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The "practice" fell out of favor as you say because laws were passed which penalized monopolies and made some of their predatory behaviors very costly even existentially threatening to continue.

The Sherman Antitrust Act of 1890 made it illegal to:

• outlaws all combinations that restrain trade between states or with foreign nations.

• any agreement to fix prices

• limit industrial output

• share markets

• exclude competition

• illegal all attempts to monopolize any part of trade or commerce in the United States

• Enforceable by the Department of Justice through litigation in the federal courts

• private parties injured by violations are permitted to sue for triple the amount of damages done them.

• Selling product at a loss to put competitors out of business was outlawed.

• Coordinating between would be competitors on prices was outlawed.

• Minimum wage and safety standards also took away some of the lucrative benefits of being a monopoly and dictating such to the workforce.

• Monopolies were identified in court and then courts broke them up.

• Standard Oil

• Alcoa

As demonstrated be low businesses still operate as trusts and monopolies today, this is due to a failure to prosecute, failure to take action when prosecuted and a general change of attitudes over the harmfulness of Monopolies. The argument in favor of Monopolies makes note that when Rockefeller's standard oil was broken up into 34 companies. Rockefeller's 90% ownership in Standard Oil then became 90% ownership in 34 competing companies; and Rockefeller made a lot more money than he did previously. Thus the argument goes that predatory monopolies ultimately harm themselves and thus the market itself can take care of the excesses.

What makes them inferior vehicles for commerce is from the perspective of the greater economy. Trusts are anti competitive, produce expensive products, and ultimately stifle innovation. They stifle innovation in their sector of the economy as trusts by definition don't compete for market share but dictate to the market. They stifle innovation across the greater economy as the entire economy is forced to pay large overhead and incur greater expenses due to higher costs from the trust (higher transport costs, steel costs, software costs etc). Stated another way monopolies or trusts inhibit the entire economy by taking power out of the hands of consumers along with the incentive to compete and improve ones production for the trust.

The "practice" fell out of favor as you say because laws were passed which outlawed them and created an enforcement arm for the Federal government to find them and prosecute them.

• Sherman Antitrust Act (1890)
• Clayton Antitrust Act (1914) - Clarified and refined SAA
• Federal Trade Commission (1914) - enforcement agency

.

Sherman Antitrust Act of 1890

• outlaws all combinations that restrain trade between states or with foreign nations.
• any agreement to fix prices
• limit industrial output
• share markets
• exclude competition
• selling products at a loss
• illegal all attempts to monopolize any part of trade or commerce in the United States
• Enforceable by the Department of Justice through litigation in the federal courts
• private parties injured by violations are permitted to sue for triple the amount of damages done them.

.

What makes them inferior vehicles for commerce is from the perspective of the greater economy. Trusts are anti competitive, produce expensive products, and ultimately stifle innovation. They stifle innovation in their sector of the economy as trusts by definition don't compete for market share but dictate to the market. They stifle innovation across the greater economy as the entire economy is forced to pay large overhead and incur greater expenses due to higher costs from the trust (higher transport costs, steel costs, software costs etc). Stated another way monopolies or trusts inhibit the entire economy by taking power out of the hands of consumers along with the incentive to compete and improve ones production for the trust.

As demonstrated businesses still operate as trusts and monopolies today, this is due to a failure to prosecute, failure to take action when prosecuted and a general change of attitudes over the harmfulness of Monopolies. The argument in favor of Monopolies makes note that when Rockefeller's standard oil was broken up into 34 companies. Rockefeller's 90% ownership in Standard Oil then became 90% ownership in 34 competing companies; and Rockefeller made a lot more money than he did previously. Thus the argument goes that predatory monopolies ultimately harm themselves and thus the market itself can take care of the excesses.

Question 1
We say "anti-trust" because historically trusts were the preferred vehicles for operating monopolies. Why trusts?.... Why did trusts particularly suit the desired non-ownership function? Why not some other legal entity, e.g., corporation or partnership?

