The Sherman Antitrust Act
The history of this act and what it meant then and how is it working today
Let’s get right into this because The Sherman Antitrust Act of 1890 should be something that every American is aware of and has a basic understanding of what it is and what is was meant to do.
The Cornell Law School website gives the following definition and information about the act as follows:
The Sherman Antitrust Act of 1890 is a federal statute which prohibits activities that restrict interstate commerce and competition in the marketplace. The Sherman Act was amended by the Clayton Act in 1914. The Sherman Act is codified in 15 U.S.C. §§ 1-38.
Broad and sweeping in scope, § 1 of the Act states that “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.” § 2 of the Act prohibits monopolization or attempts at monopolizing any aspect of interstate trade or commerce and makes the act a felony.
Enforcement and Procedure
Antitrust are typically instituted by United States Attorneys in their respective districts.
Federal district courts have the jurisdiction to enjoin actions which violate the Sherman Act.
Under § 6, the Sherman Act does not apply to trade or commerce with foreign nations unless there was conduct that has a “direct, substantial, and reasonably foreseeable effect” and that effect gives rise to a claim under the Sherman Act.
Let’s also look at the Clayton Act from the the History, Art & Archives website from the U.S. House of Representatives:
On this date, the 63rd Congress (1913-1915) passed the Clayton Antitrust Act (P.L. 63–212) in a bid to curb the power of trusts and monopolies and maintain market competition. By the turn of the 20th century, large corporations had cornered whole segments of America’s economy using predatory pricing, exclusive dealings, and anti-competitive mergers to drive local businesses to ruin. In Congress, Members decried the evils of monopolies, including Representative Robert Crosser of Ohio who warned that a “failure to check the growth of monopolies…will result in industrial slavery.” Representative Alben W. Barkley of Kentucky dubbed the trusts “offensive organizations.” Most agreed that government regulation of the trusts was too lenient and rallied around the Clayton Antitrust Bill when Representative Henry Clayton of Alabama introduced it in 1914. Representative John J. Casey of Pennsylvania remarked, “I realize and appreciate the importance of this bill, because I believe it is one of the most important that has or will come before this House for consideration.” The Act supplemented and strengthened the Sherman Act of 1890, an existing antitrust bill that had failed to effectively regulate the massive corporations. The newly created Federal Trade Commission enforced the Clayton Antitrust Act and prevented unfair methods of competition. Aside from banning the practices of price discrimination and anti-competitive mergers, the new law also declared strikes, boycotts, and labor unions legal under federal law. The bill passed the House with an overwhelming majority on June 5, 1914. President Woodrow Wilson signed it into law on October 15, 1914.
So the first takeaway for me is that in 1890, Congress thought it was important enough to stop (or at least give the appearance) monopolies from dominating commercial segments thereby restricting corporations and trusts from “cornering the market.”
The first things that come to mind for me immediately are two giant contemporary corporations who do just that:
Microsoft and Apple.
You could say, well Microsoft doesn’t really control everything in the market they’re in because, well Apple exists!
I counter with this: Microsoft doesn’t need to worry about Apple’s market share in the consumer personal computer and device market as they absolutely dominate the server operating system market.
So? What does that mean?
It means that virtually every single piece of data that is “in the cloud” is hosted on a server somewhere for starters. And the majority of those servers run on the Microsoft Windows Server operating system. Worldwide.
So you see the personal computer and office suite software that Microsoft also dominates with is actually not as large or as lucrative a market as the corporate software business they have a stranglehold with.
Well here’s what MinistryTech has to say about them:
Novell developed the technology to reliably connect computers and share data on any PC running on an Intel processor. There were competitors, of course, but none of them could keep up with the engineering and strategies Novell pioneered in its networking product, NetWare. It was innovative! Then they developed a global directory service (NDS), an email system (GroupWise), and a security proxy server (BorderManager). It made networking powerful, dependable, and safe for companies of any size.
A few years after Novell changed the structure of their networks by adding the global directory service, Microsoft decided to enter the networking game. Microsoft created similar products to Novell’s, like Active Directory and Exchange. By 2000 Microsoft was pulling companies away from Novell’s solutions.
Why Does This Matter?
Novell’s NetWare was a superior product for years, but Microsoft won! What happened? There are lessons to be learned for solution providers, for IT professionals, and for churches in looking at what happened to Novell.
Lessons to Solution Providers
When Microsoft decides to compete head on, it often wins. The companies that pioneer solutions which propel the IT industry in new directions are always at risk from Microsoft— even if Microsoft’s solutions are not fully matched in quality for many years. Novell is an example, as was Lotus 1●2●3 and WordPerfect. The only way to survive competing with Microsoft is to continue to innovate, and to market at a ridiculously high level to keep people’s imaginations pointed your way.
