Lucas A. Schmidt
Luna Community College
Monopolies have the potential to employ massive amounts of workers, and the potential to cause wide spread economic damage when they fail. Are these rewards worth the systemic risk to our economy, and every day life? American history is littered monopolies and large corporations that have caused, recessions, depressions, market crashes and economic uncertainty in the wake of their collapses. Monopolies also limit diversification to both consumers and to the marketplace in general, due to the nature that they would be the majority the market anyway. Monopolies also reduce competiveness and innovations in the economy. Regardless of the industry the monopoly is in, the monopoly would also expose that industry to destabilization if it were to ever fail. Government deregulation of monopolies and major corporations further compounds the negative affects of monopolies when they fail. The effects of large corporations failing has most recently been felt in the past decade, with the both the internet bubble and the current financial crisis. One of the first instances in American history where a monopoly caused a large scale economic downturn was the Panic of 1893. These economic disasters take years if not decades to recover from.
Americas Earliest Economic Crisis’s
Perhaps the earliest recorded economic crisis in America, even with the invention of railroads in the late 1800s, was the Panic of 1873 and the Panic of 1893, were two major depressions. The Panic of 1873 began after the Civil War, during President Grant’s administration. Grant’s policy of contracting the money supply was a key component to the start of the Panic. It made money scarcer while business was expanding. The Panic of 1873 also became known as the Long Depression. In 1877, wage cuts and unemployment cause workers to strike, but the tension lifted in 1879. This panic created a gilded effect because,...