Review Questions for Daniels's Essays on Antitrust

This set of review questions is part of the Liberty In the Books program, a monthly discussion group. These questions cover two works by Eric Daniels on antitrust that go well together for a single meeting. These essays are part of a cycle on antitrust. Previously I published questions for Alex Epstein's essay, "Vindicating Capitalism: The Real History of the Standard Oil Company." In the future Liberty In the Books will cover Dominick Armentano's book, Antitrust: The Case for Repeal.

The first work covered here is Daniels's essay, "Reversing Course: American Attitudes about Monopolies, 1607-1890." It is contained in the book The Abolition of Antitrust, edited by Gary Hull.

Daniels's second essay is "Antitrust with a Vengeance: The Obama Administration's Anti-Business Cudgel," published by The Objective Standard.

As noted previously, these review questions are intended to inspire discussion of the material, not establish a tight outline for discussion.

Reversing Course

1. What was the general change in federal economic policy from the mid 1800s to the early 1900s? (Pages 63, 65-66)

2. What was the most common understanding of "monopoly," before and after 1890? (Page 64)

3. What were the English origins of monopolies? (Page 67)

4. What was the nature of the English revolt against monopolies? (Pages 67-68)

5. What was the significance of the English Case of Monopolies and subsequent Parliamentary action? (Pages 68-69)

6. What was the colonists' view of monopolies? (Pages 69-70)

7. What was the fundamental ideological conflict that divided the English Parliament and the colonists? (Pages 70-71)

8. What was the position of state constitutions on monopolies? (Page 71)

9. According to Daniels, what is the difference between American patent law and the establishment of coercive monopolies? (Pages 71-72)

10. In what ways was the Constitutional Convention friendly toward monopolies? What were the concerns about monopolies raised in that debate? (Page 73)

11. In what ways, and on what grounds, did Congress empower monopolies? (Page 74)

12. How did Alexander Hamilton, Daniel Webster, and Joseph Story defend monopolies? How did their arguments lead from protecting coercive monopolies to breaking up large free-market businesses? (Pages 75-76)

13. How did free enterprise challenge coercive monopolies? (Page 76)

14. How did the fight over the steamship monopoly play out? What was the impact of the 1824 Supreme Court ruling in Gibbons v. Ogden? (Pages 77-78)

15. What were the arguments that continued to be made in favor of monopolies in the 1800s? (Pages 78-79)

16. What was the Charles River Bridge case, and what was the significance of the arguments made in that case? (Pages 79-83)

17. In what ways did Andrew Jackson restrict coercive monopolies? (Page 83)

18. How did judicial definitions of monopoly change after the Civil War? (Page 84)

19. What were the Slaughterhouse Cases of 1873, how were they decided, and what was the impact of the ruling? (Pages 84-85)

20. What were the circumstances of the case of Munn v. Illinois, and what was the impact of the case's legal resolution on property rights? (Pages 86-87)

21. What was the nature and impact of Henry Demarest Lloyd's works on monopoly in the 1880s? (Pages 88-89)

22. What arguments were presented in favor of the Sherman Antitrust Act? (Page 89)

23. What is Daniels's critique of the "public good" as a standard of law? (Page 90)

Antitrust with a Vengeance

24. Why did C. T. Dodd and John D. Rockefeller create a trust in the late 1800s? (Page 22)

25. What were the cultural and political conditions that led to the Sherman Antitrust Act? (Page 22)

26. In what ways are the antitrust laws nonobjective? (Page 23)

27. Why do producers need a stable legal environment, and how does antitrust legislation undercut this? (Pages 23-24)

28. How has antitrust legislation brought business under federal control? (Page 24)

29. How did antitrust enforcement change (and how did it remain the same) from the Bush to the Obama administrations? (Pages 21, 24-25)

30. How have other federal economic controls undermined free-market competition? (Page 25)

31. What is Daniels's critique of Steve Forbes and L. Gordon Crovitz, who also oppose stepped-up antitrust enforcement? (Pages 26-27)

32. What does Daniels see as the proper role of government with respect to business organization and operation? Is he right? (Page 27)

Review Questions for Epstein's Essay on Standard Oil

As I recently noted, Liberty In the Books, which I co-moderate, reviewed Alex Epstein's essay, "Vindicating Capitalism: The Real History of the Standard Oil Company."

