Monopolies and the People

by Charles Whiting Baker

Little need be said to prove that a similar application of the principle of societism to our industrial system would result even more disastrously. As a general thing, the necessary formality and expense of administration when business is carried on by the government, causes the final cost of production to be much greater than under private management, even when conducted with all honesty. But the chief reason why the principle of societism is impracticable and unwise for universal application, lies in the fact that the men who administer our governments are neither the wisest nor the most honest of men. The competition among those engaged in private business tends by a process of natural selection to bring the men of greatest business ability into control of affairs. But by any form of government yet tried, popularity rather than merit, and excellence in the arts of the politician, rather than experience and capacity as a statesman and business man, are the qualities which place men in positions where they can control public affairs. Not that very many wise and good men do not now hold office, and that many unprincipled and vicious men do achieve success in private business. But, as a general rule, the statements just made hold good.

It seems plainly apparent, then, that neither the principle of individualism nor the principle of societism can be taken as an infallible guide for determining the control of our industry. It would be as manifestly unwise to take a step toward abolishing existing societism by placing our postal department under the control of a private company, as it would be to make a move toward abolishing individualism by having the government assume the management of all the farms in the country. Both of these principles are necessary.

There is, indeed, a marked tendency toward an increased reliance on the principle of societism as civilization progresses and our life becomes necessarily more intense and complex. A community of plain farmers, isolated from each other, can live their individual lives about as they please, without any interference of the government becoming necessary to protect the rights of each man from infringement by his neighbors. But the resident in a large village must submit to certain restrictions for the common good. He must not carry on any kind of business likely to become a public nuisance. His cattle may not graze in the streets. He must give part of his earnings toward maintaining a water supply for a protection against fire. The citizen of a great city is subject to far more restrictions. The government assumes the control of education, charities, the care of the public health, the drainage of the streets, the collection of offal, and a multitude of other duties which in a less intense civilization each family performs for itself.

The advance in science and the arts, too, has brought about a revolution whose effect we must recognize. A hundred years ago almost every community, and to a large degree every family, was industrially almost independent of every other, as we have already shown. To-day each man relies on a million others to supply him with the commonest necessaries of life. The armored knight was proof against all foes, save the few antagonists similarly clad. To-day my life is dependent on the fidelity and vigilance of ten thousand men, and every man I meet has me in his power. Given the malignant will and fiendish cunning necessary, and one single man can kill a thousand human beings and destroy a million dollars at a blow. To sum up, each advance in civilization makes men more dependent upon each other, and increases the advantage and necessity of having industries most important to the common welfare controlled by society as a whole instead of by individuals.

It is contended by some that from the increased interference of government with private affairs, there is danger that the liberties of the people will be curtailed, and that their rights will be so hedged about by restrictions that the result will be evil instead of beneficial. To this it must be answered that the people themselves are the source of the government's authority and power of restriction, and that in no case will a restriction of the government be long maintained which does not benefit far more in conserving the rights of men than it injures by infringing them. Apply this rule to any case of government action in industrial matters. A city government, for instance, constructs a system of sewerage. All taxpayers must contribute something towards its expense, and their right to spend that money in such other ways as they choose is abridged; but, at the same time, the more important right of having healthy and safe drainage for their houses is conserved. In a similar way, the government may pass laws of various sorts to restrict and control what seems to be at first sight purely private business, such as the sale of explosives, spirituous liquors, poisons, drugs, and many other articles. In every instance, this is done on the ground that the interference of government is necessary to protect the rights of the community as a whole, even though the liberties of certain classes are abridged.

The study of these facts brings to our attention an important principle of governmental action, which should always be remembered when in any industrial matter we find that the principle of individual action is producing unsatisfactory results, and conclude, therefore, to ask the government to take some part in its control. This principle is as follows: government, as the representative of the will of the whole people, should in general, attempt the regulation, or control, of industrial matters only to benefit the people as a whole.

Of course it cannot be said that all government action for the benefit of special classes of the community is wrong. The granting of pensions to those defenders and upholders of the government who deserve it, is a case in point where special legislation is justifiable and proper; and many other cases exist. Nevertheless, the shaping of legislation to effect the interests of special classes of the community is one which is now working the nation serious injury; and it has obtained so firm a bold that it will take a long time for us to throw it off. It causes men of all classes to consider the government as a paternal benefactor, whose duty it is to aid them, either in their schemes for getting rich or their struggles to earn a living; when its real office is to protect all citizens in their individual rights, undertake only such industrial enterprises as can manifestly be better and more economically conducted by it than by private enterprise, and enforce restrictions upon industry only as they are needed to protect personal rights or the interests of the community as a whole. Worst of all, the use of government to advance special interests places a premium on the efforts of those who seek to corrupt the expression of the popular will in its every stage, from the voters at the polls to the chief rulers in the seats of government. For by combining to accomplish their mutual purposes, they are able to turn aside all departments of government from their legitimate work and occupy them with measures to advance special interests, some commendable enough, others a mere excuse for stealing from the public treasury, but all alike claiming attention and action, while the business of the people goes all awry.

It has seemed necessary to thus briefly discuss these two opposing theories of society, individualism and societism, in order to show the impracticability of either when applied to the society of to-day without limitation and modification by the other; and that in adopting or rejecting any remedies that may be proposed for the industrial evils which we have discussed, we should be guided by the facts as we find them, and not by blind adherence to abstract principles.

Let us now gather up the salient decisions which we have reached in all our past investigation. 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. 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 are now to consider the remedies proposed for these evils.

The most obvious remedy for monopoly, and the one which has been tried and persevered in with the most remarkable faith, is the creation of new competitors. Does a railroad monopoly oppress us? Build a competing line. Is the gas company of our city charging us $3 per thousand for gas which cost but 50 cents to produce and deliver? Let us start another gas company and tear up all our pavements again to lay its mains. Has the sugar trust put up the price of sugar two cents per pound? 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 that the formation of a new monopoly is a matter of but a short time.