There is a monopoly problem, involving these various factors, yet far more comprehensive than a mere aggregation of them. Public attention seems to be directed very largely to some few minor aspects of this larger problem. It concerns itself with monopoly price, the use of "unfair competitive methods," and the "power" of big business in politics. Only vaguely is it seen that the institution of monopoly is intimately associated with the stratification of society, the concentration of wealth, the distribution of income, and other aspects of social development. Very little attention is given to the institutional aspects of monopoly: its influence in the determination of the kind of a society we would like to realize; its influence upon the ethics underlying distribution; the effect it is likely to have upon the attempt of class- and group-conscious labor to incorporate their interests into the institutional system; its effect upon the distribution of opportunity, and similar questions. But all these are important aspects of the larger problem. In our partial attempt to control monopoly we have used very largely the agencies of the state. The law has given the form of monopoly organization a merry chase. Perhaps "the complete merger," now the popular style, is a permanent garb rather than a temporary disguise. In that event, our attentions may have been justified in putting the problem in terms in which it can be reached. The application of the Sherman law has doubtless given us the beginning of a "standard of reasonableness" in terms of which the conduct of large business units can be judged, despite the obvious fact that trusts have waxed fat on the invigorating tonic of dissolution. By more sharply defining "unfair competition," the Clayton bill should raise the "plane" of industrial rivalry. The promises of the Trade Commission are vague and indefinite as yet, though they bristle with possibilities. But as yet the real problem of monopoly has not been solved. What shall we do about it all? It is possible that monopoly is a mere "passing phase" of a larger industrial movement, born of competition, and with a short span of life. It may be that legislation and administration can achieve a "restored" régime of unimpeded competition, even if such a régime never existed. Or it may be that monopoly is "inevitable," and that all we can do is to regulate it before it regulates us. What we most need is a far-sighted vision and patience carefully to calculate anticipated gains and losses. That "competition is wasteful" does not make out a case for regulated monopoly. The costs of regulation must be balanced against the costs of waste. But regulation once started is likely to be carried to unforeseen and perhaps unwarranted lengths, both in the minuteness of its control and in the number of industries affected. These costs incident to this extension must find a place in our calculation. Our judgment, too, must not be too immediate. Our capacity for development may be quite differently utilized under régimes of monopoly and competition. We know, for example, that an incentive to monopoly has been a desire to escape the rigors of changing technique. Is it not, therefore, more than possible that monopolistic industries will introduce technical improvements much less rapidly than competitive industries? Is it not further possible that new technique may not succeed in getting itself invented? The question must be settled by a long-time calculation of relative gains and sacrifices. But this is not the whole, but only the economic aspect of the larger problem of monopoly. It must be subordinated to the more general question, Are the general social tendencies inherent in regulated monopoly more compatible with our realizable social ideals than those implicit in a system of competition? This is the beginning of the problem. If our decision favors a restoration of a competitive society, we are face to face with the problem of ways and means. If we decide in favor of regulated monopoly, we must determine, perhaps as we go, the extent to which monopoly shall be recognized, the means and extent of regulation, and the "good of it all." The problem awaits a progressive solution. A. IS MONOPOLY INEVITABLE? 199. The Perennial Problem of Monopoly a) An Early Corner in Grain1 And Joseph went out from the presence of Pharaoh, and went throughout all the land of Egypt. And in the seven plenteous years the earth brought forth by handfuls. And he gathered up all the food of the seven years which were in the land of Egypt, and laid up the food in the cities: the food of the field, which was round about every city, laid he up in the same. And Joseph laid up grain as the sand of the sea, very much, until he left off numbering; for it was without number. And the seven years of plenty, that was in the land of Egypt, came to an end. And the seven years of famine began to come, according as Joseph had said: and there was famine in all lands; but in all the land of Egypt there was bread. And when all the land of Egypt was famished, the people cried to Pharaoh for bread: and Pharaoh said unto all the Egyptians, Go unto Joseph: what he saith unto you, do. And the famine was over all the face of the earth: and Joseph opened all the storehouses, and sold unto the Egyptians; and the famine was sore in the land of Egypt. And all countries came unto Egypt to Joseph to buy grain, because the famine was sore in all the earth. And there was no bread in all the land; for the famine was very sore, so that the land of Egypt and the land of Canaan fainted by reason of the famine. And Joseph gathered up all the money that was found in the land of Egypt, and in the land of Canaan, for the grain which they bought; and Joseph brought the money into Pharaoh's house. And when the money was all spent in the land of Egypt, and in the land of Canaan, all the Egyptians came unto Joseph, and said, Give us bread: for why should we die in thy presence? for our money faileth. And Joseph said, Give your cattle; and I will give you for your cattle, if money fail. And they brought their cattle unto Joseph; and Joseph gave them bread in exchange for the horses, and for the flocks, and for the herds, and for the asses: and he fed them with bread in exchange for all their cattle for that year. And when the year was ended they came unto him the second year, and said unto him, We will not hide from my lord, how that our money is all spent; and the herds of cattle are my lord's; there is naught left in the sight of my lord, but our bodies. and our lands: wherefore should we die before thine eyes, both we 'From Gen. 41:46-49, 53-57; 47:13-22 (800 B.C.). and our land? buy us and our land for bread, and we and our land will be servants unto Pharaoh: and give us seed, that we may live, and not die, and that