Government monopoly examples8/27/2023 In its heydays at the end of the 18 th century, it took only forty hours to a letter from Paris to reach Brussels. In 1615, the position, Imperial Postmaster General was made hereditary. From that moment on to the early years of the 19 th century, his descendants, Thurn and Taxis family held its virtual monopoly on mail and postal services through a letters of grant and nobility given by Holy Roman Emperors Frederick III, Maximilian I and Charles V. In 1489, Jeannetto de Tassis was appointed Chief Master of Postal Services in Italy. Although by 1669, the VOC was the richest private company the world had ever seen, a series of mismanagements and colonial encroachments by other great powers bankrupted the VOC in 1800. To establish its monopoly for the spice trade, the entire native populations in Indonesia were deported, decimated or enslaved in the Dutch plantations that replaced them. The charter of the new company empowered it to build forts, maintain armies, and conclude treaties with Asian rulers. To counter English and Portuguese colonial expansions, the Dutch government in 1602 sponsored “United East Indies Company” that was granted a monopoly over the Asian trade. It is only natural that it also coined the standards for monopolies. Vereenigde Oost-Indische Compagnie (VOC), established in 1602, was the world’s first multinational and mega- corporation, which possessed quasi-governmental powers, including the ability to wage war, negotiate treaties, coin money, and establish colonies. Discovery of new mines in Russia, Canada, and Australia ended De Beers monopoly but De Beers is now more profitable today with a 40% market share than when it maintained an 80% market share. At its height in the middle of the 20 th century, De Beers controlled 80% of the diamond market. Whenever a new mine is discovered, it is absorbed into the De Beers cartel. Using his colonial influences, Rhodes negotiated a strategic agreement with the London-based Diamond Syndicate in 1889, which fixed diamond prices. In 1888, De Beers Consolidated Mines was formed with the sole purpose to be the owner of all diamond mining operations in South Africa. Although the salt commission began and ended with the Tang dynasty, the state monopoly on salt in China existed from sometime in 1 st century BC to the end of Imperial China in early 20 th century, making it the most enduring monopoly of all time.įor a firm that started out by renting water pumps to miners during a diamond rush, De Beers succeeded beyond the wildest dreams of its founder, Cecil Rhodes. The revenues from salt taxation of salt slowly exceeded half of tax revenues within a few years of its inception, and by 1300 AD, it was creating 80% of all tax revenues in China. The enfranchising of licensed merchants enabled the imposition of the policy even to the further reaches of the nation. Since the government controlled all major salt productions, the Tang dynasty was able to maintain th virtual monopoly on the salt trade, and benefited greatly from allocating licensed producers and licensed merchants. Salt was essential for its nutritional and preservational values. After a peasant revolution, the land tax revenues fell in China and salt commission was created in 758 (based on Guanzi, a book written in 3 rd century BC book which proposes various salt taxation methods) to intensify the taxation of salt. In Tang China, (618-907 AD), the Salt Commission is one of the most influential agencies. The real competition began only years later when Rockefeller’s heirs sold the inherited shares. still controlled all those smaller companies. In 1911, the corporate behemoth was divided into smaller companies (which included many currently famous oil companies Amoco, Texco, Exxon, Chevron) but the monopoly wasn’t broken because the old John D. That same year, the Congress passed the Sherman Antitrust Act - the source of all American anti-monopoly laws – which was used two years later against Standard Oil. In 1882, all of Standard Oil’s properties were merged into the Standard Oil Trust, and by the end of the decade (1890), it controlled 88% of the refined oil flows in the United States. Formed in 1870 mainly by John D., who had already made a substantial fortune by commodities trade during the Civil War, Stanford Oil incorporated oil producing, transporting, refining, and marketing into one single behemoth which grew both vertically and horizontally (purchase of producers and distributors). Rockefeller, presided over an oil monopoly a century before the Middle East sheiks do. They achieved something some governments dare not dream: power, influence and enduring legacy: No matter how they rose (and fell), these monopolies gained more than money. In some instances, states sponsored it, in some, the nature of the market promulgated it. Some used shrewd business decisions, some illegal practices.
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