It appears the Facebook mega-billionaire has learned the lessons of John D. Rockefeller’s belligerent reaction to Teddy Roosevelt’s antitrust suit that ultimately dissolved Standard Oil.
Teddy Roosevelt is generally considered the first American President to take on and reign in big business in America. At the time, large corporations were organized into byzantine trusts, essentially state-by-state holding companies for dozens if not hundreds of smaller organizations, many of which engaged in behavior we would consider highly unethical if not illegal today including price fixing, paying off politicians, threatening competitors, and making secret deals with other large organizations, particularly railroads. So vast and powerful were these companies, that their names, some of their fortunes, and some of their corporate descendants live on over a hundred years later, John D. Rockefeller’s Standard Oil, Andrew Carnegie’s US Steel, J.P. Morgan’s Northern Securities Co., and others. Shortly after assuming office in September 1901, Roosevelt effectively declared war on this mode of business in his first message as President. “There is a widespread conviction in the minds of the American people that the great corporations known as trusts are in certain of their features and tendencies hurtful to the general welfare…It is based upon sincere conviction that combination and concentration should be, not prohibited, but supervised and within reasonable limits controlled; and in my judgment this conviction is right. It is no limitation upon property rights or freedom of contract to require that when men receive from government the privilege of doing business under corporate form, which frees them from individual responsibility, and enables them to call into their enterprises the capital of the public, they shall do so upon absolutely truthful representations as to the value of the property in which the capital is to be invested. Corporations engaged in interstate commerce should be regulated if they are found to exercise a license working to the public injury. It should be as much the aim of those who seek for social betterment to rid the business world of crimes of cunning as to rid the entire body politic of crimes of violence.” The Sherman Antitrust Act passed more than a decade earlier was Roosevelt’s tool of choice in this crusade, but even man courageous enough to single handedly lead desperate charges in bloody battles, was loath to unleash the full power of the federal government without first attempting to negotiate. Then, as now, actually filing a suit against a large company was complicated, time consuming, and risky. Wherever possible, his preference was to use the potential threat of an antitrust suit to pressure trusts into what he perceived as needed reforms.
To that end, he relied upon the newly constituted Bureau of Corporations to provide guidance to misbehaving companies, hoping they would cooperate and he was successful using this approach to reign in “malefactors of great wealth” across trusts such as US Steel and International Harvester. Standard Oil proved recalcitrant, however, what Rockefeller biographer Ron Chernow described as “seriously misplaying its cards.” Though Rockefeller himself was largely retired by the time Roosevelt took office and was enjoying something of a renaissance in the public’s mind after his philanthropy began reshaping public health, he generally refused to respond to any threat against his business with anything less than massive indignation. As he saw it, “other large corporations went scot free who were regarded by the ablest attorneys in the land as far more vulnerable than was Standard Oil company.” Even worse, the man he left behind to manage the company, John Archbold, was notoriously belligerent when dealing with the government and rebuffed Roosevelt at every turn, a trait shared with the rest of the Standard Oil leadership, many of whom continued to believe they were beyond the reach of the government. The new Bureau of Corporations was headed by the son of a deceased President, James R. Garfield, a Republican native of Ohio, where Rockefeller himself grew up and a man who, in principle, should have been able to guide Standard Oil to an amicable settlement. In February 1905, however, the House of Representatives passed a unanimous resolution urging an investigation of the petroleum giant, and when Garfield questioned Archbold and his counterpart, Henry Rogers, about the clandestine practice of secretly negotiating rates with railroads to secure an unfair competitive advantage, always a sore spot for the trust going back at least 20 years, the situation began devolving quickly. While Rogers continued to insist, “We will see Standard Oil in hell before we will let any set of men tell us how to run our business,” Roosevelt was increasingly convinced that Standard Oil could not be brought to heel through negotiation or coercion, and he began making the case in public. On May 2, 1906, he released a 500 page report on their misdeeds, noting “The report shows that the Standard Oil company has benefited enormously up almost to the present moment by secret rates,” forming what would ultimately become a key basis of the antitrust case. Following a Cabinet meeting that same year when the suit was being formalized, Archbold reported to Rockefeller, “There is no doubt that the Special Cabinet meeting, which the President called, and where the action was dominated entirely by him, led to the instituting of the proceedings,” and yet Standard Oil remained defiant, with Rogers telling Rockefeller himself, “It is my opinion that we are all right and will win out sure, without a doubt I do not think we have anything to fear.” A few months later, on November 18, 1906, Roosevelt finally filed the suit, demanding that the trust be dissolved, and naming Standard Oil of New Jersey, the 65 companies it controlled, and all the key players, Rockefeller himself, his son, John, Jr., Archbold, Rogers, Henry Flagler, and Oliver Payne. It took almost five years but on May 15, 1911, Standard Oil was no more when the Supreme Court ruled against them.