Which begs the question: Is Bill Gates the biggest fraud that’s ever lived? Doesn’t seem like he’s innovated much other than taking what others have started and stomping them into oblivion.
The same holds true with Apple. Apple absolutely dominates the phone market with over 50% of the market share in 2021 according to Apple Insider:
Add to that tablets, wearable technology, and how people get music and yes, even streaming with Apple TV, you have another monolith controlling a massive chunk of the industry.
Which begs the question:
So How Do These Companies Avoid The Sherman Antitrust Act?
Have you ever wondered why certain products can very rarely be found discounted or marked down by suppliers?
Well that’s because with certain products you better sell at retail and nothing other than retail if you want to remain a licensed distributor.
Let’s say that Crazy Eddie was still around (His prices are INSANE!) he couldn’t sell you that new iPhone at a discount by making up for less profit with volume as Apple would crush him in a nanosecond.
In the real world what a business sells an item for versus their cost of goods should be their business and not the manufacturer’s.
Isn’t that price fixing?
Well, that’s as you would expect, a very complex question. And like many, many things Congress does and has done, isn’t always in the best interest of the American people.
Shocking, I know.
Here’s a great article by Warren Hierl on Apprend that explains this in detail:
The Sherman Antitrust Act was passed in 1890 and reflected a growing concern by the American public that the growth and expansion of monopolies were detrimental to the free market system of the United States and to its citizens in general. The act marked the first attempt by the federal government to control the growth of big business. While its goal was to control the growth of monopolies that restrained trade, the vague wording of the act and its interpretation by a very conservative judiciary made the act relatively ineffective during the first decade of its life.
Well that’s certainly not a very toothy legislation now is it?
The rapid growth of trusts and the subsequent development of monopolies during the Gilded Age led to a growing call for the regulation of big business by the federal government. While the Interstate Commerce Act of 1887 represented the first attempt by the federal government to regulate business practices, the Sherman Antitrust Act was the initial attempt at regulating trusts that, in the public mind, had grown out of control. There was a growing belief that big business controlled the federal government and encouraged such policies as a high protective tariff which resulted in higher prices for consumers and widened the gap in income distribution. There was also the belief that business control of government retarded the ability of workingmen to raise wages and ensure better working conditions as the federal government frequently intervened in labor disputes on the side of big business.
Well, well, I guess that doesn’t sound too much like what’s going on over 100+ years later thankfully as this was all “fixed”, right?
You betcha it was “fixed”.
Remember what George Carlin once said?
It's a big club. And you ain't in it.
Ruthless business tactics such as those later chronicled by Ida Tarbell in the History of Standard Oil (as one historian noted, Rockefeller broke no laws, but a lot of laws were passed because of him) eliminated small business competition and put consumers at risk of price gouging. Business mechanisms, such as vertical and horizontal integration, aided in the domination of the market by select companies and in the exploitation of labor. As well, the arrogance of certain robber barons such as those expressed by Jay Gould, “I can hire one-half of the working class to kill off the other half of the working class,” or by Cornelius Vanderbilt, “Law! What do I care about the law? Ain’t I got the power?” repulsed the American public and intensified calls for regulation. In the end, the Sherman Antitrust Act passed Congress by a vote of 51-1 in the Senate and 240-0 in the House of Representatives.
Hmm. Robber Barons. There’s another term we wrote about recently…
We continue with Hierl’s article:
The Sherman Antitrust Act made any combination “in restraint of trade or commerce among the several states, or with foreign nations” illegal. Under the provisions of the act, the federal government could bring suit against the combination and dissolve it, that is, force it to sell off some of the companies it controlled. Individuals or companies who suffered damages could sue for triple the amount of those damages.
And here’s the proverbial kicker:
While the Sherman Antitrust Act was designed to quiet public clamor against monopolies, many politicians voted for it because they knew it would be difficult to enforce.
I separated this to bring it to light because it needs to be read over and over and understood that this is how the game is played.
Here’s the formula:
A problem is created, the public complains “There oughta be a law!” and Congress rides to the rescue “fixing” the problem.
The people think their congressmen and senators fought for the little guy when in reality all that happened is the politicians pretend they’re against whatever horrible injustice of the day has people pissed off enough to complain about but all that happens in the end is the rich get richer.
They (Congress) are doing what they’re told to do by the robber barons in the guise that they’re fighting for average Americans.
This is the grift that’s been going on in this country for a long, long time.
