We have now investigated the nature of all the different classes of monopolies and combinations for the suppression of competition. We have studied their working and their effect upon the different classes of society. We have discussed the foundation principles of civilized society as seen in abstract theory and as seen in the actual practice of to-day, with the evils which intense competition on the one hand and extortionate monopoly on the other have brought upon us. Finally, we have considered the influences which tend to lessen and ameliorate these evils, and the extent to which we may rely on them to benefit the condition of society. We are now fully prepared to consider the remedies which are proposed for these evils, and to see in what direction our hope lies for the improvement of the condition of mankind.

It would be a far larger task than we propose to attempt, however, to discuss all the schemes which have been proposed for bettering the condition of society. They have been numerous ever since the dawn of the idea of popular liberty, have accompanied it all through its centuries of growth, and to-day, despite the fact that the amount of the comforts of life accessible to the masses of the people is far greater than ever before, plans for further betterment of the condition of society, the more economical production and equitable distribution of wealth, are being pressed forward and advocated more strongly than ever. Nor does this fact furnish any ground for pessimism. We shall have far more occasion to deplore when men become so conceited over the advancement which the race has already made,—so numb to the evils which still oppress them,—that they will no longer take part in the agitation of plans for further advancement.

In considering now the plans proposed at the present day by those who wish to remedy the evils of monopoly, we shall find it profitable to consider first two great opposing principles, which we will designate as individualism and societism. Upon one or the other of these principles almost every scheme for bettering the condition of society is based.

The doctrine of individualism has for its foundation the absolute industrial liberty of each individual. By this is meant that every person shall have "the free right of contract,"—that is, the right to sell his labor or property or purchase that of others as he chooses. It holds that in all matters where the production and distribution of wealth is concerned, the desire of each man to advance his own interests will, alone, in the long run, result in the highest good to the greatest number. It asks the government to "let alone" the industrial affairs of the country, and leave private enterprise to take its own course. Its adherents are fond of asserting that each man knows his own wants and can direct his own business affairs much better than any government can direct them for him. It declares that free competition is the best possible agent to regulate all industrial affairs, and it ascribes all economic evils to the fact that free competition has been thwarted or destroyed.

The opposing doctrine of societism holds that the waste in the production of wealth and the inequities in its distribution, which afflict mankind to-day, are due to the extreme application of the doctrine of individualism. Its adherents analyze competition and declare it to be but another expression of a law of savage nature, tersely expressed as "the survival of the fittest." A system which brutally forces the weaker to the wall, say they, is unfit to govern the inter-relations of civilized human beings. Condemning thus the principles and practice of their opponents, they would go to the opposite extreme and place the control of the production and distribution of wealth in the hands of organized society or of local and central governments, to be by them administered for the common benefit.

The first and most obvious commentary upon these two opposing doctrines is that either of them is impracticable; and that if either of them were given the entire control of our industries, the whole people would unite in condemning it. Lest there should be any mistake as to what is meant by this, it is well to say that we now refer to neither the individualism nor the societism which is practically advocated at the present day, but rather to the essence of the two opposing principles.

To see most clearly the practical failure of either of these principles when applied without modification by the other, consider our present social system, which is based on both individualism and societism. If the principle of individualism were to be fully applied and societism were to be entirely abolished, a first step would be the relinquishment by the government of all the enterprises it now carries on; and they would be left for private enterprise to take up or leave alone as it chose. This means, for one thing, to bring the matter plainly home, that the whole national postal system would be wiped out, and we should depend on some private company or companies to collect, carry, and distribute our mails. The government would also abandon all its work in keeping clear and safe the natural waterways of the country, as well as all the harbors, light-houses, etc. Municipal governments would give up all their systems of water supply to private companies, as well as their sewerage systems, and even paving, street cleaning, etc. Indeed, the maintenance of our whole system of highways would be given over to private enterprise. Is this too much? It is only a legitimate application of the principle that government should leave to private enterprise all matters connected with commerce and industry.

Little need be said to prove that a similar application of the principle of societism to our industrial system would result even more disastrously. As a general thing, the necessary formality and expense of administration when business is carried on by the government, causes the final cost of production to be much greater than under private management, even when conducted with all honesty. But the chief reason why the principle of societism is impracticable and unwise for universal application, lies in the fact that the men who administer our governments are neither the wisest nor the most honest of men. The competition among those engaged in private business tends by a process of natural selection to bring the men of greatest business ability into control of affairs. But by any form of government yet tried, popularity rather than merit, and excellence in the arts of the politician, rather than experience and capacity as a statesman and business man, are the qualities which place men in positions where they can control public affairs. Not that very many wise and good men do not now hold office, and that many unprincipled and vicious men do achieve success in private business. But, as a general rule, the statements just made hold good.

