MONOPOLIES
Maoriland Worker, Volume 6, Issue 249, 24 November 1915, Page 3
About this newspaper
MONOPOLIES
* tar, •j. 7 a.""cflngifffe > J . aUIvZ ..... V , Wellington-w"..E.-/ The word monopoly, in its origiu, illea 11 & the cxc'luslvo'right of ealo of some, artic!?, and this meaning vis the oils tirst. attached to oariier forms cf •nlonopolic-s. In. Tudor times, it.; , was very common.for tho sovereign to grant corce individual cr group of individuals, the privilege of exclusive manufacture and sale of sonio particular article. ; All the. old monopolies were : 'legal," based on- a grant) from the Crov;n. But- th* more modern : -type which is of interest to no is of rather a different slid wore subtle nature, since they have grown up without tegil recognition and are outsido the law. Those monopolies must however he distinguished, from .another -feKkncy which it, important in modern time*., tlte growth of large-scale production: Tils, development of production on a largo Lealoj even whore it is aceomjuiiied'by. different 'font's of combing tion, .doei not. necessarily monopoly, 'though ; monopoly doee in fact often result from it. The old idea-of cxclu&i'/enesa in the salo of soroo conimedity ~still is dominant, in tho conception of monopoly; but added to it in modern times is increased emphasis of tho control of production as well as sale- This is of course- the logical result of the introduction of ui;muf:iutiiting 'processes. EARLY CAPITALIST MONOPOLIES The mcdiqcval craft-gilds, in their minute regulation of production, acid rigid - control of marketing, were very successful monopolies; but their basis was broad, >ince they ■' comprised, in their early stages at least, , ' practically ail, , the' artisans , who were engaged in iiny particular' trade. "When the inti'dductiou of money dissolved tho feu,-jjj dal systems arid made possible the or>s ganisaiion of industry- on a capitalist- P |)J2eis, the craft.gilds disappeared, and ?l uh«ir place was taken by the clothiers j? nud other ; capitalist)employers. - -It. is* i a lhistn.fco -.however to Assume,! as.did '• tlio. English' classical economises, that : 5 i a'nsra of 'fr.eo eornp'stitidn was-inaugur§ ' at-W immediately, for industry rtook on 3 a* distinctly monopolistic character.. The S TM°rs especially Elizabeth, were ia 9 j tii'o habit of granting exclusive rights to s individuals, ostensibly to introduce new : tirades; but ot'fen to gain revenue or < , to , reward -eomo court* favourite. It ; docs, not appear however that the f (J'r6wn oven in> tho days of tho needy j Stuarts was able. to.,gain. a groat deal I of.revonue from this source, though the i ;monopolists''iijeniselycs accumulated i fdfetlines. . . ' • ; ■ j .t'Ah interesting -typo of monopoly uas j cvo}vxd;iV6:ii tho .old Koyul 'prerogative I on mining which was farmed .out by tlie CWn.to; speculators. 'Particularly with tho • Xoith of England coal and Jtho■Cor'ui&h tin, thc;Ciipitalistei'itvcst ed bugo sums of money, even for our, times; in,''developing tho mine's, and in both cases monopolies quickly evolved. In 1590 wo get a compbint fionj London that the coal ownors of Ko'.wastle were exploiting the market, and ikcic is f deiinife'evidence that,a -small group of owners .controlled production, ( often- rostrioling tho. output and carved out the ' t.elliug. ncld iunongH,themselvc-s. '/ . "i'lio- mau'jfactureiVi vi "nalfc,: alum. tzfan- (i.iid i(inf, hcl'} direct grants.or monopoly':from tho. Crown, and thosn industries were msjoipula-tcd in.,tlw in- | terests of the monopolists. . The home productioit of alum and salt was never [ sufficient to meet tho need, and since ! the tariff had been invoked to prohibit 1 imports, the demand could' be ihst only by smuggling There was a long conflict between the old &oap makers, who ■ used- potash, and the new monopolists. Th'o.-.wsre to'TH.s a ,ttew. prit£s%. Court influence .was iftvolred to-prohibit th& import of. potash; but,the now. process failed.and ,tli6 moriQpoHsts were glad'to E$U out their pfivileges to the old soap mikers, who phus tecanio in their turn, a rigid moubpolTr::.' ' ' . The pin liidußtry, too, which, was organised on tho !.domestio s> stem, fell within' the'operations' of some of the courtieVsj who had tho workmen ihci-rporated-and. by advancing.capital to thiiil,- .sOofi gained tho cntiro direction ? andc6ntr6i of : th& industi-y'- •■ ■Theso early monopolies failed in their new trades, while this checitf 'given. to' liiusinecs ( eiiterpri?6 'sbvev.ei; " •every ins'tanco • prices WerD-'vaJßed/',i9nd;.ofteii;.the quality of ■gobd's , ;. was bo' ihat : bitter resenttasnt" ws ;the result.. Even•• the aut'ocrai Elizabeth had ' ; to.'giro''way to tlid inibnso opposfltion'of .tlio House of ahd'iiilJ' through ■;tho • Civil War 6 tho parliament; fought 'patonto and.monbp'clieo juet as' Wtt<jrly-;.?is they fought all the fisc'&ro3:r>e<ifents or" tho'Crbtvi.'" "' ■'■ ';■ '''":,■ FRE? CQMPEtITION;- • "■'■ ®je- fariiimeiiWry l struggle.' :o'f ?. '-the SsVenteeritn ■ ce'rrtUry, -K*l : aroused- e'o Hostile a spirit to Smith, writing -in- 1776, free competition.' ■ Tn cttanion' •-with •'. the other founders of economic •'•sciencb, Smith extols individual' enterprise, and constantly deprecates"' corporations of any kind. His- phillipic agaihet- joint stock companies ■ia well-known, and k£ stated emphatically that the -success "of the chartered-' companies • in ' foreign' • trad®'was due merely to tHe;ir;-'p.rs#il'6gje" i of -fiibnopo-ly,'. The--early .ccbrleniiits-as* j £ume<i' tjfib- only tftif -'sras I th9,.Mte r 3l; *7Re. of .industrial organi'saticn, but that coiKbinatfon bstween | rivals was impossible; MeCuUpch, ignoring -the -reservations -.Adam Smith had mads, attempted by a reductio ad absuidum, to , prove tha.t combinatioi? was impossible because the. more efficient manufacturer, would never sub- < aiifc to bs content with tho loss profit of'the weaker members. It is a. fact, however-, that competition .wis'the general 'r,uls--;ir. thoeiglltsenth century. In .tho early stages c.^the liidustrial Be» ■voltiticE there wc-re an enormous nur.:-i«r of snill cctton' and mills, and it was' the oscassiva coftipotitrcn of these EMill ccr.csrns which, caused ±aii cf .tie'ffli&ery of thi transffirniioi r . . bompefcitieh which-., werked c so irxcciblj in the d the early w?itar-s, was harsh and j siting aad sub■ jeci to- oscestivo .friction is practice. , THE VENB. ■ j !• Tho Icdujtrial .Reroliitiofc- ■'■L.'&mfihi viHsi iV 04 iacrcat© ik-
L, on October !3. .:'■ ■■:• demand for coal, and' tie development of: the coa! miuc;* was one of tho og.rlieit features of tho changed industry. Tho iiE.ptojcnleiH of jm&ehincry 'reacted ia tho miuoi>, and steam pumps and other improvements constantly iricre-atcd production. For, a time;there v;a£ very keo:i competition; but in 1771 the Ivoivcajtle oivners farmed a-u 'jticciation to control the output. ' *Sea s * coals had ! a monc-poly of the London market, I time transport difficulties precluded competition iioni ether .coal£<?Jd.'j, and tho Vend va:; formed to ksap Loiidoi! pi'iiroe at •<. high level. Thero veio minuto regulations.- a<. 15 the quantity each mir-e thould. produce monthly. a.ud tho central body oxer* cised very active control over its nieru- Lors. In 1830 tho improvements ia transport made possible tho'opening of tho Teos coalfield, and a period oi ! 3*yerc- ccmpstitiou.'en&ued, till tho new mine* vere nbsorbed into i<, new association. For the. next, ton or fifteen years the Vend nat at the height of it* power and completely controlled the London market. It- operated through »• i ing of London merchants, sc-Hing onl.v to this ring, arid regulating the supplj {to s& to keep tho price at a figure which furnished the maximum profit. For the purpose of tho association v-a& undoubtedly to iucroaso tho profits of. the members, though tho alleged leason was the preservation of tho industry. In actual practice tho weaker mines, survived at tho expeute oi -the moro efficient. The succcv-s of the Vend was duo i,o tho monopoly of tho London niarket and the concentration of production in a. single- locality, so that when, the railways Logan to develop in tho 'ion-ies, and open up tho iuland '.coalfields, the -Vend; was threatened. For ijj long wliilp it fought, tho railways in l'arliara.ent; but tho competition from, tho' neir coalfields .beoanje to inteiu<ath)it the,efficient mines would no longer.bplist«r:.,up 'tltoir aisoeiales, amd .the fend .collapsed, in J. 814. 'There was a: similar inonoriol.T in tne Oppper industry!, which practi?e.d dumpittg on a large-scale,, su that the price in Sweden 1 was always .lower than, in the ''United Ivingdoin- by an •• amount equal, to tho freight and the duty payable-oil Both of these monopolies were almost perfeut oxkmples of the modern German tj'pb—the Cartel. 