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Pluto
Joined: 19 Dec 2006
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 Posted: Fri Jun 26, 2009 6:19 pm Post subject: |
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| Fox wrote: |
| Pluto wrote: |
| But back to the years of 1869 -1913. Think of all the innovation during that time period, particularly the 1890s. Electricity, the light bulb, the telephone, the car and airplane all come to mind. |
Are you trying to link these specific innovations to the market conditions of the era, or are you just commenting that some interesting and useful devices happened to be invented in that time period? |
Well, yes. I suppose if there were more government intervention at the time, these products would have been invented at some point, but the economic growth would have been retarded.
The 1890s were an interesting time. Aside from the numerous innovations, GDP growth between 1880 and 1900 was a bit over 20%. Also, prices declined by about 10% due to a stable and sound monetary policy. The only way to inflate the currency was to either mine more silver or gold. Also, Coca-Cola came to market during this time period, and caffeine and a type of cocaine were used in the recipe. Also, Sears-Roebuck sold opium directly from its catalogs. Furthermore, the constitution prohibited tax on income and property. US citizens were much more free. So, yes, due to the relative freedom of the period, I've drawn the conclusion that these innovations were a result of such [classical] liberalism.
The connection between innovation and unmolested markets is something I should draw more closely. Free markets are a directed result of classical liberalism (liberty). If people are out putting their talents to the best use without someone saying "no" at every turn and there is no tax man to collect then entrepreneurs will be more bold and innovative. Such talents will be put to the best use because the risk factor will be taken into account; there were no gov't bailouts either. If you fail, you lose. If you win, you gain and profit. Absence of gov't distortions will ensure the best possible use of resources for a whole society.
Last edited by Pluto on Fri Jun 26, 2009 8:05 pm; edited 3 times in total |
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Pluto
Joined: 19 Dec 2006
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| Posted: Fri Jun 26, 2009 6:23 pm Post subject: |
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Rockefeller also made the oil-refining industry much more efficient. There had been vast overinvestment in the oil industry in its first decades, as everyone had wanted to get rich quick in the business. Northwestern Pennsylvania, where the first oil well had been drilled, was littered with oil derricks and refineries of all sizes, many of which were operated by men who really should have been in another line of work.
Rockefeller purchased many of these poorly managed operations and put their assets to far better use. There was never any threat that these "horizontal mergers" � the combination of two firms that are in the same business � would create a monopoly, for Standard Oil had literally hundreds of competitors, including such oil giants as Sun Oil, not to mention its many large competitors in international markets.
One of Rockefeller's harshest critics was journalist Ida Tarbell, whose brother was the treasurer of the Pure Oil Company, which could not compete with Standard Oil's low prices. She published a series of hypercritical articles in McClure's magazine in 1902 and 1903, which were turned into a book entitled The History of the Standard Oil Company, a classic of antibusiness propaganda.[25]
Tarbell's writings are emotional, often illogical, and lacking in any serious attempt at economic analysis. But even she was compelled to praise what she called the "marvelous" economy of the entire Standard Oil operation. In a passage describing one aspect of Standard Oil's vertical integration she wrote:
Not far away from the canning works, on Newtown Creek, is an oil refinery. This oil runs to the canning works, and, as the newmade cans come down by a chute from the works above, where they have just been finished, they are filled, twelve at a time, with the oil made a few miles away. The filling apparatus is admirable As the newmade cans come down the chute they are distributed, twelve in a row, along one side of a turn-table. The turn-table is revolved, and the cans come directly under twelve measures, each holding five gallons of oil � a turn of a valve, and the cans are full. The table is turned a quarter, and while twelve more cans are filled and twelve fresh ones are distributed, four men with soldering cappers put the caps on the first set�. The cans are placed at once in wooden boxes standing ready, and, after a twenty-four-hour wait for discovering leaks are nailed up and carted to a nearby door. This door opens on the river, and there at anchor by the side of the factory is a vessel chartered for South America or China � waiting to receive the cans�. It is a marvelous example of economy, not only in materials, but in time and footsteps [/i] |
http://mises.org/story/2317#3 |
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Pluto
Joined: 19 Dec 2006
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