I strongly recommend that free-market activists join a reading group in their area -- or start a new one. See my notes for some ideas about how to do that. (Alternately, if you live out in the boondocks, you can follow the Denver group's lead on your own.)

Following are my review questions that we used to guide our discussion. Remember, the point of review questions is to inspire discussion and keep it basically attached to the assigned reading. There is no need to discuss every question on the list. Page numbers here refer to the printed edition; I also include the section headers. This reading, assigned in advance of our meeting, worked great for a two-hour discussion.

1. Describe the views of John D. Rockefeller expressed by:‎
a) Henry Demarest Lloyd, 1881 (Pages 29-30)
b) Ida Tarbell, 1904 (Page 30)
c) Howard Zinn, 1980 (Page 31)
d) Paul Krugman, 1998 (Page 31)

2. What is the view of free markets expressed by Ron Chernow and John Sherman? (Pages 31-32)

The "Pure and Perfect" Early Refining Market

3. What is the theory of "pure and perfect competition?" (Pages 32-33)

4. What is Epstein's basic economic critique of the doctrine of "pure and perfect competition?" (Page 33)

5. What were the benefits of kerosene to human life? (Page 33)

6. What caused the dramatic increase in kerosene refineries from 1859 to 1864? What were some of the problems with earlier refineries? (Pages 33-35)

7. What was the trend in refineries from 1865 to 1870? (Page 35)

The Phenomenon

8. What regional advantages contributed to Cleveland's oil refineries of 1863? (Page 36)

9. What were the characteristics of Rockefeller's first refinery? (Page 36)

10. What in Rockefeller's background contributed to his success in business? (Pages 36-37)

11. In what specific ways did Rockefeller improve efficiency, expand markets, and advance technology in his industry? (Pages 37-39)

12. What is "vertical integration," how did Rockefeller practice it, and what are the benefits? (Page 38)

13. What was the state of Rockefeller's venture in 1870? (Page 40)

The Virtuous Rebates

14. What was Ida Tarbell's view of the railroad rebates granted to Rockefeller, and what is Epstein's criticism of Tarbell? (Page 41)

15. Why did railroads grant Rockefeller rebates? (Pages 41-42)

16. Were Rockefeller's practices "anticompetitive?" (Pages 42-43)

The Missing Context of Standard's Rise to Supremacy

17. From 1870 to 1880, what challenges did oil refineries face, what was the growth of Standard Oil, and what was the shift in oil prices? (Pages 43-44)

18. Why doesn't Epstein believe that cartels can succeed? (Pages 44-45)

19. What was the strategy of the South Improvement Company, and what were the results? (Pages 45-46)

20. What was the Pittsburgh Plan, and what were the results? (Pages 45-46)

From 10 to 90 in Eight Years

21. According to Epstein, what motivated Rockefeller to buy out various competitors? (Pages 46-47)

22. Did Rockefeller's treatment of some competitors to "a good sweating" constitute "predatory pricing?" (Pages 47-48)

23. What was the state of Standard Oil in 1873 and 1874? (Pages 48-49)

24. What arguments did Rockefeller make to competitors to persuade them to sell their businesses to him? (Pages 47, 49)

25. How did the Pennsylvania Railroad attempt to compete with Standard Oil, and what was the result? (Pages 49-50)

26. How did Standard Oil operate from 1870 to 1880, and what happened to the level of oil production and to kerosene prices? (Pages 50-51)

The 1880s and the Peril of the "Monopolist"

27. Did Standard Oil operate according to standard antitrust theory in the 1880s? (Page 52)

28. What was the "peak oil" theory articulated in the mid 1880s? Was was the problem with this theory? (Sound familiar?) (Page 52)

29. Why did Rockefeller expand oil production in the 1880s, what did he find, how did he cope with "skunk oil," and what did this do for Standard Oil? (Pages 52-53)

