The battle against the “trusts” is conspicuously “on.” I venture to
predict that it will fail, and to think that it ought to fail. That
it ought to fail is, in this bad world, no good reason for thinking
that it will; there is a strong numerical presumption the other way.
For doubting the success of this “movement” there are reasons having
nothing to do with the righteousness or unrighteousness of the cause.
One is that the entire trend of our modern civilization is toward
combination and aggregation. In the “concert of the great powers”
of Europe we see its most significant, most beneficent and grandest
manifestation. Denounce it how we will, fight it as we may, we are
powerless to stay its advance in any department of human activity,
social, industrial, commercial, military, political. It is the dominant
phenomenon of our time. Labor combines into “unions,” capital into
“trusts,” and each aggregation is powerful in everything except in
combating its own methods in the other. The newspaper denounces the
one or the other—and joins a syndicate of newspapers. “Department
stores” spring up all over the land, draw the fire of the demagogue
and are impotently condemned in the platform of the political trust
that he adorns. Our great hotels are examples of the same centripetal
law, and offices move to the center into buildings overlooking the
church spires. Small farms are disappearing; railways absorb other
railways and by pooling interests with those unabsorbed, evoke impotent
legislation and vain “decisions.” Cities swallow and digest their
suburbs. There are such things as guilds of authors; tramps devastate
in organized bodies, and there has been even a congress of religions.
In the larger politics we observe the same tendency to aggregation;
everywhere the unit of control is enlarging. In the Western Hemisphere
we have had Pan-American congresses and seen the genesis of the
Dominion of Canada. The United States have set up, and must henceforth
maintain, what is virtually a protectorate of American Republics—a
policy which commits us to their defense in every dispute with a
European power, gives us a living interest in all their affairs and
makes every square foot of South America in some sense United States
territory.
Beyond the Atlantic it is the same. The entire continent of Africa is
being parted among a few European nations already swollen to enormous
growth by vast accretions of colonial dominion. And all over the world
colonial federation is in the air. In Europe itself states are drawn
together into kingdoms, kingdoms into empires. United Italy and United
Germany are conspicuous and significant examples. Whether in the Other
World a movement is afoot to establish Greater Heaven by annexing Hell
neither the celestial ambassadors have informed us from the pulpit, nor
the infernal from the tribune.
Multiplication of international “conventions” and “treaties” is one
of the most striking of contemporary political phenomena. They are a
minor species of international federation, attesting and perpetuating a
community of interest which statesmen no longer venture to ignore. By
some hopeful spirits they are regarded as preliminary committee-work
of Tennyson’s “Parliament of Man.” International arbitration is a
blind step in the same direction, profitable chiefly as evidence of
the general trend. The set of the currents of human interests is from
all points of the compass toward fewer and fewer nuclei of control. We
may dislike the direction—may clamor against the current that seems to
be affecting a particular interest, but we can neither stay nor turn
it. We may utter (from the pocket) our disrelish of the “trust,” the
“combine,” the “monopoly”; they are phases of the movement and we shall
shriek in vain.
A few of the public advantages of combinations in production may be
mentioned. Economy is the most obvious. A syndicate or trust requires
just as many miners to dig a million tons of coal, for example, as a
dozen independent companies did; but it does not require nearly so
many salaried officers, nor nearly so many expensive offices. The man
who is in danger of “losing his place” is not the laborer, yet it is
the laborers who are loudest in their wail. A little reflection will
suggest many other ways in which economy of production is served by
combination; but deeper reflection, with some knowledge of commercial
phenomena, is required to make it clear that economy of production
benefits anybody but the producer. It is of some potential advantage,
at least, to the consumer that the producer is able, without
bankruptcy, to lower the price of the product if Heaven should put it
into his heart to do so.
Stability of employment is promoted by combination of capital. A single
concern employing ten thousand workmen will not hold them subject to
the whims and caprices of a single mind conscious of its ability to
replace them, as is the case with a man employing only a dozen. To a
rich corporation carrying on a large business a strike means a great
loss; to a score of small concerns it means a comparatively small loss
each, and is incurred with a light heart. Labor may be very sure of
having its demands attentively considered by those who cannot afford to
be a day without it.
