Monopoly

“ But it is my opinion that government has done far more to prevent monopoly and special privilege in business than to favor it; and nevertheless, monopoly has grown.
In other words, the tendency toward concentration in business, the absorption of the small business by the big business, is an irresistible natural process, which neither can be nor should be hindered. ”

“ 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. ”

“ A monopoly, sometimes called a privilege, was a grant to a certain person of the sole right to sell or to manufacture a certain thing, to trade in a certain locality, or do something of a similar nature. Monopolies survive today in certain countries, though mainly as governmental monopolies; for example, in Italy the sale of matches is a governmental monopoly. No individual is allowed to sell them except as a government agent, and the traveler is not allowed to take any across the frontier, even in his pocket. ”

“ His words are, that a monopoly is 'an institution by the king, by his grant, commission, or otherwise, to any persons or corporations, of or for the sole buying, selling, making, working or using of everything, whereby any persons or corporations are sought to be restrained of any freedom or liberty they had before, or hindered in their lawful trade.' So, that it is not the case of a monopoly, if the subjects had not the common right or liberty before to do the act, or possess or enjoy the privilege or franchise granted, as a common right. ”

“ Commercial monopoly, variously called contractual, organized, or capitalistic monopoly, arises where men unite their wealth to control a market, to overpower or intimidate opposition, and to keep out or limit competition by the mere magnitude of their wealth. These various kinds so merge into each other that they cannot always be distinguished in practice. A patent may help a capitalistic monopoly in getting control of a market; great wealth may enable a company to get control of rare natural resources. ”

“ 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. ”

“ The expression, "natural monopoly," is sometimes used of those, who, under freedom, and using to the utmost their natural gifts and acquired skill, have distanced all local competitors, and may be said to control the market in their own interest, furnishing the best goods at the cheapest rates. This is in no proper sense of the term a "monopoly." Production has no complaint to make of any such pre-eminence in excellence and opportunity. It harms nobody and benefits everybody. ”

“ In prohibiting monopolies, and attempts at monopoly, Congress and the common law never intended or could have intended to prohibit necessary and useful things that in their nature had to be to some extent monopolies. ”

“ Therefore by the single fact of its logical generation monopoly is justified. Nevertheless this justification would seem of little force and would end only in a more energetic rejection of competition than ever, if monopoly could not in turn posit itself by itself and as a principle. ”

“ The great problem of monopoly would be a far easier one to solve, both theoretically and practically, were it as easy to regulate justly those forms of monopoly whose strength lies in combination only, as it is those whose power depends on the possession of gifts of Nature, which we have just considered. ”

“ To prove that a combination or monopoly exists within the meaning of the act, it is not necessary to show that the immediate effect of the acts complained of is to suppress competition or to create a complete monopoly. ”

“ We have now at last deduced the important facts, that the only remedy for the evils of monopoly must come from the popular will, expressed in direct action by the government; that the government may possibly keep competition alive by checking its intensity, or can certainly allow events to take their natural course and permit monopolies to be established. ”

“ A monopoly in any industry consists in the control of some advantage over existing or possible competitors by which greater profits can be secured than these competitors can make. For the law of monopolies we have: The degree of a monopoly depends upon the amount of advantage which is held over existing or possible competitors. When the advantage of the monopoly is so great that no other competitor will try to do business in competition [156] with it, we may rightly say that competition is dead. ”

“ In the economic order, monopoly contributes to the increase of comfort, in the first place by adding to the general wealth through the perfecting of methods, and then by CAPITALIZING,—that is, by consolidating the conquests of labor obtained by division, machinery, and competition. ”

“ These are always, in a great degree, practical monopolies; and a government which concedes such monopoly unreservedly to a private company, does much the same thing as if it allowed an individual or an association to levy any tax they chose, for their own benefit, on all the malt produced in the country, or on all the cotton imported into it. ”

“ This monopoly we have determined to be a serious infringement on the rights of the people, and we have found that the losses due to intense competition and the fruitless attempts to defeat monopoly by adding new competing units have wasted the wealth of the nation in uncounted millions. ”

“ We must first find out as fully as possible the actual facts with regard to monopolies of every sort and the competition which monopoly replaces. Next, by discussing and comparing the evidence obtained, we may be able to discover the natural laws by which competition and monopoly are controlled; and finally, with our knowledge of these, we will try to discover both the source of the evils which vex us and the proper methods for ameliorating, curing, or preventing them, whichever may be found possible. ”

