Topic 6. Globalization and Entrepreneurship

Read: Frank, Alison. “The Petroleum War of 1910: Standard Oil, Austria, and the Limits of the Multinational Corporation.” The American Historical Review 114, no. 1 (2009): 16-41.

This case study reveals the history of a conflict between the Austrian government and the Standard Oil Trust between 1910 and 1912, over their position on the international oil market. It discusses the key strengths and weaknesses of the two protagonists and places them into a broader geopolitical and economic context. The case demonstrates how important the connection between diplomacy and business activity was; it also explores the differences between government support for activities of multinational corporations at home and abroad. Overall, the case demonstrates the complicated relationship between national governments and multinational corporations, struggling to preserve their autonomy in the early twentieth century. The author argues that despite free-market rhetoric, multinational businesses relied on diplomatic and regulatory support from their governments. Therefore, even during one of the most globalized periods of the history of capitalism, the significance of the national state was not diminished.

Questions for preparation:

1. How was the petroleum war in Galicia fought, and who ultimately won?
2. What did Austria-Hungary gain, and what did it lose by letting Standard Oil Trust operate within its borders?
3. Why did the oil industry become one of the most monopolized industries in the early twentieth century?
4. How would Standard Oil’s business tactics be received today?
5. Multinational companies are supposed to develop an international identity and image. However, there is evidence that corporations asked for state support in favor of both economic openness and economic nationalism. How can we interpret this attitude in the context of discussions about the “nationality” of companies?