The Rockefellers are a powerful family due to the immense wealth and influence they have accumulated over generations. The source of their power can be traced back to the business empire built by John D. Rockefeller, who is widely regarded as one of the most successful and influential businessmen in American history.
The key factor that contributed to the Rockefellers’ power was the creation of one of the nation’s first and most profitable monopolies in the oil industry. John D. Rockefeller founded the Standard Oil Company in 1870, which quickly grew to dominate the oil refining and distribution business in the United States. Rockefeller achieved this by employing several strategies, including colluding with the railroads and undercutting his competition.
Collusion with the railroads was a crucial aspect of Rockefeller’s strategy. He negotiated secret deals with railroad companies to secure preferential rates for shipping his oil, giving him a significant advantage over his competitors. By obtaining lower transportation costs, Rockefeller was able to offer lower prices for his oil products, thus driving other companies out of business.
Another key element of Rockefeller’s success was his ability to undercut his competition. He used his enormous financial resources to engage in predatory pricing, selling his products at prices below production costs. This strategy allowed him to drive smaller competitors out of business, further consolidating his dominance in the industry.
The consequences of Rockefeller’s monopolistic practices were far-reaching. As Standard Oil grew in power and influence, it controlled approximately 90% of the oil refining capacity in the United States by the early 1880s. This level of control allowed Rockefeller to dictate prices, control the market, and exert significant influence over the entire oil industry.
The immense wealth generated by Standard Oil allowed the Rockefellers to consolidate their power and influence in various ways. They invested in other industries, such as banking, railroads, and real estate, diversifying their holdings and further expanding their influence. This diversification also helped protect their wealth from fluctuations in the oil industry.
The Rockefellers’ power was not limited to their business empire. They were also known for their philanthropy, particularly through the establishment of the Rockefeller Foundation in 1913. This foundation became one of the largest and most influential philanthropic organizations in the world, enabling the family to shape social, educational, and medical initiatives globally.
The power and influence of the Rockefellers were not without controversy, however. The monopoly created by Standard Oil faced increasing scrutiny and criticism for its anti-competitive practices. In 1911, the U.S. Supreme Court ruled that Standard Oil was in violation of the Sherman Antitrust Act and ordered its breakup into multiple smaller companies. Despite this, by the time the monopoly was dissolved, the Rockefeller fortune had already been firmly established.
The Rockefellers’ power stems from the creation of a highly profitable monopoly in the oil industry, achieved through collusion with the railroads and undercutting competition. This allowed John D. Rockefeller to amass an immense fortune and establish a business empire that extended beyond oil. The family’s power was further solidified through philanthropy and investments in various industries, enabling them to exert significant influence over society and shape the course of history.