What Is a Monopoly American History?

A monopoly is a type of market structure where a single company or group controls the entire supply of a particular good or service. In American history, monopolies have played a significant role in shaping the economy and society. In this article, we will explore the history of monopolies in America and their impact on various sectors.

The Rise of Monopolies

During the late 19th and early 20th centuries, America experienced a rapid industrialization period. Many industries such as oil, steel, and railroads were dominated by a few large companies that controlled most of the market share. These companies used their power to eliminate competition by buying out smaller firms or driving them out of business.

Standard Oil

One of the most prominent examples of a monopoly in American history is Standard Oil. Founded by John D. Rockefeller in 1870, Standard Oil controlled almost 90% of oil production and distribution in America by the early 1900s. The company used various tactics to maintain its dominance, including price fixing and predatory pricing.


Another notable example is AT&T, which held a monopoly on telecommunications for much of the 20th century. The company controlled telephone services across America and used its power to prevent competitors from entering the market.

The Impact of Monopolies

Monopolies had far-reaching effects on American society, both positive and negative.

Positive Effects

Monopolies often led to increased efficiency and lower prices due to economies of scale. For example, Standard Oil’s control over oil production allowed it to streamline operations and reduce costs, resulting in lower prices for consumers.

Negative Effects

However, monopolies also had negative effects on society. They limited competition, leading to higher prices for consumers and reduced innovation. Monopolies also wielded significant political power, often influencing government policies and regulations in their favor.

The Rise of Antitrust Laws

In response to the negative effects of monopolies, the government began enacting antitrust laws in the late 19th century. The first major law was the Sherman Antitrust Act of 1890, which prohibited trusts and monopolies that restricted trade or commerce. Other notable laws include the Clayton Antitrust Act of 1914 and the Federal Trade Commission Act of 1914.


In conclusion, monopolies have played a significant role in American history, both positively and negatively. While they led to increased efficiency and lower prices in some cases, they also limited competition and innovation. The rise of antitrust laws helped to curb their power and promote free market competition.