As we take a look back over the long list of monopolies which we have
investigated in the preceding chapters, the natural thought is that we
have considered now the greater part of the industries of the country.
Certainly these occupations of manufacturing and trade and
transportation, are generally considered as our important industries,
and a pretty good share of our legislation and public agitation concerns
itself with the welfare of these industries and with the men who are
employed in them. But certain questions will naturally arise in the
curious mind. Just what proportion of our total working population are
employed in these industries; and of that number how many are reaping
the profits of the monopoly? What are the remaining occupations of our
people, and are the workers in them doing any thing to destroy
competition? To the investigation of these matters we will devote the
present chapter.
The United States Census Bureau classes the gainful occupations of the
people in four great divisions: (1) Agriculture. (2) Professional and
Personal Service. (3) Trade and Transportation. (4) Manufacturing,
Mining, and Mechanical Industries. The monopolies which we have studied
in the preceding chapters are all included in the last two classes. The
total number of persons engaged in trade and transportation in the
country in 1880 is given as 1,810,256, and the total engaged in
manufacturing, mechanical, and mining operations is 3,837,112, or a
total of 5,647,368 in all these occupations among which we have found
monopolies to exist. Of course the great proportion of the persons
included in the above number have no direct interest in the profits of
the industries in whose operation they aid. It is, indeed, argued that
the manufacturer, miner, or merchant who is making enormous profits,
pays, therefore, larger and more generous wages; but it is urged on the
other side that while this is true in isolated cases, the general rule
holds good that the price of labor is governed by the law of supply and
demand; and that, as already pointed out, monopoly among producers means
a monopoly among purchasers of labor. Let us now, however, leave out
this indirect benefit which may, or may not, accrue to the workmen in
these various occupations, and find as nearly as we can the number which
are, or can possibly be, directly benefited by the operation of
monopolies. Let us deduct from the total of 5,647,368, such classes of
persons as it is evident cannot have a direct share in the results of a
monopoly and are not engaged as skilled workmen in a trade which has
been organized to control competition.
We may certainly deduct the following items from the total:
+---------------------------------------------------------+----------+
| Agents | 18,523 |
| Clerks, salesmen, and accountants in stores | 445,513 |
| Commercial travellers, hucksters, and peddlers | 81,649 |
| Draymen, hackmen, teamsters, etc. | 177,586 |
| Sailors, steamboat-men, canal-men, pilots, and watermen | 100,902 |
| Apprentices | 44,170 |
| Blacksmiths | 172,726 |
| Fishermen and oystermen | 41,352 |
| Lumbermen, raftsmen, and wood-choppers | 43,382 |
| Photographers | 9,990 |
| Saw-mill operatives | 77,050 |
| Tailors, tailoresses, milliners, and dressmakers | 419,157 |
| +----------+
| Total |1,632,000 |
+---------------------------------------------------------+----------+
There are a great many other occupations in the list[4] from which these
items are taken which might properly be included in the above, as the
combination which does or can exist in them it is almost certain is of
no practical importance. On the other hand, however, our total of
5,647,368 takes no account of the persons interested in trade,
transportation, or manufacturing through holding the shares or bonds of
incorporated companies; also the errors and omissions of the census are
so great in any event that only broad and general statements can be
based upon them. Deducting, then, from the total of 5,647,368 the
1,632,000, which we found to be surely not interested in monopolies, we
have about four million persons as the utmost number who are benefited
by the profits of the monopolies which we have thus far considered. But
let us look into this a little farther. As we have already stated, the
monopolies of trade are generally unable to raise prices far above their
normal rate. In retail trade, especially, competition shows great
tenacity of life. Also with regard to labor monopolies, it is true, as
we have already stated, that the limits of their operation are pretty
closely defined; even the men in the highest grades of skilled labor
cannot secure for each workman by any combination more than two or
three dollars per day over what he would receive under the freest
competition. Let us, therefore, deduct from the preceding four millions
the persons engaged in retail trade, and all skilled laborers in the
various trades which we formerly included because we conceived that they
might be connected with some form of labor organization, and might also
obtain some benefit through the profits of their employers. But when we
make these deductions we find that we have only a hundred thousand or so
of our four millions left. Briefly summed up, therefore, the fact is,
that the strong monopolies in manufacturing, mining, trade, and
transportation are owned by a very small portion of the population. Just
what this number is, it is impossible to say, for the stock and bonds of
railroad companies, mining companies, and manufacturing companies are
changing hands continually, and no public record is taken of their
distribution and ownership. It may possibly be true, however, that one
million different persons own an interest in some of the various
monopolies which we have studied, excluding the monopolies in trade and
labor. But even if this estimate is correct, it is a well-known fact
that a few hundred immensely wealthy men hold a large share of the stock
of these very profitable monopolies.
