When industrial capitalism arose, rather more than 100 years ago, many foresaw its dangers. It would give economic, and therefore political power to the owners of the new machines and the new system of commerce and banking. It was pointed out that the motive for producing wealth would no longer be the satisfying of human needs, but personal and selfish greed. The man who controlled a bank or a factory or a transport system would exploit his fellow men and exploit the public.
To this the answer was given: “The evil will be undone by the action of competition.” To many of our fathers—to nearly all of them at one moment—that answer seemed sufficient.
The man who owns a bakery has got the bread, and you cannot eat unless you buy from him, but another man owns another bakery and the competition between them will ensure your having bread at the cheapest rate. One man controls a new railway, and you can only get to such and such a place by his leave along that railway, but another man owns another railway; the two will compete, and therefore you will get there as cheaply as possible—and so on all down the list. Competition will serve the double purpose of making wealth plentiful and preventing any man, or group of men, from becoming masters of all.
That argument worked until within living memory; today it has broken down. All men of my generation (I was born in 1870) remember the times when steamship lines, railways, stores and pretty well all economic activities, though motivated by individual love of gain, were checked and made useful by active competition. This principle of competition had the further spiritual advantage of freedom, and freedom has a spiritual advantage when it exists because it corresponds with the divinely given free will of man. Competition existed because free citizens could start what industry they liked, where they liked, buy at their own price and sell at their own price, and the ultimate result was to the good of the community, making everything cheaper and producing abundance of wealth.
But, since the principle at the root of the thing was false, it was bound to produce false results. You do not get a good result from an evil or imperfect motive. And this motive of individual gain and profit, pushed beyond a certain point, ended in the destruction of that very competition which it pleaded as its excuse for existence. It became apparent that the two bakers could combine and so control bread. It became apparent that the two competing railroads could combine and prevent your getting from one place to another save on their own terms.
What is called, today, “the merger” was born. With it was born the chain store, the department store and all the rest of it. The smaller activities were “competed” out of existence, and monopoly began to show its ugly head. A common name for it in America was “the trust.” In England when it first appeared, the people who benefitted by it lied freely and pretended it was not there. But facts were too strong for them and they were found out. Nearly 40 years ago a far-seeing Englishman wrote “England has become the home of the trust.” Today this is universally true. You see it in everything. The English railways are virtually combined into one business, so are the banks, so are other whole departments of trade: the area of free competition becomes smaller and smaller.
This process was powerfully aided by the new invention which made the communication of commands and the delivery of goods more rapid. A man might acquire a monopoly in such and such a trade over such and such an area, before the telegraph and telephone. With the coming of these he could vastly extend his field of operations. The facility of communication enabled him to set up his stores and managers everywhere. With dominating capital he could under-sell and ruin. In the end most of the industrial activities of the community, most of those which depended upon machinery in any form, had turned into what were virtually, or actually, monopolies.
When I was a boy a vast number of milk walks (a they were called in London) looked after the distribution of milk to the populace, and each made an individual living.
Today you see everywhere the monogram and the authority of one great distributing company. When I was already approaching middle-age the fishmongers still were men with individual shops. Today, one great combine controls an increasing number of them in England, and what is worse, can dictate in terms to the fisherman. So it is with everything, except, as yet, the land. But even the land is now becoming subservient to capitalist machine control.
It has all happened with startling rapidity and has about it the appearance of an inevitable movement to which men must bow. That appearance is false, our fate is in our own hands, but by that appearance most people already have been deceived, and you hear on every side the plea “Since monopoly is inevitable, we must accept the tyranny of the state. The private citizen, economically free, is no longer possible.” We shall see in later articles why that is false.
This disease of monopoly, which is ruining freedom, and against which nearly all men protest, and some men have the courage to act—though both the protest and the action are confused—is a main symptom of our modern mortal disease.
In some things, through the nature of the instruments employed, and even through the nature of the activity itself, monopoly is inevitable. Where it is inevitable, public control or at least public check and supervision, is essential. But it often appears to be inevitable where it is nothing of the sort: where it has simply arisen through the lack of corporate institutions for guaranteeing the independence of the small dealer, the small producer and the small owner in general.
This disease of monopoly is apparent in many forms, but there are three in particular which immediately concern the modern world:
- The monopoly of production and distribution, including transport.
- The monopoly of information, and
- The most important of all, the virtual monopoly of credit.
What that means, and how it now grasps the community. I will deal with in my next article. But first let us be perfectly clear that the word “monopoliy: does not necessarily mean, used in this sense, “control by one man,” or even control by one corporation. It means control by a number of units, insignificant compared with the total number of the community. Such units work in confederation, using means of their own over which the public has no control, and therefore holding the public in their grip.
You many say that a number of competing banks exist, and that the breakdown of so many in times of crisis is a proof of freedom. You may say that side by side with the general store there is still the individual store, that new enterprises are perpetually rising up, and the small man still has a chance to make good. All that is true, but the large lines of the movement are indisputable.
Under the present system of unrestrained competition, the ownership of the means of production, transport, distribution, information, and especially credit in the hands of a few, you have an increasing tendency to monopoly, and the community is subservient to monopoly.