil. He had Standard Oil open gas stations in towns with competition, and Standard Oil would sell its products at a significant loss. This was fine for Rockefeller because he was worth billions of dollars, so Standard Oil could easily eat the losses. These lower prices would bankrupt the local competitors because they couldn’t lower their prices and survive. After all of the competition was wiped out Standard Oil would buy up the dead competitors, turn them into Standard Oil stations, and then raise the prices far beyond the real market price because Standard Oil now had a monopoly in that area.