[4] From the "Compendium of the Tenth Census of the United States,"
Part II., pp. 1378 and 1384.
Leaving the questions which this statement opens up, for later
consideration, let us consider the other classes of occupations in which
men engage for the purpose of gain, and see if this far-reaching
movement towards the destruction of competition has infected them, and
whether it has proved, or can prove, so successful there as it has in
the industries considered in preceding chapters.
The third great class of occupations, rendering professional or personal
service, gives employment to over four million persons (4,074,328), and
includes in its members those in widely separated ranks of society.
It is, of course, true that the competition in the professions is far
more a competition of ability, real or supposed, than it is a
competition of price; and the former is a competition which is never
likely to be done away with. Yet in all occupations, to a greater or
less degree, there tends to arise more or less competition in relation
to price, and the professions are not entirely exempt. Lawyers, indeed,
seem never to have felt the necessity of fixing any minimum tariff of
fees; and so far as is known, clergymen have never combined to advance
their salaries. But the medical profession has its well known code of
ethics which debars its members from "pushing their business," and has,
in certain places and times at least, prescribed a minimum tariff of
fees. It should be clearly understood, however, that this is not cited
with the intention of putting any aspersion upon the medical profession
in any way. The services which are freely rendered to the poor, and the
disgusting indecencies and insults which are thrust upon the public by
some who choose to ignore this code of medical ethics, would make us
ready to forgive very much worse things than a possible tendency among
members of the profession to refrain from "cutting under each other" in
the matter of fees.
But while the three older professions have evidently little need or
disposition to combine for the purpose of increasing their income from
the community, some of the newer professions occupy different ground.
Architecture is coming to be a profession of no small importance. The
principal architects' society, the Association of American Architects,
has a regular schedule of minimum commissions below which its members
are forbidden to go. Another singular case of professional combination
is the Musical Protective Union, a combination of professional musicians
in New York City, which fixes minimum prices that its members may charge
for their services. On the whole, however, it must be said that the
limitation of competition in the professional and intellectual
occupations is in this country still in its infancy. In England the
fixing of prices of professional service by usage is very much more
common, and in many professions the check to competition thus effected
is of no small importance. To the careful observer there are indications
of a tendency in a similar direction in this country. Is it not more and
more common in professional circles to see a slur cast on the man who
will work cheaply? There is hardly an occupation or specialty which has
not its Associations and its periodicals; and what is more natural than
that an association for mutual benefit should come to adopt that certain
method of securing mutual benefit at the expense of the public, the
restraint of competition?
Examining the remaining occupations in this division, we find that those
engaged in them form a large percentage of the whole population. There
are of laborers whose occupation is not more definitely specified,
1,859,223. Then there are 1,075,655 domestic servants, 121,942
launderers, 77,413 hotel and restaurant employés, 24,000 soldiers,
14,000 messengers, and enough in other occupations similar to the above,
in that very many persons can engage in them without special training,
to make it certain that at least three fourths of the members of this
division, or a little over three million persons, belong to the class of
unskilled workers, among whom, as we have already seen, the attempt to
limit competition and force up wages has not, and cannot possibly have,
more than a limited and doubtful success. Nevertheless, to a very great
extent, the unskilled laborers of the country as well as those working
at minor trades are organized for mutual help and protection; and while
they cannot increase much the rate of their wages without drawing a host
of competitors, they can do much in the way of protecting themselves
from injustice and extortion, as we have pointed out in the preceding
chapter. It may be possible, indeed, that certain changes in the future,
as the requirement of greater skill and efficiency in all kinds of
labor, may make combinations in this class of occupations easier and
more effective. Our domestic affairs, for instance, are constantly
growing more complex, and require greater skill in their operation.
Housekeepers are prone to think the "servant girl" problem serious and
perplexing enough already. It remains to be seen what they would say if
a "Cooks' Protective Union," a "Chambermaids' Sisterhood," or a
"Laundresses' Amalgamated Association," should assume control of the
wages and hours of labor of their domestics.
To sum up, we find that as a whole the 4,000,000 persons engaged in
rendering professional and personal services are in general not
increasing the cost to the public of their services by combining
together to limit competition; and that so far as we can determine, it
is not probable that many of them can do so in the future, even if they
are so disposed.
