I removed this ‘quotation of the day’ because its author, John Kay, correctly notes that I didn’t ask for permission to quote from his book. While I believe that the very brief quotation that I posted in this space falls squarely within the fair-use doctrine, Mr. Kay seems to be upset that I quoted from his book Obliquity without his permission. So I take down the quotation, with apologies to him.
BTW, in his comment – in which he goes on to complain about my failure (in a different post) to note that Rockefeller achieved market dominance by controlling the railroads – he seems never to ask the question that was asked by some other scholars who’ve examined the history of Standard Oil: what was in it for the railroads? Rockefeller bargained with suppliers of an input (rail transportation), and he had lots of economically justified bargaining chips (such as his willingness to self-insure). He gave something to the railroads; they gave something in return.
Did this bargaining harm Standard’s rival refiners? Yes. Did it harm consumers? No. There’s no evidence that Standard’s actions resulted in higher prices or lower quality for final consumers – quite the opposite. So the fact that Standard’s business practices didn’t resemble “competition” as it is modeled in economics textbooks shows only that economic textbooks have too cramped a notion of competition.