That was borne out in the case of the United States v. E.C. Knight Company (1895). The case involved the American Sugar Refining Company, which controlled 98% of all the sugar refining in the United States. The Supreme Court ruled that manufacturing did not constitute commerce and, therefore, the company was not in violation of the antitrust statute. The practical effect of this decision was to make the Sherman Antitrust Act virtually unenforceable.
This government, always with the loopholes over here.
In many ways, the defeat in the E.C. Knight case reflected the laissez-faire attitude the government held toward the regulation of big business. Following the ruling in the Knight case, Richard Olney, the Attorney General of the United States who was charged with prosecuting the case, remarked,
“You will observe that the government has been defeated in the Supreme Court on the trust question. I always supposed it would be and have taken the responsibility of not prosecuting under a law I believed to be no good.”
Only eighteen antitrust cases were prosecuted by the government prior to 1901 (the government losing seven out of the first eight) while over 180 trusts were formed between 1899 and 1901.
And how ‘bout this for a plot twist?
The government was more successful in using the Sherman Antitrust Act against labor unions. Unions and strikes were often found to be conspiracies in restraint of trade, and courts issued injunctions against striking workers and often jailed labor leaders under the provisions of the Sherman Act. With the turn of the century, however, the progressive era ushered in a different attitude toward trusts and more vigorous enforcement of the Sherman Antitrust Act ensued.
Hierl goes on to describe how Presidents Teddy Roosevelt, William Howard Taft (who was responsible for the famous Standard Oil breakup), and Woodrow Wilson went after these monopolies:
The Wilson Administration, elected in 1912, continued and even expanded the trust busting power of the U.S. government. Prosecutions under the Sherman Act continued, but additional legislation was passed which strengthened the act. In 1914 the Clayton Antitrust Act was passed to clarify and strengthen the Sherman Antitrust Act. Among other things, the Clayton Act exempted labor unions and farm cooperatives from prosecution and limited the ability of courts to issue injunctions in labor disputes, rectifying perversions of the original intent of the Sherman Antitrust Act. Under the Wilson Administration, the Federal Trade Commission was created to regulate unfair business practices not covered under the Sherman Antitrust Act.
So we all lived happily ever after. Right?
No, we all know that didn’t happen.
So with all the gusto of those three administrations bent on breaking up monopolies at the turn of the century did happen and it seemed that our government was actually doing the right thing, something changed…
Let me stop here and credit Will Zoll who has the incredible Substack Prussia Gate which I can’t give enough credit to for further educating and opening my eyes to how this game is played.
In short, when things don’t go their way, suddenly there are wars. Sound familiar?
Well what happened after the Wilson administration?
Despite these gains, World War I largely put a halt to government attempts to control monopolies. As U.S. involvement in the war became more likely and “preparedness” became the order of the day, the government was more sympathetic to the economies of scale and the efficiencies that monopolies brought to the table. Something of a partnership between government and big business emerged, similar to the relationship that existed during the Gilded Age.
With the election of Warren G. Harding in 1920, a dominantly pro-business attitude was reinstated in the federal government. Harding’s promise of a “return to normalcy” in truth meant a return to the Gilded Age attitude of a laissez-faire approach to business regulation reinforced by a sympathetic Supreme Court. Calvin Coolidge exemplified this attitude in statements such as, “The business of America is business,” and “He who builds a factory builds a temple, and he who works there worships there…”
How about that. War. And instead of a “return to normalcy” we were fed the “new normal” as the lie of the day 100 years later.
Warren Hierl concludes:
The Sherman Antitrust Act represents the first attempt by the federal government to regulate big business. It remained the basis for antitrust prosecutions throughout the twentieth and into the twenty-first centuries (antitrust prosecution of Microsoft in 1998 was based on violations of the provisions of the Sherman Antitrust Act). Effective enforcement or non-enforcement of the act has largely been dependent on the disposition of the presidential administrations and the Supreme Court toward business regulation. The Sherman Antitrust Law reinforced and expanded the precedent set by the Interstate Commerce Act that the regulation of big business is a legitimate function of the federal government.
Who woulda guessed ol’ Microsoft would be mentioned there and that the whole thing is dependent on who is/was in office and in the Supreme Court!
Let’s look at our US Presidents from 1998 up to the present:
George W. Bush
One of these is not like the others…
Does it make sense now how large corporations have been able to skirt the Sherman Antitrust Act?
The only President on that list that wanted to change things like bring manufacturing and energy independence to the US was none other than Donald J. Trump.
Think about what’s happened with these huge corporations in the past 20-30 years, they been getting swallowed up by larger and larger companies that create a pyramid of very few big players at the top of the heap who control everything:
And most importantly, the governments that are supposed to regulate them.
Let’s hope that in due time, more and more people awaken to these facts and join the fight to defeat the globalists agenda.
This war has been underway for quite some time now…
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