There remains yet one important class of the community to be considered:
those engaged in agriculture. Can the farmers of the country fall into
line behind the manufacturers and miners and railroad owners, and force
up the price of their products by killing competition, to correspond
with the increased prices which are demanded in many other lines of
industry? They have one thing in their favor in that the principal
products of the soil are necessaries of life, which the community cannot
do without whether the price be great or small, although an increase in
price is sure to result in a decreased consumption.
We may best determine this question by inquiring exactly how the prices
are forced up by monopolies. There can be but one way. The laws of
supply and demand hold good, and it is out of the power of the producer
to greatly affect the demand. It is only the supply of which he has
control. From the manufacturers' trust to the laborers' union, the only
way in which prices can be controlled is through a reduction in the
supply of goods made or men allowed to work; and if the price were to be
arbitrarily raised, the result would be the same; there would be a
surplus of goods, or some unemployed workmen. In order to raise the
price of his products, then, the farmer must do one of two things, which
will bring in the end the same result. He must send less of his products
to market--lessen the supply--or refuse to sell any thing at less than
the increased price which he desires. In either case, if he plants the
same acreage and gets the same yield as before, he will have a part of
his crop left on his hands.
The query then comes, can it be possible for the farmers all over the
country to form so perfect and well-disciplined an organization that
every member shall diminish his remittances to market of grain, wool,
meat, hay, or what not, enough to raise prices; or that he shall refrain
from selling all these articles below a certain defined price? It must
be plain to every intelligent person that it would be a practical
impossibility to effect such a thing. It would be possible to bring only
a small percentage of the farmers in an area 3,000 miles in length and
1,500 in width into a single organization; and it would be essential to
the success of this, as of every other scheme, that no outside
competition should be permitted to exist.
It may be argued that the Knights of Labor succeeded to a degree in
gathering into one organization a large proportion of the workingmen in
all the various trades in the country; but their members were mostly in
cities, many worked together in great factories, and as regards ease of
combination, they were far more easily handled than the widely scattered
farmers of the country could hope to be. Besides, the Knights of Labor
organization appears to be too unwieldy and cumbrous to be long
successful, and internal dissension seems to have already brought it
near its end. It is plain that the farmers are powerless to effect a
reduction of the competition among themselves. Nor is this condition at
all likely to change. Farming is unlike other modern productive
industries in that the cost of production does not decrease as it is
conducted on a larger scale. The most profitable farms are, and perhaps
will always be, the small ones, where the details of the tillage come
directly under the eye of the owner.
Such are the facts with respect to the prospect of making a monopoly of
agriculture, and it would seem that they are so simple and so easily
understood that no attempt would ever be made to restrict competition
among farmers. It is to be recorded, however, that such attempts are
being seriously made. Prominent farmers of the West in the spring of
1888 took the preliminary steps towards the formation of a farmers'
trust. Conventions were held and resolutions adopted reciting that the
operation of trusts in manufacturing industries and of monopolies in
trade and transportation laid serious burdens on the farmers of the
country; and that in order not to be left behind in the struggle for
existence the farmers must combine for their own protection. Committees
were appointed to work out the details of a plan of organization; but
the movement seems to have lost vitality when its projectors came to
study it in detail. The preceding argument fully explains the reason.
It should be said, however, that coöperative associations among the
farmers are growing at a rapid pace. The Grange and the Farmers'
Alliance are primarily coöperative associations for the purpose of
benefiting their members in the purchase of goods and in various other
directions, and they are fast increasing in numbers and influence. The
attempts made to benefit their members in the sale of their produce have
been generally confined to protection against the "middle men." The only
movement of which the author is aware for restricting production to
increase price, has been in certain sections of the South, where
recently a general attempt has been made to restrict the acreage planted
in tobacco in the hope of raising the price.
It is a matter worthy of note here that the combined influence of the
farmers of the country has recently been successful in securing
legislation to defeat an important outside competitor. A few years ago
some chemists found out that from a cheap substance known as beef suet,
an imitation butter could be made, which was in composition and
appearance the same as butter made by the ordinary process, and was
exactly as nourishing a food. There has been much talk of the halcyon
days to come when the progress of science will be so great that food
will be made in the laboratory. Well, here was an important practical
step in that direction. A cheap product worth three or four cents a
pound could be easily converted by a chemical treatment into a valuable
food worth three times as much, and the great profit in the business
brought this substitute for butter rapidly into use. But at once an
indignant protest went up from the farmers of the land. They were being
ruined by the competition of the "grease butter" as they disrespectfully
called it. There was something suggested about the idea that if just as
good butter could be made out of the fat of the cow as out of her milk,
and at half the expense, that it would be a benefit to everybody in the
country who had butter to buy. But the weak protest for the protection
of the general interests of the whole people was not heeded, and
Congress passed a bill laying a tax on the new butter sufficient to stop
the sale. Here was an evident case of killing competition for the sake
of the farming interests, and the force of their unorganized sentiment
alone was sufficient to secure the desired legislation. But when the
farmers attempt to form a trust, they will have to kill competition
among themselves instead of outside competition; and that is a different
and far harder matter.
