Final answer:
The Sherman Antitrust Act of 1890 was a federal law that changed the relationship between the federal government and big business by granting the government the power to regulate and break up monopolies to ensure a free and competitive market.
Step-by-step explanation:
The Sherman Antitrust Act of 1890
The Sherman Antitrust Act, passed in 1890, was a pivotal piece of legislation that changed the relationship between the federal government and big business. This act attempted to prevent anti-competitive practices such as monopolies and trusts from distorting the free market. It gave the government the authority to break up corporations that were believed to be acting against the principles of fair competition by restricting trade or setting artificial price controls.
With industrialization intensifying, the concentration of market power in the hands of a few created an environment ripe for the development of monopolies. These monopolies often manifested in the form of trusts, whereby many previously independent firms merged under a single group of trustees. The Sherman Act directly targeted these entities, aiming to ensure a balanced and competitive marketplace.
While corporations argued that mergers and trust formations could lead to efficiencies and lower prices, the federal government was more concerned with the broader economic implications of unchecked corporate power. The ambiguous language such as "combinations in restraint of trade" was intentional to grant wide-ranging power to enforce the law. The Sherman Antitrust Act thus bestowed upon the government unprecedented regulatory powers to promote competition and curb unfair business practices.