The History of the Sherman Act

The Sherman Antitrust Act came to fruition after the government took its hands off the approach to big business in the industrial age. This laissez-faire plan of action led to huge monopolies goring into trusts that highjacked the market in the late 1800s.

When you have a competitive business, prices remain lower and there is a somewhat equal distribution of needs and services. Monopolies, however, make it so one company has a chokehold on the industry, and jacks up the prices simply because they have the power to do so.

In 1890, the Sherman Anti-Trust Act was passed which made having a trust, monopoly, or cartel that is getting in the way of fair competition, illegal. Antitrust law is the government having the ability to break up your monopoly to continue to encourage fairness in an industry.

The Act was not an immediate success, as for the first decade it was used against unions to break them up. There is another theory that the republican administration wanted high prices so corporate profits to continue flowing in.

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These huge tariffs protected us from foreign competition but still lacked looking within our own government and economy. To learn more about this history, listen to the entirety of the video!


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