§ 10. The Economic Strength of other Trusts.
§ 11. Industrial Conditions favourable to "Monopoly."
§ 1. The forces which are operating to drive capital to group itself in larger and larger masses, and the consequent growth of the business-unit, require special study in relation to changes effected in the character of competition in the market and the establishment of monopolies. The economies which give to the large business an advantage over the small business may be divided into two classes—economies of productive power, and economies of competitive power.
In the first class will be placed those economies which arise from increased sub-division of labour and increased efficiency of productive energy, and which represent a net saving in the output of human energy in the production of a given quantity of commodities, from the standpoint of the whole productive community. These include—
(a) The effort saved in the purchase and transport of raw materials in large quantities as compared with small quantities, and a corresponding saving in the sale and transport of the goods, manufactured or other. Under this head would come the discovery and opening up of new markets for purchase of raw materials and sale of finished goods, and everything which increases the area of effective competition and co-operation in industry.
(b) The adoption of the best modern machinery. Much expensive machinery will only "save labour" when it is used to assist in producing a large output which can find a tolerably steady market. The number of known or discoverable inventions for saving labour which are waiting either for an increase in the scale of production or for a rise in the wages of the labour they might supersede, in order to become economically available, may be considered infinite. With every rise in the scale of production some of these pass from the "unpaying" into the "paying" class, and represent a net productive gain in saved labour of the community.
(c) The performance of minor or subsidiary processes upon the same premisses or in close organic connection with the main process, the establishment of a special workshop for repairs, various economies in storage, which attend large-scale production.
(d) Economies consisting in saved labour and increased efficiency of management, superintendence, clerical and other non-manual work, which follow each increase of size in a normally constructed business. These are often closely related to (b), as where clerical work is economised by the introduction of type-writers or telephonic communication, and to (c), as by the establishment of more numerous and convenient centres of distribution.
(e) The utilisation of waste-products, one of the most important practical economies in large-scale production.
(f) The capacity to make trial of new experiments in machinery and in industrial organisation.