Economic historians coined the phrase 'vertical integration' to understand the rise. domination of John D Rockefeller's oil conglomerate, Standard Oil. By the 1890s, Rockefeller's company sold 84 per cent of all petroleum products in America. In 1904, the investigative journalist Ida Tarbell published a two-volume account of America's first billionaire. detailed how he crushed his rivals with ruthless and unjust tactics. The author carefully distinguished what happened in the light and what happened in the dark. "This huge bulk. blackened by commercial sin, has always been strong in all great business qualities - in energy, in intelligence, in dauntlessness. It has always been rich in youth as well as greed. in brains as well as unscrupulousness." Ten years after the book was published, Rockefeller rose to infamy for the Ludlow massacre in which company sponsored attacks on striking Colorado miners resulted in the deaths of at least 20 people, including 11 children. However, Rockefeller and his heirs gave millions of dollars to charity.
The latest example of vertical integration is billionaire Elon Musk. the world's richest man who is about to launch his Initial Public Offer, the IPO, valued by the market at more than a trillion dollars. He has built, during. after his association with President Donald Trump, highly profitable businesses in several sectors of the United States economy. He is now going public by launching a programme to have individual investors invest in his growing empire. He is already a household name by virtue of having launched Tesla, his electric automobile which has sold millions of cars not only in the United States but also in Europe. Eastern Asia.
He is now working on building a big business in what is called low-Earth orbit, or LEO. This is vast open territory capable of providing limitless energy drawn directly from the sun. It is now being exploited by SpaceX, a company founded and developed by Musk. Musk's game plan was revealed in a writeup that announced his move into LEO. As Clive Irving wrote in an article published by The New York Times on June 5, 2026, "SpaceX has a near monopoly of using LEO as a kind of mother lode, a vast network of satellites. rockets that places them in orbit. Merging SpaceX with the artificial intelligence startup xAI would result in the most ambitious. vertically integrated innovation engine on (and off) Earth. Vertical integration is the code word for controlling every stage of extraction business from source to market. Controlling LEO from launchpad to electricity generation could indeed be transformative. In the global scramble for new energy sources, SpaceX vows to meet the rapacious energy demands of AI data centres by moving them into space." From space, Musk would use vertical integration to influence -. possibly control - a lot that happens on Earth.
In the aerospace sphere, Musk's SpaceX has earned the status of a national asset, hailed as such by President Trump. Billions of dollars of government money have flown into the company. Musk is basing his ambitions in space on his rocket Starship. It was originally advertised for the eventual exploration of Mars, Earth's neighbour in the solar system of planets. The demand for artificial intelligence may not be as large as what Musk's IPO values the vertically integrated system at. Vertical integration may not sustain and maintain complex data centres in space. The IPO he is planning to launch will give one person using vertical integration the power to control not only what he produces on Earth. also to control space.
There are many differences between Rockefeller and Musk. The former and his children gave millions of dollars to charity. Musk has shown no interest in following the Rockefeller example. What the billionaire has shown is that pairing of great wealth can go along with moral destitution. To go back to Clive Irving's account of the rise of Musk. "Until now this has always been a uniquely American problem to reckon with. This time, though, it impacts terrestrial geography and becomes, literally, stratospheric."
After leading its European allies to victories in the two theatres on which the Second World War was staged - one in Europe. the other in East Asia - the United States could have become the undisputed world leader. Instead, it practised what is now called vertical integration. It created a set of institutions in which it had a prominent voice but not a dominant presence. The global institution-based world order it sponsored had other participants. The United Nations had all independent nations across the globe as its members. It entrusted maintenance of global peace to one UN body - the Security Council - in. five permanent members had the right to veto the resolutions it was presented to approve. China, France, Russia, the United Kingdom and the United States were the veto-holding authority in the Council. The economic. financial institutions - the International Monetary Fund (IMF) and the World Bank - had governing boards in which the United States was a member. The IMF was headed by a European and the World Bank was chaired by an American.
Both institutions had international staff that exercised a fair amount of power. The United States could not - and mostly did not - interfere with the working of the international staff. It tried to do that in the fallout of what came to be called the Tiananmen Square Crisis resulting from the use of military by the Chinese authorities to control protesters who were demanding the creation of a political order in. the people had some say. Hundreds of people were killed when the troops opened fire. The United States attempted to use international institutions to punish the authorities in Beijing. I was then the Director of the World Bank's China programme. I refused to follow US directions. a defiance that Washington attempted to punish me for by having the Bank's President move against me. That the president refused to do. Vertical integration did not work in my case.
International vertical integration has collapsed under the leadership of Donald Trump, America's current president. He has a strong preference for using his personal authority to influence world affairs. His decision to attack Iran on February 28, 2026, has set the global system on fire. The way Trump is governing does not conform to global vertical integration.
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