Wednesday, July 05, 2006

TR's Monopolies

Time Magazine's cover is a picture of Teddy Roosevelt. Time's story is about how "Teddy" invented modern America. Tom Sowell offers a more critical look:
"Monopolies are much harder to find in the real world than in the world of political rhetoric. Monopolies raise prices but, in the big industries supposedly dominated by monopolies -- oil, steel, railroads -- prices were falling for years before Theodore Roosevelt entered the White House and started saving the country from 'monopoly.'

The average price of steel rails fell from $68 to $32 before TR became president. Standard Oil, the most hated of the 'monopolies,' had in fact innumerable competitors and its oil prices were not only lower than those of most of its competitors, but was also falling over the years. It was much the same story in other industries called 'monopolies.'

The anti-trust laws which Theodore Roosevelt so fiercely applied did not protect consumers from high prices. They protected high-cost producers from being driven out of business by lower cost producers. That has largely remained true in the many years since TR was president."

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