1 SLOW DEVELOPMENT OF MONO POLIEB IN ENtUAND. Monopolies aro most uasily dovelopoc in industries'which-deal with minora; products,■ biicli'uk coal, iron, petroleum because tlfeir production, is usually con fined-to a limited area easily ccjitrolloil and the market is restricted by th , .: ■dilScultio&'of' transport.. In England. tl)& deposits , both of fo.al and of iron are to diffuied'ovcr the' country, thjit' though there have, been numerous ciforts at oombinat'iou with tho objei-t ot •monopoly, noiiohas tjcoii successful.vet Tho possibility of niODCjK'ly in tLit: finiihed producis of industry, liua'Lcen considerably reduced by the lice trudn taritt' of- England. Tho whole- object of monopoly is to inauipuluto prices aurl foutrol' production to that ontl , ; but tho possibility : of foreign imports-usmil'. iv piohibit6 restriction'of piudacti.r Then, -100, isincc it. i.s not -possible to inonopoht>o tho fundamental industries I of coal and iron, tbo huge vertical combinations from' raw materials to 6nit'lied products -have not appeared in England. Bui in recent years' there has been an increasing tendency towardc monopoly, even - in' tho'. toitiki trades, , wßich' furnish the classic es■aniples of fi'ec competition. THUSTB AND CARTELS, ' The ljiovement to monopoly is .best studied outside England, particularly in Germany and' tho Ignited States; but , the apaly&is of modern trusts must stand over'till next eessicn. . • I There are tvt"o opposite tendencies in business, organisa.tion, tho movement towards large-scale production and : a counte,ra.ctins tendency towards the survival of tho s-niall bubiness in certain, trades. .Tho first movement 13 best seen in industries -which call for a large capital outlay, and particularly in ■ banking, and transport. Banks, insurance companies, chipping, railway and f tramway, companies'te»d to £row big- I ger aid "bigger. ..This development was hastened by the. evolution of joint' stock companies' iv their iwodeni form, and ' has been especially uotjceable since Jim! ited, liability 'was granted in 1862. The growth of joint stock companies, < by .o'fferiag facilities for investment. 1 tends to incroaee tho'number of small capitalists, so 'thai tho big finaa'ciera rather control than onu tho businesses they directs The big business -has obvious advantages of economical produc-tiotij; by •better 'metkods of■■pi-oSuetioa, and;' - foriinarketiiig j bat;:,the , .-lees.. oW-ioub 'dj|aiSvanfege&-, of dfecreseirig• : «ffii»ieiicy teiid to-ohe'et tho ■growth-of ibusfdess ajter'a-cbrtain sfege has been refach'edi-'-As long -as competition i 3 nbt" fettered-, a ■ business will not groiv sobig as to'be iimvielcy/becauso its more efficient rivals wjll di>£place it.- ■ ■ ■ As businesses grow competition be* ! comes keener and the rivalry between j notoriqusly jpbre-bitter ; than'that..Ketween small..'businesses..lnj fevitabiy succeed a' period of--.ihte.n£4"'cbnipe*ition, .anH- this' leads naturally to Monopoly whenever circumstances arc favourable,- as 'where - tariffs restrict competition or-the legal limitation of sale enables the supply to be.controlled, as in the brewery industry. These- monopolies, however, are not an inevitable product of capitalist, but show certain capitalist features intsasifiec!. ' '.'. ■ • . ' In inoclern times'there are two main] types' - of monqpolils—the' , German cairtel-'-'consists,merely.'-ei a"l6o&s associa-' ticix df'.raanu-fsct-jrj&rs t6 : regulate production and control price, and is a- ring or pd<i! of separata Houses, while the 'vs.or6 thorough-going American trust combiicG th& businesses into oce lugo' | £rm. The lattor : follow two lines cf! anialgataatior., horizontal, the' absorption cf all btsinesiec cf a particular type, -..tuch. at all facteriss producing sfcoel rails, cr ver-tical, tho of •all the processes in an icduttry, from tho raw material to tlao fiaislied w>,d«4 ■ -. ' .'';'
Monopolies in their character :of largo-scale buiiiHiteos eften achieve greateconomies of production, -ffnd by * wfHiie dP fflfl'frtis»*tng and-otlierleriWir^CQWfMStiiica},;xUte dor a service to the community. The service, however, is merely incidental, since ihb main object of a- 'monopoly ' 13 to make profits, so that output and " price aro regulated in private interests' ■ j af: against tho social interest. Coinpo' i titio'.i, however roughly and lar&hly, • j docs tend to rcgulato preductiou ac-. ': cording t6 the common necessity. But ! the evils of moriopolj - arc worst when 'i tho 'butineifl has srfwn so big as to be ' really inefficient and expensive in its J method-;, holds the market and crushes j ■j out competition by underhand.use of its; I power. Secret, rebate:, and coramis-; I lions, political, railroad and business j I corruption, dumping. iin«:o djfxrimina- I tioriE, intinndatio'.i and boycott- io, j hold bu£,m;-£i v.hoi! ot-h*i- mcUicdc fail. j- — - ''