A Monopoly is a person or corporation that has total control over a segment of the economy. A trust is a type of Monopoly where a group of persons or corporations work together, rather than compete amongst themselves to exhibit the same power over a sector of the economy. While the United States has had both, Trust are more prevalent because it's easier for would be competitors to coordinate than it is for a single entity to dominate a sector of the economy.

What makes them inferior vehicles for commerce is from the perspective of the greater economy. Trusts are anti competitive, produce expensive products, and ultimately stifle innovation. They stifle innovation in their sector of the economy as trusts by definition don't compete for market share but dictate to the market. They stifle innovation across the greater economy as the entire economy is forced to pay large overhead and incur greater expenses due to higher costs from the trust (higher transport costs, steel costs, software costs etc). Stated another way monopolies or trusts inhibit the entire economy by taking power out of the hands of consumers along with the incentive to compete and improve ones production for the trust.

The "practice" fell out of favor as you say because laws were passed which penalized monopolies and made some of their predatory behaviors very costly even existentially threatening.

• Selling product at a loss to put competitors out of business was outlawed.
• Coordinating between would be competitors on prices was outlawed.
• Minimum wage and safety standards also took away some of the lucrative benefits of being a monopoly and dictating such to the workforce.
• Monopolies were classified as such in court and then coarts broke them up.
• Standard Oil
• Alcoa

As demonstrated above businesses still operate as trusts and monopolies today, this is due to a failure to prosecute, failure to take action when prosecuted and a general change of attitudes over the harmfulness of Monopolies. The argument in favor of Monopolies makes note that when Rockefeller's standard oil was broken up into 34 companies. Rockefeller's 90% ownership in Standard Oil then became 90% ownership in 34 competing companies; and Rockefeller made a lot more money than he did previously. Thus the argument goes that predatory monopolies ultimately harm themselves and thus the market itself can take care of the excesses.

The "practice" fell out of favor as you say because laws were passed which penalized monopolies and made some of their predatory behaviors very costly even existentially threatening to continue.

The Sherman Antitrust Act of 1890 made it illegal to:

• outlaws all combinations that restrain trade between states or with foreign nations.

• any agreement to fix prices

• limit industrial output

• share markets

• exclude competition

• illegal all attempts to monopolize any part of trade or commerce in the United States

• Enforceable by the Department of Justice through litigation in the federal courts

• private parties injured by violations are permitted to sue for triple the amount of damages done them.

• Selling product at a loss to put competitors out of business was outlawed.

• Coordinating between would be competitors on prices was outlawed.

• Minimum wage and safety standards also took away some of the lucrative benefits of being a monopoly and dictating such to the workforce.

• Monopolies were identified in court and then courts broke them up.

• Standard Oil

• Alcoa

As demonstrated be low businesses still operate as trusts and monopolies today, this is due to a failure to prosecute, failure to take action when prosecuted and a general change of attitudes over the harmfulness of Monopolies. The argument in favor of Monopolies makes note that when Rockefeller's standard oil was broken up into 34 companies. Rockefeller's 90% ownership in Standard Oil then became 90% ownership in 34 competing companies; and Rockefeller made a lot more money than he did previously. Thus the argument goes that predatory monopolies ultimately harm themselves and thus the market itself can take care of the excesses.

Question 1
We say "anti-trust" because historically trusts were the preferred vehicles for operating monopolies. Why trusts?.... Why did trusts particularly suit the desired non-ownership function? Why not some other legal entity, e.g., corporation or partnership?

A Monopoly is a person or corporation that has total control over a segment of the economy. A trust is a type of Monopoly where a group of persons or corporations work together, rather than compete amongst themselves to exhibit the same power over a sector of the economy. While the United States has had both, Trust are more prevalent because it's easier for would be competitors to coordinate than it is for a single entity to dominate a sector of the economy.

