Industrial competition

“ We have discovered that a great industrial revolution is in progress, by which manufacturing, mining, and transportation to a very great extent, and other industries to a considerable extent, have been and are being concentrated in the hands of a very few competitors. We have found that by the laws of competition this reduction in the number of competitors greatly increases the intensity of competition and the resulting waste and instability of price, and finally brings monopoly into existence. ”

“ The mere fact that two persons or groups of persons in different places are engaged in similar processes of production, that is to say, belong to the same trade, has no significance for us. The trade or aggregate of productive units of a particular sort receives industrial unity only in so far as there is competition of the units in buying the raw materials, tools, and labour for carrying on their trade, and in selling the results of their activity. ”

“ The question how industry would be located, assuming the whole surface of the globe was brought into a single market or area of competition, with an equal development of transport facilities in all its parts; or in other words, "What is the ideal disposition of industry in a world-society making its chief end the attainment of industrial wealth estimated at present values?" ”

“ Coöperation in Production.—But the greatest problems in the relations of modern industrial classes to one another are not connected with buying and selling, but with employment and wages. The competition between employer and employee is more intense than that between buyer and seller and has more influence on the constitution of society. ”

“ In the higher grades of economic society the advantages of the recent changes were more distinct, the disadvantages less so. The rise of capital and business enterprise into greater importance, and the extension of the field of competition, gave greater opportunity to employing farmers, merchants, and manufacturers, as well as to the capitalists pure and simple. ”

“ In its application a distinction must be drawn between those businesses which by means of the possession of some monopoly, patent, or other trade advantage are screened from the full force of competition, and are thus enabled to earn profits above the average, and those businesses where the constant stress of close competition keeps interest and profits down to the lowest point which suffices to induce the continued application of capital and organizing ability. ”

“ In order to realize the greatest benefit from these devices, it has become necessary to concentrate our manufacturing operations in enormous factories; to collect under one roof a thousand workmen, increase their efficiency tenfold by the use of modern machinery, and distribute the products of their labor to the markets of the civilized world. The agency which has acted to bring about this result is competition. ”

“ One is, the [pg 389] tendency of every extension of the market to improve the processes of production. A country which produces for a larger market than its own can introduce a more extended division of labor, can make greater use of machinery, and is more likely to make inventions and improvements in the processes of production. Whatever causes a greater quantity of anything to be produced in the same place tends to the general increase of the productive powers of the world.267 There is (2) another consideration, principally applicable to an early stage of industrial advancement. ”

“ The development of large scale factory production, the benefit of combination in the competitive struggle, and the tremendous advantage of concentration in securing possession of the unoccupied opportunities, were so great that vast accumulations of capital became the normal agency of the industrial world. ”

“ Mechanical invention increased the amount of capital required in business, the extension of the market intensified competition, and led to the organisation of a huge and a complicated system of exchange, factory-methods of work narrowed the skill and the outlook of the wage earners ”

“ Capital had, therefore, to be brought into manufacturing which had been previously used in trade or other employments. Capital was in reality abundant relatively to existing opportunities for investment, and the early machine spinners and weavers drew into partnership moneyed men from the towns who had previously no connection with manufacturing. Again, the new industry required bodies of laborers working regular hours under the control of their employers and in the buildings where the machines were placed and the (p. 213) power provided. ”

“ The feudal lords had to surrender their sceptre to the ascending bourgeoisie, better known today as the capitalist class. The latter, at the outset, had in view only the free development of all forces of production, in an era of unrestricted competition between individuals. When, over a century ago, the change was consummated by revolutions, the instruments of production were more equally distributed. They were in possession of a multitude of the victorious capitalists, who owned small enterprises. ”

“ Thus in all production where less and less depends on the skill of the workers, and more and more upon the character of the machinery, every change which gives more prominence to the latter tends to equalise the cost of production in different countries, and thus to facilitate effective competition. ”

“ The salient facts for us to note are, that among the manufacturers of this country there has arisen a widespread movement to partially or wholly avoid competition in the production and sale of their goods; that in a very great number of manufacturing industries these combinations have progressed so far that their managers have been able to advance prices and check production ”

“ The characteristic feature which is currently held to differentiate the existing economic situation from that out of which the present has developed, or out of which it is emerging, is the prevalence of the machine industry with the consequent larger and more highly specialised organisation of the market and of the industrial force and plant. As has been pointed out above, and as is well enough known from the current discussions of the economists, industrial life is organised on a pecuniary basis and managed from the pecuniary side. ”

“ Now, in the days when manufacturing was carried on in small workshops, there was a great number of purchasers of labor. The concentration of manufacturing in great establishments where thousands of workmen are employed has lessened the number of employers greatly; has it not also lessened competition among them? ”

“ While we believe that labor in the aggregate naturally obtains the whole of the produce of industry after the deduction of the fair shares of capital and management (which are limited by competition) and that the benefit of improvements effected by virtue of invention, engineering and organization inevitably accrue mainly to labor, there may be delay of the natural result through imperfection of competition and temporary opportunities for employers to take advantage of labor. ”