the land be not desolate. So Joseph bought all the land of Egypt for Pharaoh; for the Egyptians sold every man his field, because the famine was sore upon them: and the land became Pharaoh's. And as for the people he removed them to the cities from one end of the border of Egypt even to the other end thereof. Only the land of the priests bought he not. b) A Vindication of Philosophy2 BY ARISTOTLE It would be well also to collect the scattered stories of the ways in which individuals have succeeded in amassing a fortune; for all this is useful to persons who value the art of making money. There is the anecdote of Thales the Milesian and his financial device, which involves a principle of universal application, but is attributed to him on account of his reputation for wisdom. He was reproached for his poverty, which was supposed to show that philosophy was of no use. According to the story, he knew by his skill in the stars while it was yet winter, that there would be a great harvest of olives in the coming year; so, having a little money, he gave deposits for the use of all the olive presses in Chios and Miletus, which he hired at a low price because no one bid against him. When the harvest-time came, and many wanted them all at once and of a sudden, he let them out at any rate which he pleased, and made a quantity of money. Thus he showed the world that philosophers can easily be rich if they like, but that their ambition is of another sort. He is supposed to have given a striking proof of his wisdom, but, as I was saying, his device for getting money is of universal application, and is nothing but the creation of a monopoly. It is an art often practiced by cities when they are in want of money; they make a monopoly of provisions. c) An Early Use of Class Prices BY JOHN GOWER Wouldst thou have closer knowledge of Trick the Taverner? Thou shalt know him by his piment, his clarée, and his new ypocras, that help to fatten his purse when our city dames come tripping at 'From The Politics, I, 11: 7-10 (357 B.C.); translated by B. Jowett. 'Adapted from Mirour de l'Omme, ll. 421 ff. (1376–1379). Translation in Coulton, A Mediaeval Garner, 577–578. dawn to his tavern as readily as to minister or to market. Then doth Trick make good profit; for be sure that they will try every vintage in turn, so it be not mere vinegar. Then will Trick persuade them that they may have Vernage, Greek wine, and Malvesie if they will but wait; the better to cajole them of their money, he will tell them of divers sorts-wines of Crete, Ribole, and Roumania, of Provence, and Monterosso; so he boasteth to sell Riviera and Muscadel from his cellar, but he hath not a third part of all these; he nameth them but for fashion's sake, that he may the better entice these dames to drink. Trust me, he will draw them ten sorts of wine from one barrel, when once he can get them seated in his chairs. Better than any master of magic Trick knoweth all the arts of the wine-trade; all its subtleties and its guile. He is crafty to counterfeit Rhine wine with the French vintage; nay, even such as never grew but by Thames shore, even such will he brisk up and disguise, and baptize it for good Rhenish in the pitcher: so quantily can he dissemble, that no man is so cautious but Trick will trick him in the end. d) In the Merrie England of Queen Bess BY DAVID HUME The active reign of Elizabeth had enabled many persons to distinguish themselves in civil or military employments; and the queen, who was not able, from her revenue, to give them any rewards proportional to their services, made extreme use of an expedient employed by her predecessor. She granted her servants and courtiers patents for monopolies, and these patents they sold to others, who were thereby enabled to raise commodities to what price they pleased, and who put invincible restraints upon all commerce, industry, and emulation in the arts. It is astonishing to consider the number and importance of those commodities which were thus assigned over to patentees. Currants, salt, iron, powder, cards, calfskins, fells, pouldavies, ox shin-bones, train-oil, lists of cloth, potashes, aniseeds, vinegar, sea-coals, steel, aqua-vitæ, brushes, pots, bottles, saltpetre, lead, accidences, oil, calamine-stone, oil of blubber, glasses, paper, starch, tin, sulphur, new drapery, pilchards; transportation of iron ordnance, of beer, of leather; importation of Spanish wool, of Irish yarn. These are but a part of the commodities which had been appropriated by monopolists. When this list was read in the House, a member cried, "Is not bread in the number?" "Bread!" said everyone, with astonishment. "Yes, I assure you," 'Adapted from The History of England, IV, chap. xliv (1759). replied he, "if affairs go on at this rate, we shall have bread reduced to a monopoly before next Parliament." These monopolists were so exorbitant in their demands that in some places they raised the price of salt from sixteen pence a bushel to fourteen or fifteen shillings. Such high profits naturally begat intruders upon their commerce; and, in order to secure themselves against encroachments, the patentees were armed with high and arbitrary powers from the council, by which they were enabled to exact money from such as they thought proper to accuse of interfering with their patent. 200. The Perennial Protest against Monopoly a) A Proverb about Corners The liberal soul shall be made fat; And he that watereth shall be watered also himself. He that withholdeth grain, the people shall curse him; b) The Ethics of Monopoly BY MARTIN LUTHER There are some who buy up altogether the goods or wares of a certain kind in a city or country, so that they alone have such goods in their power, and then fix prices, raise and sell as dear as they will or can. The rule is false and unchristian that anyone sell his goods as dear as he will or can; more abominable still is it that anyone should buy up the goods with this intent. Which same, moreover, imperial and common law forbids and calls monopoly; that is, selfish purchases which are not to be suffered in the land and the city, and princes and rulers should check and punish it if they wish to fulfil their duty. For such merchants act just as if the creatures and goods of God were created and given for them alone, and as though they might take them from others and dispose of them at their fancy. c) The Pests of Monopoly BY SIR JOHN CULPEPPER These, like the frogs of Egypt, have gotten possession of our dwellings, and we have scarcely a room free from them. They sip in our cup; they dip in our dish; they sit by our fire; we find them 'Prov. 11:25-26 (350 B.C.). "Adapted from the address on “Trade and Usury," printed in the Open Court, XI, 27; translated by W. H. Carruth (1524). 'Quoted in Hirst, Monopolies, Trusts, and Kartells, 20. |