What were the results of mergers of corporations around the time of US industrialization?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The main result of all of these mergers and takeovers was, of course, the fact that many American companies came to enjoy monopoly or near-monopoly power over their particular markets.  This had a number of negative effects.

Not all of the effects of mergers and consolidation were negative, however.  The main way in which the mergers happened was through competition.  Industrialists like Carnegie and Rockefeller made sure that their firms were operating as efficiently as possible, trying hard to strip out any waste.  What this meant is that prices dropped for consumers as efficiency rose.  Economies of scale, too, helped to allow the big companies to lower their prices.

There were also negative consequences of this consolidation.  For one thing, the companies that got monopolies could potentially use those monopolies to abuse their customers.  Farmers felt that railroads were abusing them by charging excessively high prices for freight transport.  The large companies also had tremendous political power.  They could use their riches to have a great deal of influence on the government.  They sometimes did this in very unscrupulous and corrupt ways.

Mergers, then, had some good impacts and some bad impacts on the United States in this time period.

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