Then and now
In his book The End of the Line (Doubleday, 2005), Barry Lynn discusses a several points that I have made before. First, the Jack Welch dictum that being #1 or #2 In a business has been understood for over a century. Second, the idea that oligopoly is preferable to monopoly for a company has been around as long. Third, the big difference between the mergermania of the late 19th and early 20th century and that of the last decade is that, at that time, oligopolies (and monopolies) were US bound, while today's oligopolies have worldwide ambitions.
Here's a passage from page 183 of this very persuasive and well-written book:
America had, of course, experienced such industrial gigantism before. Early in the twentieth century, U.S. Steel controlled as much as 80 percent of Americas market for the metal, International Harvester sold 85 percent of all mechanized farm machinery, Standard Oil controlled as much as 90 percent of petroleum-refining capacity, Alcoa enjoyed a 100 percent monopoly in the production of aluminum.21 It was around this time that Arthur Moxham, a top manager at DuPont, formulated a rule remarkably similar to Welch's dictum of 1981. A big company, Moxham said, should aim not at monopoly but rather at controlling only about 60 percent of the market for any product, and to maintain the ability to price "that 60 percent cheaper than others." In this way, Moxham concluded, the market leader would always, even "when slack times came," be able to "keep our capital employed to the fall.'"1
Of course, in 1903 Moxham spoke only of a 60 percent share of the U.S. market. A century later, GE and its followers would speak of 60 percent shares of the world market.
Which is a big difference.
9:06:01 PM 
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