2. Major Themes of the Week #1. Horizontal & Vertical Consolidation #2. Robber Barons #3. Fight against Trusts
3. PART 1: Horizontal & Vertical Economic Models Horizontal Consolidation = One company buys all of the other companies that it is competing with. Why?? ï If you have no competition, you can charge whatever you want to because consumers must come to you for a product Example: Standard Oil Vertical Integration = One company buys all the steps necessary to create, distribute, and sell their products. Why?? ï If you own everything involved, you limit your costs and control access to the resources in order to prevent the competition from getting them Example: US Steel
4. PART 2: Robber Barons Robber Barons refers to those industrial leaders who made TONS of money while at taking advantage of employees and consumers Often, the same people who threw their workers under the bus donated millions to their communityâŠdid these balance out?
6. PART 3: Anti Trust The Sherman Anti Trust Act What: An attempt to prevent large companies from forming and monopolizing and industry Why: Lack of competition leads to high prices and unstable markets Success: Noooooo! Too hard to prove, too hard to enforce, and too hard to stop. In the end, the US Govt stops enforcing the Act because of pressure from big business.