( A Cartel, is like a trust. It's a group which owns enough of the market to set prices. OOEC is a cartel. Cartels can have competitors and their control of the market is less than domination, but they still have the power to artificially inflate prices and thus they are still illegal in the US. )

What makes them inferior vehicles for commerce is from the perspective of the greater economy. Trusts are anti competitive, produce expensive products, and ultimately stifle innovation. They stifle innovation in their sector of the economy as trusts by definition don't compete for market share but dictate to the market. They stifle innovation across the greater economy as the entire economy is forced to pay large overhead and incur greater expenses due to higher costs from the trust (higher transport costs, steel costs, software costs etc). Stated another way monopolies or trusts inhibit the entire economy by taking power out of the hands of consumers along with the incentive to compete and improve ones production for the trust.

.

Question 2 I know part of the answer is that there were regulations (laws) on who could own what. What were the ownership prohibitions exactly?

Question 3:1
What ultimately made trusts an inferior vehicle for commercial enterprise? In other words, why don't some (non-monopolistic) firms continue to organize as trusts?

Title Question
The rise and fall of trusts as an organizational structure for commerce

Fall is the wrong word to use, Trusts and Monopolies are still with us. It's more of a constant struggle than a problem delt with in the early 1900's. This is because free markets left unregulated naturally tend to devolve into monopolies. The economy naturally creates monopolies as well as a danger of deregulation and consolidation is to create new monopolies or trusts. An upside of deregulation however is to introduce free market efficiencies on over-regulated segments of the economy, so it's a trade off.

Why does capitalism cause monopoly?.
A good example to understand how capitalism can cause monopoly power is to look at the Gilded Age 1870s-1900s in the US.

The Gilded Age was a period almost devoid of government regulation but defined by predatory monopolies.

Antitrust laws of the 1890's were successful in curbing some high profile monopolies but they didn't end the practice. There are contemporary corporations which exhibit these types of predatory behaviors.

• United States v IBM (1969-1981),
• United States v Microsoft (2001)
• Amazon Could Have a Very Real Antitrust Problem Amazon's size alone may not lead to antitrust scrutiny. But some of its business strategies could land the company in hot water sooner or later.
• Why the AT&T-Time Warner Case Was So Closely Watched
• Big Agriculture Four global giants now dominate the industry BASF, Bayer, DowDuPont, and Chem China. According to the U.S. Department of Agriculture, seed prices have tripled since the 1990s, and since the mergers, fertilizer prices up for the first time in years.
• Big Pharma
• FTC Pay for Delay
• NY AG for Patent Hopping
• Daraprim’s an anti parasite drug introduced in 1953 cost per pill increased 5000% in 2015.
• US Airline Industry
  since 2010 consolidation has left three major players in control of 85% of the market, with shrinking seats, regular overbooking, and crowded cabins are demonstrations consumers choice is not the primary motivation of the industry. More suspicious the industry has coordinated over capacity offerings, base ticket prices, change fees, and fare structures.

The "practice" fell out of favor as you say because laws were passed which penalized monopolies and made some of their predatory behaviors very costly even existentially threatening.

• Selling product at a loss to put competitors out of business was outlawed.
• Coordinating between would be competitors on prices was outlawed.
• Minimum wage and safety standards also took away some of the lucrative benefits of being a monopoly and dictating such to the workforce.
• Monopolies were classified as such in court and then coarts broke them up.
• Standard Oil
• Alcoa

As demonstrated above businesses still operate as trusts and monopolies today, this is due to a failure to prosecute, failure to take action when prosecuted and a general change of attitudes over the harmfulness of Monopolies. The argument in favor of Monopolies makes note that when Rockefeller's standard oil was broken up into 34 companies. Rockefeller's 90% ownership in Standard Oil then became 90% ownership in 34 competing companies; and Rockefeller made a lot more money than he did previously. Thus the argument goes that predatory monopolies ultimately harm themselves and thus the market itself can take care of the excesses.