Earlier this week, a modern business titan, Facebook Founder and CEO, Mark Zuckerberg announced that he was dismantling the company’s fact checking apparatus, revising it’s guidelines in favor of free speech, and relying on crowdsourcing to correct errors. As he put it, last year’s election feels “like a cultural tipping point towards once again prioritizing speech.” While “Governments and legacy media have pushed to censor more and more,” “fact-checkers have just been too politically biased, and have destroyed more trust than they’ve created, especially in the US.” Therefore, he will chart a different path for his company, including getting “rid of a bunch of restrictions on topics like immigration and gender that are just out of touch with mainstream discourse.” Perhaps needless to say, progressives were less than enthused. CNN’s Brian Stelter was downright tame when he claimed, “Meta CEO Mark Zuckerberg is making sweeping changes to the social internet, all in line with the desires of President-elect Donald Trump and his supporters. Out with the fact-checkers that conservatives deride. In with more permissive rules for posting conservative opinions.” The New Republic was a bit more pointed when they referred to the change as “feckless kowtowing” and insisted, “It’s official: Mark Zuckerberg is turning Meta into yet another propaganda machine for Donald Trump and the far right. In a video statement published Tuesday, Zuckerberg announced that Meta would be enacting a series of policy changes purportedly for the purpose of fostering free speech, but his declaration devolved into an explanation of just how spineless he intends to be in the face of a second Trump administration.” Former Secretary of Labor under President Bill Clinton, Robert Reich posted on X, “Mark Zuckerberg scrapped fact-checking from Meta platforms. He’s also added Trump ally Dana White to Meta’s board and is helping fund his inauguration. Why is Zuckerberg kissing Trump’s ring? Perhaps it’s because of the FTC’s antitrust lawsuit against Meta. Follow the money.” Infamous Never-Trumper, Bill Kristol claimed, “We’re seeing this impulse to surrender across American society right now. Where the forces of authoritarianism give up or apologize, big chunks of liberal society are bargaining and capitulating without ever trying to remain independent first.” Former adviser to President Barack Obama, Dan Pfeifer saw this as part of a broader trend, posting “Zuckerberg, Bezos, and the rest of the billionaires are in a race to see who can crawl up Trump’s ass the furthest. If Trump wants to cozy up to billionaires, it’s a huge opportunity for Democrats to drive a wedge in Trump’s fragile coalition.”
Setting aside the inflammatory and hyperbolic rhetoric, they are almost certainly correct, especially when President Trump has been public in his desire for social media companies to become more first amendment friendly, even filing lawsuits to that effect. When he was asked if Mr. Zuckerberg instituted these changes as a result of his threats, he answered, probably. Given the news comes shortly after Mr. Zuckerberg donated to President Trump’s inaugural, fellow business mogul Jeff Bezos did the same, and ABC news agreed to pay $16 million to settle a defamation suit filed by the President-elect, the general mood among the chattering classes might best be described as shellshock. These are the same men and women – Mr. Zuckerberg included, who donated hundreds of millions in 2020 to get out the vote efforts designed to stop President Trump and who allowed his platform to openly suppress information favorable to him – who openly and delightedly declared war on everything Trump for the past nine years. There was nothing, and I mean nothing, they weren’t willing to do to defeat him and prevent him from returning to the White House. As they told us repeatedly, the stakes were simply too high to continue the old rules, and so they abandoned them in a quest to slay the evil orange dragon and silence his “garbage,” to use President Joe Biden’s term, supporters. They have now been soundly defeated. The dragon, like Godzilla hit be a nuclear blast, has returned more powerful than ever, and yet there’s a sense that these same people seem to believe nothing will change, that they will simply continue business as usual, as though they didn’t just lose a war they staked everything on or have forgotten the old axiom that payback’s a bitch. Mr. Zuckerberg has, wisely, realized the game has changed and unlike Rockefeller before him, has no interest in further antagonizing the most powerful person in the known universe. Ironically, Rockefeller himself had this same chance. Roosevelt only took office after President William McKinley was assassinated in September 1901. McKinley and Roosevelt were both Republicans, but McKinley was of the old guard, close to big business and not much interested in reform. There were many who believed McKinley was owned by Rockefeller, Morgan, and other tycoons after they donated heavily to his campaign, and there was even a famous political cartoon that showed McKinley sitting in Rockefeller’s giant palm while a Standard Oil refinery loomed in the background. Though Rockefeller donated a substantial sum to Roosevelt as well, Roosevelt wasn’t the sort of man who could be so easily influenced. As legendary author Bram Stoker put it years earlier “Must be President someday…A man you can’t cajole, can’t frighten, can’t buy.” Rockefeller realized this far too late, however, failing to understand that the rules of the game had changed, and saw his life’s work destroyed as a result. Mr. Zuckerberg and others appear smart enough to avoid the same mistake. While I am not advocating President-elect Trump pursue the nuclear option against Facebook or any other company like Roosevelt did before him, there is no doubt that the combination of the awesome powers of the Presidency and the voice of the bully pulpit have completely altered the political, cultural, and economic reality. Anyone who thinks otherwise is either dumb, delusional, or has no idea how the world works.
On a side note, dissolving Standard Oil only made Rockefeller even wealthier. When the stock he owned was divided into individual shares, it tripled in value and so do his wealth, rising from around $300 million to almost a billion dollars in 1911 currency.
Confessions of a Conservative Atheist 