Monopolist

“ That even wider circumstances of the most absolute monopoly, the monopolist will, if he knows his own interest and pursues it, sell the article he produces at exactly the same price as the freest competition would produce. ”

“ This deprives industry of its power to acquire, to a great extent. Of the same nature is the protecting-duty monopoly. A monopoly of land, enables the monopolist to extract wealth from the produce of land; and a monopoly of mechanicks, enables the monopolist to extract wealth from the produce of mechanicks. The monopolist in both cases is able to enhance the price of land or its produce, or the produce of his mechanicks, at the expense of buyers. Land was monopolized by the feudal system, incidentally to monopolize labour; by the factory system, the labour itself is directly monopolized. ”

“ Now it does not mean because a monopolist holds temporary control of a commodity that he will raise the price of that commodity. He will surely seek to lower its value by closing down unnecessary factories and installing improved machinery that will lessen the labor contained in his product. Many "monopoly" owned commodities sell at a lower price than they did before they were monopoly produced. ”

“ Because the ultimate issue is the effective power to control price and competition, this Court has always recognized that the market must include products or services 'reasonably interchangeable' with those of the alleged monopolist. ”

“ The point is not affected by the fact that the distributors willing to accept respondent's conditions were buying monopolies. The principal virtue of a monopoly is the power of the monopolist to charge super-competitive prices. ”

“ The investigation which we pursued in the first chapters showed very clearly that monopolists are simply striving, like all other men, to protect and advance their own interests by what they consider legal and honorable means. And our study of the laws of competition has shown us that the evils of monopoly and unhealthy competition are the natural outgrowth of the great revolution in modern industries by which the number of competing units has been reduced from many to few. ”

“ That they may decide this question the issue that depends on it must be brought before them; and all that falls within the sphere of the economist is the stating of the effects of monopoly, the causes of its existence, and the public action that if taken will remove these causes. The preservation of a normal system of industry and a normal division of its products requires the suppression of all those practices of great corporations on which their monopolistic power depends. ”

“ Each is the means at present most available for discharging its respective kind of function. With reference to the corporation our problem is, how may we secure just that function without defect or excess, and without disturbance of the other functions of society? We have to learn how to secure for the public the advantages of monopoly, administered in the anti-monopolistic spirit. ”

“ Would you say, then, that in the case of an organisation that controls perhaps eighty per cent. of the markets of the country, there is a monopolistic element that enters in which enables them to hold prices above the regular rate? Is there a monopolistic power that comes merely from the power of capital itself?
A. Undoubtedly, there is an ability, and when that ability, as I have said, is unwisely used, it is sure to bring its own defeat. ”

“ The effects of monopoly. All these forms of monopoly interfere with free competition and they cover a great many of the things which are 55in common use by the people. [15] Recent investigations have shown that the number of commodities which are either wholly or in large part controlled by monopolistic combines is larger than people commonly realize. A certain amount of legal monopoly is essential in order to encourage research and invention. ”

“ A monopoly granted either to an individual or to a trading company, has the same effect as a secret in trade or manufactures. The monopolists, by keeping the market constantly understocked by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emo [Pg 26] luments, whether they consist in wages or profit, greatly above their natural rate.
The price of monopoly is upon every occasion the highest which can be got. ”

“ It is a very common belief that monopolies are confined to the capitalized industries of production, transportation, and trade, which we have already considered; but we are now confronted by the fact that the wage-workers in the various trades of the country are engaged in exactly the same monopolistic schemes, in which they have exactly the same ends in view as have the monopolists who combine millions of dollars' worth of capital to effect their purposes. ”

“ The whole raison d'être of monopolistic combinations is to control prices, and prevent active competition. As every economist knows, in the conditions under which many industries are to-day organized, expenses of production have no direct relation to prices. ”

“ By the action of railroad corporations; the special legislation in favor of certain interests; the monopolies given to manufacturers, and the action of the Wall street brokers, the wealth of the country has become centralized, and is controlled by and in the interests of the monopolists, who, because of their combinations, also control the value of labor throughout the country. The influence of the laboring classes is made to subserve the purposes of monopolists. ”

“ Recent legislation against trusts, monopolistic corporations, and railway consolidations is the modern expression of a sentiment which finds its roots far back in English history. Modern monopolies bear little resemblance to those which existed prior to the middle of this century; yet the opposition to the latter, taking shape in constitutions and statutes, has largely influenced public opinion against modern capitalistic combinations. Modern monopolies are the outgrowth of industrial and economic conditions. ”

“ Unfortunately there is a great tendency to make these evils worse by recrimination. It is very common to hear those engaged in monopolistic enterprises, whether as owners or managers, denounced as unscrupulous villains, double-dyed rascals, scoundrelly enemies of the people, or perhaps in terms less blunt but more scathing. Now, what are the facts of the case? Speaking broadly, it is a fact that the men who own and manage our modern monopolies are as a class far more large-hearted in their sympathies than the average of men. ”

“ We have, indeed, pointed out for each monopoly described some of the especial abuses to which it gives rise; and it is plain enough that the general tendency is, first, to greatly enrich the possessors of the strongest monopolies at the expense of all other men; second, to give a certain degree of advantage to the possessors of minor monopolies,—as, for instance, monopolies in articles which are luxuries, and can easily be dispensed with; and third, to seriously injure all those engaged in occupations in which the price of the product is still fixed by competition. ”

