Therefore, the government has assumed the responsibility of preventing the formation of monopolies and curbing unfair practices of large corporations.Denver & Rio Grande Depot, Salt Lake City
#Which one of the four railroads in monopoly was not a real railroad? free#
America was founded on the principle of free trade and freedom of competition. Though, in many instances, the legislation fails to achieve its original goal, governmental regulation has become a standard in interstate and international commerce. The dangers of allowing one company to assume supremacy over a market have frightened the government into regulation. Most attempts at federal regulation have been mediated, modulated, or amended until they lose much of their original bite.Ĭlearly social and governmental history has shown an ever-present desire to curb the growth of corporations. Judge Stanley Sporkin rejected the June 1995 decision regarding the Microsoft monopoly, saying that the ruling was a mockery and that stricter control must be taken. Similarly, the action of the Federal Trade Commission against Microsoft is often viewed as a trifle. Most of the laws created to control railroads were simply ignored by the large corporations. It was not until the end of the 19th Century and the beginning of the 20th that regulation made the turn toward preserving competition.Īnother trend in regulation is the unfortunate tendency of legislation to have little effect. This group of legislation was essentially an attempt to appease the troubled farmers. To avoid revolt and turmoil, the state government passed the Granger Laws. There was great social unrest in this population because of the practices of large corporations. For example, the Grangers (19th Century farmers) felt that they were being oppressed by unfair practices of the railroads. The earliest regulatory measures were not as focused on competition, however. Because the corporation controls the majority of the market in nearly all of its markets, there is an overwhelming social pressure for regulation. For example, the dominance of Microsoft in recent years has raised the question of whether its practices are monopolistic.
If one company controls the market share, smaller groups will never be able to flourish. Instead, regulation exists to preserve competition and the freedom for smaller companies to enter the market. The important question that arises from regulation is: Why does the government feel that it must control big businesses? Does this not violate the principles of freedom outlined in the Constitution? Indeed, the government never tried to stifle a corporation simply because it was strong. The latter bill created the Federal Trade Commission, which is the major regulatory body of monopolies today. Later legislation, such as the Sherman and Clayton Anti-Trust Acts had more of an effect on large businesses. Though this group was not extremely effective in curbing the practices of the railroad, the precedent for federal regulation had been set. The passage of the Interstate Commerce Act in 1887 created the first interstate regulatory committee. However, the ineffectual legislation that was passed and the inability to control railroad monopolies made the need for federal regulation painfully apparent.
At first, the responsibility of control of public industries fell on the individual states.
Most regulation in its early history revolved around the railroad industry. Though examples of attempts at government regulation are widespread, three stand out from the rest: railroads of the 19th Century, Microsoft, and IBM. Though the strategies that the US has followed have varied, the aim of curbing market hegemony has been relatively constant. To combat the effects of these large corporations, the government has tried, through both legislation and court cases, to regulate monopolistic businesses. The societal and economic dangers of monopolies are clear.