A great part of the clamor against trusts is the honest expression of a belief (promoted by many writers on political economy) that in commercial matters the only influence concerned in reduction of price is competition. Nearly all workingmen are more or less discontented with the “competitive system” in industrial affairs, but few have learned to challenge its benignity in trade. Competition is, in fact, only one of the several forces concerned in cheapening commodities and, generally speaking, not by any means the most considerable. It requires only a brief experience in producing and selling to convince an intelligent man that his prosperity is to be found in the large sales of his product that come of low prices. Having control of his market and a free hand in the management of his business such a man studies to reduce his selling price to the lowest possible point. An enlightened selfishness moves him to undersell himself whenever he can, as if he were his own competitor.
Not all men managing large commercial affairs are intelligent. Some of the trusts are organized and conducted with a view to enhancing rather than reducing prices; but these are bound to fail. By tempting the small concerns to remain in or re-enter the field, the trust cuts its own throat. Its primary purpose is to “crush out” the independent “small dealer,” and this it can do in only one way—lure away his customers by underselling him. If consumers really think that is so wicked a thing to do they have the remedy in their own hands. Let them refuse to leave the small dealer, and continue to pay him the higher price. This course would entail a bit of sacrifice, maybe, but it would have the merit of freedom from cant and hypocrisy. I know of nothing more ludicrous than the spectacle of these solemn consumers appealing to the law and public opinion to avenge upon the trusts the injuries of themselves and the small dealer—they having no injuries to avenge and the small dealer only such as themselves have inflicted by assisting the trusts to pluck him. The trust is condemned when it puts up prices, for that harms the consumer; it is condemned when it puts them down, for that harms the small dealer. In either case, both consumer and small dealer make common cause against the enemy that can harm neither without helping the other. If the history of human folly shows anything more absurd surely the historian must have been Rabelais, “laughing sardonically in his easy chair.”
The trusts, it is feared, will become too rich and powerful to be controlled. I do not think so. The reason that some of them already defy the power of the states is that, being so few, they have not until now attracted the serious attention of legislatures. And even now our anti-trust legislation is more concerned with the impossible task of abolition and prevention than with the practicable one of regulation. When we have learned by blundering what we can not do we shall easily enough learn what we can do, and find it quite sufficient. Governmental ownership and governmental control are what we are coming to by leaps and bounds; and with the industries and trade of the country in fewer hands the task of regulating them will be greatly simplified, for it is easier to manage one defendant in a single jurisdiction than many in a hundred.
But, it will be asked, is this to become a nation of employees working for a few hundreds of taskmasters? Not at all. The spirited and provident employee can become his own employer and the employer of others by investing his savings in the stock of a trust. The greater its gains, the greater will be his share of them. The “crushed out” small dealer, too, can recoup himself by becoming a part of what crushed him out. Naturally the tendency of the trusts will be to “work the stock market,” to “put up jobs” on the small investors, and so forth. Prevention of that sort of thing is a legitimate purpose for legislation, and promises better results than “drastic” measures to destroy the trusts themselves. To do the latter the laws would have to be drawn so as to forbid any commercial enterprise requiring more capital than its manager could himself supply. That would be a strange law which should undertake to fix the amount of capital to be combined under one management, or limit the number of persons permitted to supply it; yet nothing less “drastic” will “down the trusts.” And that would not, for it would be unconstitutional in every state of the Union. As a contribution to the literature of humor it would be slightly better than an apothegm by Josh Billings, but distinctly inferior to that Northwestern statute making it a felony to conduct a “department store”—every country store being of that felonious character.
It is not, perhaps, too late to explain that in these remarks the word “trust” is used in the popular sense, meaning a large aggregation of capital by combination of several concerns under one management. It is my high privilege to know a better word for it, but in deference to those who do most of the talking on this engaging theme I assent to their kind of English.
1899.
POVERTY, CRIME AND VICE
I
ANDREW CARNEGIE once said in an address to a young men’s Bible class: