Trusts.—Of late years the advance of combination in so-called trusts has been enormous. The underlying principles of economy already illustrated furnish the occasion for such combinations, but the immediate advantage to promoters of such enterprises, because of the supposed power in control of the market, is found in the speculative interest in stocks. In this respect the multiplication of trusts will furnish the principal weapon against them. Yet the dangers to the industry of the country, as well as to the safety of exchanges, from such rapid consolidation of management are easily perceived. It is certainly necessary that responsibility for such enterprises be definitely fixed upon the share-holders. And it is more than probable that government inspection of such business may become as necessary as it now is of the banking systems of our country. Some students of the subject foresee a final assumption of absolute control by the government of all industrial enterprises as a result of this tendency to aggregation. The question cannot be discussed in this connection, since it involves a wider range of welfare than can be considered under production.
Possible combinations for farming.—It is proper to close this chapter with suggestions as to the possibility of gaining the advantages of combination for farming communities without disturbing the present condition of ownership of land. When our farmers generally shall have outgrown the disposition to make money by emigration, so that each farming community is made up of farm homes with a stable population, more intimate associations for farm operations than now are possible ought to become [pg 205] the rule. Suggestions have already been made as to the possibilities of greater division of labor, but other advantages of combination in the way of labor saving can certainly be secured. More definite business methods and mutual confidence in a neighborhood of farmers make possible enormous economies in the way of mutual protection and advantage. The removal of fences, with possible combination in seeding and tillage, a universal method of dealing with insects, blights, rusts and similar plant diseases, the handling of products in company, and above all a perfect sympathy in all methods of improvement, education and development of enterprise, will accomplish wonders.
Chapter XV. Special Incentives To Production.
Good government chief.—The productive energy of any country is encouraged chiefly by what we call good government. This means especially security of property rights by prevention of frauds and robbery of every kind, and free interchange of ideas, as well as of products of industry, and general public intelligence. It is not enough that individuals throughout a community be fairly intelligent, but they must have sufficiently mutual ground of intelligence in common purposes and common interests in everyday work to bring without effort a perfectly mutual confidence. Where these essentials are absent no devices can operate extensively for the encouragement of energy in production. Where they are present it is always possible to add extra incentives, to give direction at least to the energies of the people, and perhaps to increase those energies. Some of these incentives are too important to be overlooked.
Premiums.—The most simple means of encouraging enterprise is found in premiums of various kinds offered by individuals, local societies or municipal authority. These operate by adding to the natural advantage of energetic labor some special reward in recognition of its [pg 207] accomplishment. Illustrations are familiar in connection with so-called fairs of all kinds where prizes are distributed for the largest product of a kind, the most profitable crop, the best article for any purpose, the greatest variety of crops or stock, or for any conceivable device which seems to add to the producing power of the community. Governments often offer premiums for plans of public buildings, and sometimes for offensive weapons. All of these operate upon the one principle of arousing special energy by superior advantage given to the successful competitor. Its advantages are evident. Its disadvantages sometimes outweigh advantages. It encourages somewhat the spirit of gambling, resulting in devices for winning the prize through false representation. It exaggerates the importance of showy qualities for the sake of notoriety, and it fosters those jealousies which too constantly interfere with the welfare of communities.
Both advantages and disadvantages are well illustrated in agricultural fairs. These have proved a most admirable stimulant to better agriculture, where clear-headed, intelligent judges have judiciously distributed prizes of such a nature as to have their chief use in establishing the quality of the product shown without catering too distinctly for the enthusiasm of the crowd or for individual profit. The chief end of all such incentives is rightly found in the educational influence from comparison of products and the establishment of standards which the whole mass of the people may be led to accept.
Bounties.—A less common but extensively used incentive [pg 208] is in bounties. These are advantages of various kinds, frequently in money, given by local or general authority for peculiar services or special enterprises. A familiar illustration is seen in the bounty of late years offered by different states for the production of sugar, especially sugar from beets or from sorghum. The object is evidently to arouse the energies of a community in a special direction, with the expectation that the establishment of a new industry will, in the nature of exchange, promote the welfare of all. Some countries have stimulated foreign exchange by a bounty upon exports, such as Germany now pays upon the beet sugar exported to other countries. Of the same nature are the gifts made by local communities for the establishment of mills, factories, railroads, irrigating ditches, all of which are supposed to bring profit to the community in general in much larger proportion than the special enterprises have received. The principle is the same when bounties are offered for the destruction of wolves, foxes and other vermin, or when standing rewards are given for the arrest of criminals.
There can be no question of the right of a community to offer this extra stimulant to particular exertions, but the wisdom is doubtful. In the first place, bounties are liable to withdraw capital and labor from more certain methods of production to more uncertain methods. Indeed, the chief object of the bounty is to entice into experiments those who would otherwise hesitate. The advantage of the bounty is very liable to be overestimated. People hasten in steps to secure bounty without careful study of the business they undertake. This is [pg 209] especially true of bounties for establishment of factories in new locations. They attract the least experienced and most speculative men, without consideration of the far more important elements of immediate market and convenient employment of labor. Railroads are built for the bonds voted without care for future profit. Enterprises of this kind, promoted by bounties, are especially liable to failure. The history of development in the west gives overwhelming evidence of their weakness. Even when the bounty is offered for reduction of vermin, it is often misapplied. Numerous cases are on record where the bounty became a stimulant to enterprise in raising the very animals to be destroyed. Even rewards for the arrest of criminals seem sometimes to create a body of men who thrive by fostering a criminal class, with a hope of sometime getting a profit from arrests. As a means of stimulating general industry they are too unstable to be satisfactory. Most probably political parties are in constant contention over the maintenance of the bounty. No more insidious enemy to the purity of politics can be found than the selfish interest aroused by special bounties.