Question

Why was the American Tobacco Company ethically wrong in terms of capitalist justice?

Answer 1

THE CASE

On july 24,1940 a criminal information was filed in the federal court for the Eastern District of Kentucky,charging eight major tobacco companies ,their subsidiaries and officials,with violation of 1 and 2 of the Sherman Act.The information accused defendants,in four counts ,of conspiracy in restraint of trade,conspiracy to monopolize,attempt to monopolize, and monopolization of the marketing of leaf tobacco and the production and distribution of tobacco products.

The basic allegations of the Government's case were that the major tobacco companies had engaged in a conspiracy to control and manipulate the prices,conditions and instrumentalities of the marketing of leaf tobacco and the manufacture and distribution of cigarettes and other products,eliminating competition among themselves and suppressing the competition of others,that this constituted a conspiracy in restraint of trade, a conspiracy and attempt to monopolize , and , since it succeeded , a monopolization of the industry.

In 19th century maverick cigarette entrepreneur, James B.Duke invested in the newfangled machine -made cigarette,it displaced the pricey, hand - rolled variety offered by his competitors.Duke won control of the national , and soon global,cigarette market.Schumpeter promote ideas on innovation that had been developing since the 1930s.Schumpeter's theory narrated a drama of capitalism in which the entrepreneur entered as antihero,the driver of capitalist innovation and progress.