“ We have proven in the preceding chapters that, from the character of modern concentrated industry, a very large number of our manufactures must either exist as monopolies or else must engage in intense and wasteful competition. If the monopoly can be so managed that it shall carry on the industry economically, adopt improvements, keep up the character of its product, and keep the prices therefor so low as to make no more than ordinary profits, it would be for the public advantage that monopolies rather than competition should exist. ”

“ Can we expect a perfect return to the old system of free competition? When men have once reaped the enormous returns that are yielded by the control of a monopoly, the ordinary profits of business seem tame and dull. There will surely be attempts to form the monopoly anew on a stronger and more permanent basis; and even if these attempts do succeed in producing only short-lived monopolies, the effect will be to keep the whole trade and all dependent upon it in a state of disquiet and uncertainty. ”

“ Let us now, however, leave out this indirect benefit which may, or may not, accrue to the workmen in these various occupations, and find as nearly as we can the number which are, or can possibly be, directly benefited by the operation of monopolies. Let us deduct from the total of 5,647,368, such classes of persons as it is evident cannot have a direct share in the results of a monopoly and are not engaged as skilled workmen in a trade which has been organized to control competition. ”

“ If a single corporation, by its extreme efficiency, or from unusual conditions, should constitute a monopoly so that there was practically no competition, then it would be necessary, he thought, for the Government to fix a price reasonable to all interests involved. ”

“ Our interests are at bottom common; in the long run we go up or go down together. Yet more and more it is evident that the state, and if necessary the nation, has got to possess the right of supervision and control as regards the great corporations which are its creatures; particularly as regards the great business combinations which derive a portion of their importance from the existence of some monopolistic tendency. The right should be exercised with caution and self restraint; but it should exist, so that it may be invoked if the need arises. ”

“ Of course the great proportion of the persons included in the above number have no direct interest in the profits of the industries in whose operation they aid. It is, indeed, argued that the manufacturer, miner, or merchant who is making enormous profits, pays, therefore, larger and more generous wages; but it is urged on the other side that while this is true in isolated cases, the general rule holds good that the price of labor is governed by the law of supply and demand; and that, as already pointed out, monopoly among producers means a monopoly among purchasers of labor. ”

“ Well, "sugar can be produced anywhere by the expenditure of labor and capital," the Trust's lawyers say, and so we will "trust" that some enterprising manufacturer will take the field against the combination. But if we do any of these things, we have added only one competitor to the number in the field. And with only two competitors in the field, competition is sure to be so intense and wasteful [205] that the formation of a new monopoly is a matter of but a short time. ”

“ The salient fact which is evident to any one at all conversant with business affairs is, that in almost every line of trade the restriction of competition is in force to a greater or less extent. Those monopolies are strongest, indeed, which have control of production; but in so far as they can control the market, the men engaged in buying and selling are equally ready to create minor monopolies, and an acquaintance with the general markets convinces one that these monopolies are numerous enough to have a very important effect in increasing the cost of goods to the consumer. ”

“ Grant it to be true that a certain monopoly makes the greatest net profit when its rates or prices are at a certain point; then will it not be apt to set them slightly above that point, where they will give nearly the same profit with a considerable decrease in the volume of business transacted and in the corresponding labor and responsibility? And, again, the point where it makes the greatest net profit is considerably above the point where it is of the greatest possible benefit to the community at large. ”

“ A slave of the economic thought of Adam Smith, David Ricardo and John Stuart Mill, or our own Nani Palkhivala, JRD Tata and M.R. Pai, I have been a votary of free enterprise and competition — and allergic to monopolies. A monopoly is bad for any consumer. ”

“ Among innumerable kinds of monopolies none have been more troublesome than trade monopolies, especially those which control the price of the necessaries of life; for, so far as I know, no people, approximately free, have long endured such monopolies patiently. ”

“ But in dealing with the question of monopolies we must not conclude that [72] the absolute control of supply is at all necessary to the existence of a monopoly. While there are monopolies, as we have seen, which have the keys to some of the necessities of civilized life, there are others which control merely some easier means for their production, carriage, or distribution; and to this latter class belong the principal monopolies in trade. ”

“ There are, then, but two ways of preventing monopoly from establishing itself and laying such a tax upon the people at large for the supply of the commodity which it controls as it chooses. The first is, action to reduce the intensity of competition so that the weaker competitors may maintain their independence and not be forced to consolidate with their stronger rivals. The second is, action to permit or encourage the establishment of monopoly, and regulate by some means other than competition the prices which it shall charge for the products and the quality of product which it shall supply. ”

“ This public control is strengthened and extended in proportion as the highly evolved structure of the industry enables its administrators to exercise powers of monopoly either in relation to the treatment of its employees, or in relation to the price or quality of the commodities it supplies to the public. Such industries as develop these economic powers of monopoly in the highest degree, and in relation to the supply of prime necessaries or comforts of common life, pass gradually into the condition of public industries organised for the public good. ”

“ The abolition of this monopoly would fill its beneficiaries with a wholesome fear of competition which would cause them to be satisfied with pay for their services equal to that which other laborers get for theirs, and to secure it by placing their products and works on the market at the outset at prices so low that their lines of business would be no more tempting to competitors than any other lines. ”