Truth and liberty under the law. #dtla #history #architecture #art #america #losangeles (at The LA Times Building)
In class this week we’re talking a lot about vertical and horizontal integration, two concepts in business we’re all familiar with whether we’re aware of it or not. Vertical integration is a business that makes, markets, sells, and delivers their own goods-think of American Apparel, most oil companies, and the average start-up company that does everything itself, from start to finish. Horizontal integration is combining resources, like when you buy a 12 pack of Pepsi and there’s an offer for a free bag of chips from a company “unrelated” to Pepsi itself. Horizontal integration is also when a company buys-out or takes over another company; any company in pursuit of or holding a monopoly usually does so by buying out and taking over other, rival companies in the same industry. Contrary to popular belief, monopolies are not illegal. What is illegal is violating antitrust law, which is law that protects competition in business.
The discussion led me to do some reading on our old friend John D. Rockefeller and what made him the richest man in the world: Standard Oil. I’m sure most of you are aware Upton Sinclair wrote his short story Oil! based on Rockefeller and Standard Oil; and that Oil! was turned into the movie There Will Be Blood. Some of you might also be aware the “father” of public relations, Ivy Ledbetter Lee, was employed by and found his fortune in Standard Oil, after representing the company in the aftermath of the Ludlow Massacre. Standard Oil is one of the only companies in America to be forced by the government to dissolve, after being found in violation of antitrust laws in 1911. Standard fragmented into multiple smaller entities, most of which are still in operation today. Exxon and Mobil ring any bells to you?
In lieu of writing about this all day, I’m going to link to several interesting wiki pages for those who are interested in the concept of monopolies and multinational business. This is also a good time for me to plug John Perkins to you again (I really should be getting paid), the author of Confessions of an Economic Hitman and star of one of the amazing Speaking Freely series on Netflix. Enjoy.
Vertical Integration (linked predominately with Carnagie Steel)
Oh, and in case you ever wondered why a city as important and massive as Los Angeles doesn’t have a proper transit system, don’t forget it’s all GM’s fault.