To agricultural laborers the same rule applies which we have found to
govern other unskilled labor, viz.: that combination cannot effect much
in raising wages. Added to this is the fact that they are widely
scattered, and that a great proportion do not follow this as a steady
occupation. In England, indeed, there is an agricultural laborers'
union, and we may possibly come to that here. But our circumstances are
widely different. The fact that in many sections the agricultural
laborer is not a "hand," or an "employé," or "servant," but a "hired
man," is an important one, for the difference in terms denote a vast
difference in conditions. It is hardly likely that an organization of
any sort is to be expected among those in this occupation.
This last division of occupations contains the most members of any of
the four divisions. The farmers of the country number 4,225,945 and the
farm laborers number 3,323,876. Other minor occupations of the division,
as gardener, florist, etc., bring up the total engaged in agriculture to
7,670,493.
We can now make some interesting comparisons. The evident effect of
monopoly is, in general, to tax the community at large for the benefit
of those who own the monopoly. Let us see what proportion exists between
the two classes:
+-----------------------------------------------------+------------+
| Total number of persons engaged in manufacturing, | |
| mining, trade, and transportation (occupations more | |
| or less monopolized) | 5,647,368 |
| | |
| Total number of persons engaged in agriculture and | |
| in furnishing professional and personal services | |
| (occupations not monopolized) | 11,744,821 |
+-----------------------------------------------------+------------+
Thus at the greatest estimate we can make of the number benefited by
monopolies, for each man who is gaining by them, two are having their
income reduced. If we take the estimate previously made, that the utmost
number of persons who can possibly be reaping benefit by ownership of
the especially profitable monopolies, trusts, transportation lines,
mines, etc., is one million, we have opposed over sixteen millions of
the community who are being taxed by their operation. Let a sharp
distinction be drawn at this point, however. The above comparison is to
be confined to the things between which it is made, and not confused
with others to which it has no reference. It is not a comparison of the
sort which social agitators are fond of making between the great numbers
of the working classes and the relative scarcity of the wealthy. Except
so far as the operation of profitable monopolies by the few tends to
bring about this unequal distribution of wealth, that is a matter with
which we have nothing now to do.
There is one point in this connection, however, which it is well to make
plain, as it concerns a class of people which is not included in either
of the four divisions that we have already described--those who live on
the income of their property.
We have before alluded to the fact that in the popular speech
"capitalist" and "monopolist" are often used interchangeably. If we
carefully consider the real status of the capitalist, however, we find
that of the three requisites of production--labor, capital, and natural
agents--capital is the requisite which is most perfectly secured from
the control of monopoly. The rate of interest for the use of capital is
regulated so perfectly by the law of supply and demand, that all the
anti-usury laws which have ever been enacted have been able to
accomplish but little in enabling the borrower to secure loans at a less
rate than that prescribed by competition. The reason for this is plain
on consideration. The total supply of accumulated wealth of the whole
civilized world is engaged in this competition, and the millions of
wealth which are added every day are new contestants in the market.
Competition in other products is held in local bounds by the cost of
shipment over long distances; but wealth in the form of value can be
transferred quickly and easily to any part of the civilized world where
a market awaits it. Every person who earns money or owns property is a
potential competitor, in that he can be made to lend his capital for
great enough inducements. Under the pressure of this competition, the
price for the use of capital--the rate of interest--has steadily fallen;
and the enormous production of wealth of which our industrial resources
are now capable is such that the fall is certain to continue, and a very
few years will see loans at 2 per cent. as common as those at 4 per
cent. are to-day. Combination to restrict competition among those who
loan capital for investment is an utter impossibility. The number of
people with money to loan, or with property on which they can raise
money for that purpose, if they wish, is too large a proportion of the
population to be ever brought into a combination to restrict
competition. The stringency which sometimes occurs in the money market
need not be cited as a contradiction of this statement. That is a matter
which has only to do with the currency. The broad fact, and it is a most
important one, is that capital, a necessary agent of production, can
never be monopolized.