30. What new competitors did Standard Oil face in the 1880s? (Pages 53-54)

31. What was the difference between Standard Oil and government monopolies? (Pages 54-55)

The Standard Oil Trust and the Science of Corporate Productivity

32. What was a trust, and what legal problems did it overcome? (Page 56)

33. What were Standard Oil's successes as a trust? (Pages 57-58)

34. What were Rockefeller's skills as a business manager? (Pages 59-60)

35. What changing market conditions did Standard Oil face from 1899 to 1914, and what happened to the company's output and market share? (Page 60)

36. What were the journalistic and political responses to the successes of Standard Oil? What was the motivation of this reaction? (Pages 61-62)

Liberty In the Books

With Amanda Teresi I co-moderate Denver's Liberty In the Books, a monthly reading group that discusses free-market literature.

UPDATE: Please see the new home page for Liberty In the Books, which includes links to review questions.

I strongly recommend that others around the country start up their own free-market discussion groups. I believe that our nation is at a crossroads and that advocates of liberty need to step forward and articulate the case for economic freedom. One critical element of effective free-market activism is familiarity with relevant economic principles and history. Participants in a discussion group can help educate each other as well as offer support and encouragement for free-market activism. With that goal in mind, here I describe how the Denver group functions and what we're reading.

Please note that I cannot personally evaluate or endorse other reading groups that might use my recommendations or discussion notes. Thus, potential participants are strongly encouraged to independently investigate any other group claiming to use discussion notes for Liberty In the Books. Amanda owns the rights to the name, "Liberty In the Books." I own the copyright to any material I write about the group or about selected readings. Thus, whether you use the name "Liberty In the Books" is between you and Amanda. I suggest you pick a unique name for your group and perhaps say something the the effect that you follow the Liberty In the Books model, without claiming any formal ties or endorsement. Groups are free to distribute my review questions at will, so long as no claim is made that I endorse any group other than my own.

If you have an interest in starting an economic liberty reading group in your area, how should you proceed?

The first thing to do is to refine your purpose. Amanda and I decided to focus on the relationship between economic theory and history. Thus, the complete title of our group is "Liberty In the Books: Economics In Action." I do NOT want to discuss the arcane debates between the Austrian and Chicago schools. I do NOT want to discuss the finer points of Austrian praxeology versus positivism. I do NOT want to discuss libertarian anarchism versus the minimal state. (I'll discuss such things elsewhere, but not in this group.) Instead, the purpose of the group is to learn about the application of basic free-market principles to modern and historical political policies. It is a "political economy" group in the traditional sense of that term.

So far the Denver group has read the following works:
* Lin Zinser and Paul Hsieh, Moral Health Care vs. 'Universal Health Care'"
* Amity Shlaes, The Forgotten Man
* Thomas Sowell, The Housing Boom and Bust
* Henry Hazlitt, Economics In One Lesson
* Alex Epstein, "Vindicating Capitalism: The Real History of the Standard Oil Company"

Later I'll post discussion questions for works the Denver group has read. (I'll use the blog label "Liberty In the Books.")

Your group needs clear leadership. Amanda and I co-moderate the Denver group, and our decisions regarding the group are final. You might opt for a more democratic structure (though I think that may invite pointless and time-wasting debate). I choose the readings for our group in consultation with Amanda. (Obviously I'm open to suggestions from other members.) Another discussion group I'm in selects readings by informal, mutual agreement.

After you decide to start a group, you need to get members. You might want to start a very small group among friends. In that case, you can simply contact your interested friends and set up meeting times. Otherwise you can advertise for the group via existing activist networks in your area.

Another reading group I participate with, the Atlas Shrugged Reading Groups, successfully advertised for members with Facebook ads. You can also issue media releases and post your information on public calendars.

How should you handle membership? I've now participated in three Colorado discussion groups, and I've experienced no problem with troublesome members. Instead, I've really enjoyed getting to know others from the community and discussing important ideas with them. Nevertheless, I do think it's important to have membership guidelines, just in case you need to ask a disruptive participant to leave.

