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Comment by erichocean | Hacker News Reader

> That's literally how every company ever in any industry since the dawn of commerce has operated.

Not even close to true, you're describing how "financial capitalism" works which is relatively modern (in the US, it begin in the early 1900s after the creation of the Federal Reserve). Until you financialize an economy, businesses can't use that kind of strategy to compete. Once you do, only those with access to finance can win.

Read up on industrial capitalism which relies on the quality of products and services—not access to finance, aka money printing—to compete in the marketplace. That's how the US was built originally, and what most Americans mean when they say they support "capitalism."

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So where does Standard Oil fall into this classification? It spent the 1880s and 1890s using its vast profits from refining oil to buy up railroads to stifle competing oil refineries by restricting access to rail transport.

That's an early example of the general approach taken by financial capitalism (essentially, the prototype for how to do it), though in the case of Standard Oil (aka Exxon), it wasn't through money printing: Standard Oil just reinvested its profits to buy up the competition (with the hopes of raising prices later).

Prior to its monopolization actions, Standard Oil was a successful industrial capitalism firm: they had better oil refinery tech than the competition which is how they came into having money to re-invest in the first place.

This is materially false. Throughout history capital has been used to stop competitors. Capital is not necessarily money in a practical sense. Regardless, money has decided these things for hundreds of years as well. Whether nation states rose or fell depended on whether they could pay mercenaries to fight for them. The largest brick castle in the world, Malbork fell when the Teutonic order was besieged and could no longer pay the castles defenders. They were then “bought out” by a Polish general. This doesn’t just apply to mercenary armies, or war, by the way. This isn’t just some product of “modern capitalism”.

> Throughout history capital has been used to stop competitors.

Your examples are nations, not businesses. Obviously the economics of warfare are different: money (and resources more generally) are how you defeat your "enemies."

I'm talking about capitalism, both industrial (Wealth of Nations-style) and modern financial capitalism which is the domain of business and markets, not war.

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