“ Absolute control over price is never exercised by any monopoly. Nevertheless, we may fairly conclude, in the words of Henry D. Lloyd, that “monopoly is business at the end of its journey,” control over prices is the object of combination. ”

“ The monopoly is more or less strict, according as the terms of admission are more or less difficult, and according as the directors of the company have more or less authority, or have it more or less in their power to manage in such a manner as to confine the greater part of the trade to themselves and their particular friends. ”

“ 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. ”

“ It has been a general opinion that monopoly was a principle, unfavourable to commercial prosperity. Commerce struggled to destroy perpetuities, and monopoly to prevent alienations. In the distribution of wealth, commerce is active, unwearied and useful ”

“ Will a monopoly which can tax internal consumptions to a vast extent, be less avaricious or less oppressive, than the similar monopoly of which the article of tea was designed to be the entering wedge? ”

“ Monopoly of Control by Capital Responsible for Reactions It is this monopoly on the part of Capital in the control and direction of industry that has led to the developments that are described as socialistic, ultra-radical, and even anarchistic. ”

“ But the monopoly and restraint denounced by the act are the monopoly and restraint of interstate and international trade or commerce, while the conclusion to be assumed on this record is that the result of the transaction complained of was the creation of a monopoly in the manufacture of a necessary of life. ”

“ For the sixth law of competition we have: In any given industry the tendency toward the death of competition [154] (monopoly) varies directly with the amount of capital required for each competing unit. This law is proven in part by the preceding laws; for when a large capital is required for each competing unit, the number of competitors will be small and the tendency toward monopoly will be strong; but it may also be proven independently. Business men, before they form a combination, are certain to ask whether new competitors are likely to enter the field against the combination. ”

“ 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. ”

“ In either case would domestick commerce be rendered more beneficial to the society, by diverting these funds from this intercourse, to the accumulation of pecuniary capitals?
Monopoly is a word sufficiently indefinite, to enable ingenuity to obscure its malignity, by extending it to property acquired by industry and free exchanges; and though private property begets civilization, society, and happiness, it is made, by calling it monopoly, to supply arguments for its own invasion. ”

“ But if we examine our problem a little more closely we see that the word monopoly seems to be only a negative, expressing the fact that competition is absent. We will therefore direct our studies to competition itself, and will consider first its action as the basis of our social system. ”

“ 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. ”

“ Our very first and most obvious generalization from the facts which we have studied is, that in all the monopolies we have considered, the inherent principle is the same, and the effect on the community is of the same sort. Therefore, instead of hunting for separate remedies for railroad monopolies and trusts and labor monopolies, we will see what the general problem of monopoly is, and what is the general nature of the remedy that should be applied ”

“ But when we attempt to describe the evils and abuses which follow close after, as a result of the power which monopoly has placed in the hands of a few, we may well pause at the task. The whole array of perplexing social problems comes before us, and we realize more and more what a curse monopoly has become. ”

“ A bank, trust company, or real-estate guaranty company which has a great capital, an established reputation for safety and conservatism, sole control of many special facilities, and conveniences for obtaining and dispatching business, has a real monopoly, whose degree varies with the tendency people have to patronize it instead of some weaker competitor, if one exists. ”

“ With these facts made public, if any monopoly ventured to raise its price till it reaped unusual profits, some of the heaviest consumers of the monopolized product would be very apt to start a factory of their own in opposition. ”

“ If the merchants who effect this combination raise their prices far above what will secure them a fair profit on the capital invested in their business, and if it is difficult for their customers to reach any other source of supply outside of the combination, the monopoly will have considerable power. On the other hand, if the stores of another village are easy of access, or if the merchants who form the combination fix their prices at no exorbitant point, the effect of the monopoly may be very slight indeed. ”

“ The word monopoly is associated in the mind with the legal and artificial monopolies of the last three centuries. Such, for instance, as the Dutch East India Company, which, having the entire product of the Spice Islands, would destroy a portion of the crop rather than lower the price by bringing the whole to market. ”

“ Last, the enormous capital required for the establishment and maintenance of new competing units tends to fortify the monopoly in its position and render the escape of the public from its grasp practically impossible. ”

“ But it is said, that if the doctrine contended for be not true, then every grant to a corporation becomes, ipso facto, a monopoly or exclusive privilege. The grant of a bank, or of an insurance company, or of a manufacturing company, becomes a monopoly, and excludes all injurious competition. ”

“ Our cases determine that a party has monopoly power if it has, over 'any part of the trade or commerce among the several states', a power of controlling prices or unreasonably restricting competition. ”