I endorse the Atlas guidelines: "The goal of the group is to better understand [the reading material] in a friendly and constructive way, not to engage in acrimonious debate or proselytizing."

Following are the guidelines I sent to the Liberty In the Books membership:

The purpose of Liberty in the Books: Economics in Action is to provide a fun forum for free-market advocates to discuss economic principles and history and their application to the important issues of the day, with the goal that members will be better able to publicly articulate the case for free markets.

Members should strive to regularly attend meetings and read the selections. Readings generally will run less than 100 pages per month and will cover various areas of policy as well as basic economic principles. Some readings will be available online, others through special reproduction rights acquired by the event's organizers. Occasionally members will need to purchase a book, which typically will provide readings for several meetings.

In order to keep the discussions interesting and topical, members should focus their comments on the reading material, though of course they may draw upon additional information that sheds light on the readings.

The group assumes a general support of free markets, enabling members to discuss matters of history and economics in greater detail than would be possible if members fundamentally disagreed about economic liberty. While membership is open, the moderators may, at their discretion, limit discussion that falls outside the purpose of the group.

While the group will discuss economics in history and theory, discussion should not assume any prior, specialized knowledge of history, economics, or policy, other than what is provided by the selected reading material. Discussion should remain accessible to any intelligent layperson familiar with the reading material, rather than veer into highly technical issues of interest only to a few.

While the moderators welcome feedback and advice from members, the moderators' decisions pertaining to Liberty In the Books are final. Moderators may, at their discretion, begin with a short presentation, invite outside discussion leaders, establish other parameters for discussion, ask disruptive members to leave, alter the location or time of meetings, change future reading selections, and in other ways guide the group.

Members are the guests of the club's organizers, who will strive to make Liberty In the Books consistently fun, inspiring, and informative.

Where to meet? If you are meeting with a small group of friends, where everyone knows each other well, you can meet at someone's home. However, if you plan to start a larger group with more open membership, I strongly encourage you to meet at a public location, such as a bookstore, library, or coffee shop. I've found that Borders Books is often particularly open to reading groups. The Denver group meets for two hours. Meetings of 1.5 hours also work well, and longer meetings may suit your group's needs, though you'll need to plan for a break.

To organize meetings, I suggest a Google group or a comparable method of communicating with members. (Make sure you get somebody's permission to add them to a such a group.) You need to set a reliable meeting location in advance (and check on the location close to the meeting), assign the reading material, and send out review questions and any other related notes.

How should the moderator conduct the meeting? I basically serve as the moderator for the Denver group, in collaboration with Amanda. You might want to ask for volunteers to help moderate.

The moderator has two key roles: start and end the meeting on time, and keep the discussion focussed on the reading material. The moderator must use some discretion in deciding when to cut off tangents. Obviously a major goal of the group is to apply knowledge of history and economics to modern problems, so discussion is bound to stray from the reading material at times. However, a meeting that constantly veers off track into marginal (or heated) debates or unrelated topics will tend to alienate the better members.

The moderator should strive to get everyone involved in the discussion without making anyone feel pressured to talk when the person would rather just listen.

A meeting that devolves into rancorous debate between two or three participants is a disaster.

I have found that, unless a reading group consists of friends who know each other and the reading material well, discussion questions form the basis of an effective meeting.

I write the review questions for Liberty In the Books. Diana Hsieh writes excellent review questions for the Atlas groups.

The moderator should be guided by the review questions without being bound by them. The goal is NOT to cover every single question and to spend the same amount of time per question. Rather, the moderator should use the questions to get the discussion started and keep it basically connected to the reading material. Some questions are more important than others, and some questions can be omitted from the discussion.

Moderating a good discussion group is an art. A good moderator is sort of like a good pilot; passengers usually only focus on what the moderator is doing when the flight gets bumpy. Your job is to keep the discussion going smoothly and to point out the nice views.

Participating in a local free-market discussion group can be enormously rewarding. You can deeply enrich your knowledge of economics and history. You can find motivation -- and motivate others -- to actively promote economic liberty. And you can make and maintain important friendships. If you are not already part of a reading group in your area, why not join an existing group or start one yourself?