“ Other manufacturers who were aware that profits were to be made, although not so large as formerly, entered the field, built new manufactories, established machinery, and thus introduced fresh competition. ”

“ The owner of a factory, on the contrary, being commonly possessed of a large capital, and having all his workmen employed under his own immediate superintendence, may make experiments, hazard speculation, invent shorter or better modes of performing old processes, may introduce new articles, and improve and perfect old ones, thus giving the range to his taste and fancy, and, thereby alone enabling our manufacturers to stand the competition with their commercial rivals in other countries. ”

“ Of course the number of these scattered shops was so great that the possibility of uniting all the manufacturers in any one trade into a single organization to prevent competition among them, was beyond the thoughts of the most visionary.
The present century has seen three great economic wonders accomplished: the invention of labor-saving machinery, greatly multiplying the efficiency of labor in every art and trade ”

“ In industry, we must support our objective of higher industrial growth with investments in relatively labor-intensive finished consumer goods industries, the second stage of import substitution for selected intermediate and capital goods industries, and the generation of exports. ”

“ But in modern industry, when the market is world-wide, the technique most complex, and the competition most severe, when inventiveness, sagacity, courage, and decision in initiative, and skill in management, are factors so important, no such exclusive place as has been claimed can be assigned to labour. ”

“ Again, the growth of machinery makes industry more intricate. Manufacturers no longer produce for a small known market, the fluctuations of which are slight, and easily calculable. The element of speculation enters into manufacture at every pore--size of market, competitors, and price are all unknown. Machinery works at random like the blind giant it is. Every improvement in communication, and each application of labour-saving invention adds to the delicacy and difficulty of trade calculations. ”

“ There are a great many things which can be cheaply turned out in uniform batches, every article exactly the counterpart of every other, hideous in economical uniformity, because they all emanate from one or two great factories, which, if the manufacture of them were distributed over a number of small factories, would, from this circumstance alone, and from the stress of wholesome competition, be greatly improved. Probably many industries, desirable in themselves, but driven out of [51] successful being by our present system of concentrated manufacturing, would revive. ”

“ Almost all other forms of economic occupation have subsequently taken on the main characteristics of the factory system, in utilizing improved machinery, in the extensive scale on which they are administered, in the use of large capital, and in the organization of employees in large bodies. ”

“ Should he not be actuated at first by motives so remote, he will, in every highly civilized country, be compelled, by the powerful stimulus of competition, to attend to the principles of the domestic economy of manufactures. At every reduction in price of the commodity he makes, he will be driven to seek compensation in a saving of expense in some of the processes ”

“ And this third great party should be given its proper share of any gain. In fact, a glance at industrial history shows that in the end the whole people receive the greater part of the benefit coming from industrial improvements. In the past hundred years, for example, the greatest factor tending toward increasing the output, and thereby the prosperity of the civilized world, has been the introduction of machinery to replace hand labor. And without doubt the greatest gain through this change has come to the whole people—the consumer. ”

“ These are some of the steps by which the systems of the manufacturing world have been, in the past 150 years, transformed from household work, or that of the small shop, into that of the factory—and the factory developed into enormous establishments through the investment of great sums of money in the purchase and installation of ever-improving machinery, more ingenious, more productive, more costly, but turning out more and better of the finished product with each new device and new investment of capital. ”

“ The beginnings of capitalistic production with almost unlimited competition, with a variety of combinations, of joint-stock companies, sleeping partnership, etc., had been growing and getting more powerful for several generations. ”

“ To make exchange perfect there must constantly be great stores of goods in warehouses, ships, and railroad trains—goods held to supply the market, and goods on their way to market. To make labor effective, there must be many and various tools, factories, engines—all sorts of machinery. These tools and these goods in the hands of the producer are capital. ”

“ The most necessary products are often made in such a manner that they not only go through twenty or thirty hands in the same factory, but often pass from one factory to another in order to be completed. The raw material for the manufacture of these articles often comes from distant places, and railroads, mails, and telegraphs are vital to production. Now, if it happens that one wheel of this enormous mechanism of society stops, the whole of this particular industry is laid idle. ”

“ In many instances, the segments of economic endeavor embraced by these two concepts of 'industry' will be substantially coextensive, since those who employ the same types of machinery to turn out the sam general product often compete in the same market. ”

“ When shops became factories and power-driven machinery replaced the old hand processes, the question of the competency of labor was never raised, for reasons already noted, save in unusual cases, and attention was centered upon capital. With their minds still on the mechanics of production, competing employers began to unite, and the modern concentration and integration of industry commenced. ”

“ The typical industries, which set the pace for productive work, for competitive gains, and through the standard rates of gain ultimately also for competitive consumption, are industries carried on on a large scale; that is to say they are such as to require a large material equipment, a wide recourse to technological insight and proficiency, and a large draught on the material resources of the community. ”