What's What in America

by Eugene V. Brewster

PART IV.

CAUSES OF MONOPOLY.

Most people agree that the Trust is the result of an evolutionary development. If this be true, it is quite certain that the movement will continue and that the Trusts will multiply in number and in size, and thus even greater injury will be wrought than is now complained of, and the problem will become the more complex and the more pressing for solution. If the Trust is the result of a natural movement it is idle to talk of such manifestly inadequate suggestions as tariff revision, government ownership, the single tax, and publicity as Trust destroyers; for, if it is natural, the Trusts will grow and thrive in spite of these. But, should we listen for a moment to those who seek to exterminate the Trust?

OBJECTIONS TO DESTROYING THE TRUST.

1. It performs the same function in civilization as improved machinery—lightening and lessening the toil of the human family.

2. It organized the industries, eliminates useless labor, allays waste and economizes in the use of nature's materials.

3. It makes less labor necessary, and therefore tends to reduce the hours of work.

4. It makes enormously greater profits, comparatively, than individual enterprises, and therefore makes higher wages possible.

5. It reduces the cost of production to the minimum and therefore makes possible the lowest prices.

6. It is impossible to destroy the Trust without legislating against the co-operative and partnership principle, and this would be futile as well as demoralizing.

THE GREAT QUESTION.

If then we are not to destroy the Trust, and if we are not to adopt the government ownership idea, and if the Trust cannot safely be let alone because of the injuries it is now working, and because of the still greater injuries which it threatens to inflict upon society in the future, what shall be done with it? What can be done with this unmanageable monster to destroy its faults and yet not spoil its virtues? How can we conquer the giant without slaying him?

LOCALIZATION.

One more phase of the question requires consideration before proceeding with conclusions. In Gloversville, N. Y., and near vicinity, about three-quarters of the inhabitants are engaged in the glove industry, and in Troy, N. Y., the same conditions obtain as to collars and cuffs. All over the country, we find the inhabitants of certain localities devoted almost exclusively to one industry, such as pork-packing, manufacturing, fishing, and mining, and even in our cities we find certain sections devoted exclusively to banking, shipping, shopping, dry-goods, manufacture, and commission brokerage. The people of a certain town, having for generations devoted themselves exclusively to the manufacture of say, bricks, have become proficient and expert in that industry. They have invented or obtained control of the best machinery, they have trained their children from infancy to become proficient in the industry, and they have ever been alert to seize upon the best and newest ideas that always come to those who devote their lives and fortunes to the perfection of any one thing. Besides, natural advantages such as water power, accessibility to navigable streams, climatic or geological conditions, and geographical situation often attract and confine the people of a locality to one industry. Racial limitations and advantages also determine to some extent what calling a man shall follow. The thick-skulled negro would not be a success in the icy regions of Alaska, and the oily Esquimo would be a failure in the cotton fields of the South. Again, nature has adapted certain regions to the growing of cotton, or tobacco, or fruits, and in others it has deposited vast quantities of coal, or iron, or oil.

These, in brief, are some of the facts which render irresistible the conclusion that localization of industries and specialization of men is the natural and inevitable condition of the future.

Now, if every locality shall in the future have its specialty and other localities will not compete with it, as we have shown they often cannot, then locality monopolizes that specialty.

Thus the people of Gloversville will probably obtain a monopoly of the glove industry, likewise the people of Troy of the collar and cuff industry, the people of Wilkes-Barre of the coal industry, and the people of Omaha, Kansas City or Chicago, of the meat-packing industry, and the people of Haverstraw of the brick industry—not only because of their training and experience, but because of natural adaptation, or of geological or geographical advantages.

Here, then, are natural monopolies at many points, and we may as well legislate to stop the tides from rising and falling as to resist this natural economic movement. While not necessarily a Trust, it partakes of the nature of the Trust in effect, and it may properly be classed with the Trust for all present purposes.

Thus, monopoly results from two known causes: the operation of the laws of co-operation, and the operation of the laws of localization and specialization.

INTERDEPENDENCE OF MEN

Since one can no longer make his own shoes alone and must summon the aid of thousands of his fellows in this simple industry, so must he have the assistance of many more thousands of his fellows to supply him with the numerous other articles needed for his comfort. In exchange for their aid he gives his own labor in his chosen calling, and thus does he and every other man become a necessary unit in the vast universal organization. All men and all industries are interdependent. Without the steel industry, the shoe industry fails for want of nails, eyelets and machines. Without the paper industry the steel industry fails for want of paper, car-wheels, books, stationery, the mails and the telegraph. Without the silk and cotton industries the glove industry cannot thrive, and so on throughout the entire list.

SOME PARTY HISTORY IN PASSING.

Thomas Jefferson, the father of the present Democratic party, was an individualist. He was opposed to the expenditure of public money in repairing highways, to building state canals and to establishing even a national university. He was strongly opposed to the government ownership principle, and maintained that that government is best which governs least. The keynote of his philosophy was "free individual enterprise."

Alexander Hamilton represented the opposite school of political philosophy. He was for concentration, and centralization of power. At the root of the Hamiltonian theory is the belief that the people are not competent to govern themselves,—hence the idea of ruling from above. At the root of the Jeffersonian theory is the home rule principle and absolute confidence in the wisdom of the people. The Republican party today is somewhat consistent with the Hamiltonian philosophy, while the Democratic party is consistent with no one theory, and is composed of an heterogeneous collection of philosophers (?) from divers schools; but, assuming that the Democratic party is mainly Jeffersonian, it should be the last party seriously to suggest the government ownership idea. Yet, if we are to follow Jefferson's "Free individual enterprise" philosophy, we cannot consistently destroy the Trust, for that would be interfering with free individual enterprise. The word "free" was used by Jefferson in the sense of freedom from governmental interference. However, there are those who claim that the Trust destroys free individual enterprise because of special governmental favors, such as tariffs, patent and copyright laws and legislative discrimination, which contention is more or less well founded, and these persons therefore wish the government to refuse these favors, claiming that then the Trust cannot exist, and that then there will be free individual enterprise. But this appears to be an erroneous conclusion, in view of the enormous advantages and economies of co-operation, and by no manner of logical reasoning is it possible to construct a permanent remedy from such proposed action.

Briefly, there is nothing to be found in the traditions and philosophy of either the Democratic or the Republican party, nor the various socialist parties, to meet the situation.

Whether we approve of the collectivist school of philosophy, of which Karl Marx was the illustrious head, or of the individualistic school, of which Proudhon was perhaps the ablest exponent, whether we are followers of Hamilton or Jefferson, we find we must seek out a new ground or a middle ground somewhere, for the old theories will not meet the situation and solve the problem.

There is some truth and virtue in everything that is false and evil, just as there is some evil in everything that is good. We must discover and appropriate the virtues of Jefferson and Proudhon, Hamilton and Marx, and carefully discard their faults.