A great part of the clamor against trusts is the honest expression
of a belief (promoted by many writers on political economy) that in
commercial matters the only influence concerned in reduction of price
is competition. Nearly all workingmen are more or less discontented
with the “competitive system” in industrial affairs, but few have
learned to challenge its benignity in trade. Competition is, in fact,
only one of the several forces concerned in cheapening commodities
and, generally speaking, not by any means the most considerable. It
requires only a brief experience in producing and selling to convince
an intelligent man that his prosperity is to be found in the large
sales of his product that come of low prices. Having control of his
market and a free hand in the management of his business such a man
studies to reduce his selling price to the lowest possible point. An
enlightened selfishness moves him to undersell himself whenever he can,
as if he were his own competitor.
Not all men managing large commercial affairs are intelligent. Some
of the trusts are organized and conducted with a view to enhancing
rather than reducing prices; but these are bound to fail. By tempting
the small concerns to remain in or re-enter the field, the trust cuts
its own throat. Its primary purpose is to “crush out” the independent
“small dealer,” and this it can do in only one way—lure away his
customers by underselling him. If consumers really think that is so
wicked a thing to do they have the remedy in their own hands. Let them
refuse to leave the small dealer, and continue to pay him the higher
price. This course would entail a bit of sacrifice, maybe, but it would
have the merit of freedom from cant and hypocrisy. I know of nothing
more ludicrous than the spectacle of these solemn consumers appealing
to the law and public opinion to avenge upon the trusts the injuries of
themselves and the small dealer—they having no injuries to avenge and
the small dealer only such as themselves have inflicted by assisting
the trusts to pluck him. The trust is condemned when it puts up prices,
for that harms the consumer; it is condemned when it puts them down,
for that harms the small dealer. In either case, both consumer and
small dealer make common cause against the enemy that can harm neither
without helping the other. If the history of human folly shows anything
more absurd surely the historian must have been Rabelais, “laughing
sardonically in his easy chair.”
The trusts, it is feared, will become too rich and powerful to be
controlled. I do not think so. The reason that some of them already
defy the power of the states is that, being so few, they have not until
now attracted the serious attention of legislatures. And even now our
anti-trust legislation is more concerned with the impossible task of
abolition and prevention than with the practicable one of regulation.
When we have learned by blundering what we can not do we shall easily
enough learn what we can do, and find it quite sufficient. Governmental
ownership and governmental control are what we are coming to by leaps
and bounds; and with the industries and trade of the country in fewer
hands the task of regulating them will be greatly simplified, for it is
easier to manage one defendant in a single jurisdiction than many in a
hundred.
But, it will be asked, is this to become a nation of employees working
for a few hundreds of taskmasters? Not at all. The spirited and
provident employee can become his own employer and the employer of
others by investing his savings in the stock of a trust. The greater
its gains, the greater will be his share of them. The “crushed out”
small dealer, too, can recoup himself by becoming a part of what
crushed him out. Naturally the tendency of the trusts will be to “work
the stock market,” to “put up jobs” on the small investors, and so
forth. Prevention of that sort of thing is a legitimate purpose for
legislation, and promises better results than “drastic” measures to
destroy the trusts themselves. To do the latter the laws would have
to be drawn so as to forbid any commercial enterprise requiring more
capital than its manager could himself supply. That would be a strange
law which should undertake to fix the amount of capital to be combined
under one management, or limit the number of persons permitted to
supply it; yet nothing less “drastic” will “down the trusts.” And
that would not, for it would be unconstitutional in every state of
the Union. As a contribution to the literature of humor it would be
slightly better than an apothegm by Josh Billings, but distinctly
inferior to that Northwestern statute making it a felony to conduct
a “department store”—every country store being of that felonious
character.
It is not, perhaps, too late to explain that in these remarks the word
“trust” is used in the popular sense, meaning a large aggregation of
capital by combination of several concerns under one management. It is
my high privilege to know a better word for it, but in deference to
those who do most of the talking on this engaging theme I assent to
their kind of English.
1899.