It seems plainly apparent, then, that neither the principle of individualism nor the principle of societism can be taken as an infallible guide for determining the control of our industry. It would be as manifestly unwise to take a step toward abolishing existing societism by placing our postal department under the control of a private company, as it would be to make a move toward abolishing individualism by having the government assume the management of all the farms in the country. Both of these principles are necessary.

There is, indeed, a marked tendency toward an increased reliance on the principle of societism as civilization progresses and our life becomes necessarily more intense and complex. A community of plain farmers, isolated from each other, can live their individual lives about as they please, without any interference of the government becoming necessary to protect the rights of each man from infringement by his neighbors. But the resident in a large village must submit to certain restrictions for the common good. He must not carry on any kind of business likely to become a public nuisance. His cattle may not graze in the streets. He must give part of his earnings toward maintaining a water supply for a protection against fire. The citizen of a great city is subject to far more restrictions. The government assumes the control of education, charities, the care of the public health, the drainage of the streets, the collection of offal, and a multitude of other duties which in a less intense civilization each family performs for itself.

The advance in science and the arts, too, has brought about a revolution whose effect we must recognize. A hundred years ago almost every community, and to a large degree every family, was industrially almost independent of every other, as we have already shown. To-day each man relies on a million others to supply him with the commonest necessaries of life. The armored knight was proof against all foes, save the few antagonists similarly clad. To-day my life is dependent on the fidelity and vigilance of ten thousand men, and every man I meet has me in his power. Given the malignant will and fiendish cunning necessary, and one single man can kill a thousand human beings and destroy a million dollars at a blow. To sum up, each advance in civilization makes men more dependent upon each other, and increases the advantage and necessity of having industries most important to the common welfare controlled by society as a whole instead of by individuals.

It is contended by some that from the increased interference of government with private affairs, there is danger that the liberties of the people will be curtailed, and that their rights will be so hedged about by restrictions that the result will be evil instead of beneficial. To this it must be answered that the people themselves are the source of the government's authority and power of restriction, and that in no case will a restriction of the government be long maintained which does not benefit far more in conserving the rights of men than it injures by infringing them. Apply this rule to any case of government action in industrial matters. A city government, for instance, constructs a system of sewerage. All taxpayers must contribute something towards its expense, and their right to spend that money in such other ways as they choose is abridged; but, at the same time, the more important right of having healthy and safe drainage for their houses is conserved. In a similar way, the government may pass laws of various sorts to restrict and control what seems to be at first sight purely private business, such as the sale of explosives, spirituous liquors, poisons, drugs, and many other articles. In every instance, this is done on the ground that the interference of government is necessary to protect the rights of the community as a whole, even though the liberties of certain classes are abridged.

The study of these facts brings to our attention an important principle of governmental action, which should always be remembered when in any industrial matter we find that the principle of individual action is producing unsatisfactory results, and conclude, therefore, to ask the government to take some part in its control. This principle is as follows: government, as the representative of the will of the whole people, should in general, attempt the regulation, or control, of industrial matters only to benefit the people as a whole.

Of course it cannot be said that all government action for the benefit of special classes of the community is wrong. The granting of pensions to those defenders and upholders of the government who deserve it, is a case in point where special legislation is justifiable and proper; and many other cases exist. Nevertheless, the shaping of legislation to effect the interests of special classes of the community is one which is now working the nation serious injury; and it has obtained so firm a bold that it will take a long time for us to throw it off. It causes men of all classes to consider the government as a paternal benefactor, whose duty it is to aid them, either in their schemes for getting rich or their struggles to earn a living; when its real office is to protect all citizens in their individual rights, undertake only such industrial enterprises as can manifestly be better and more economically conducted by it than by private enterprise, and enforce restrictions upon industry only as they are needed to protect personal rights or the interests of the community as a whole. Worst of all, the use of government to advance special interests places a premium on the efforts of those who seek to corrupt the expression of the popular will in its every stage, from the voters at the polls to the chief rulers in the seats of government. For by combining to accomplish their mutual purposes, they are able to turn aside all departments of government from their legitimate work and occupy them with measures to advance special interests, some commendable enough, others a mere excuse for stealing from the public treasury, but all alike claiming attention and action, while the business of the people goes all awry.

It has seemed necessary to thus briefly discuss these two opposing theories of society, individualism and societism, in order to show the impracticability of either when applied to the society of to-day without limitation and modification by the other; and that in adopting or rejecting any remedies that may be proposed for the industrial evils which we have discussed, we should be guided by the facts as we find them, and not by blind adherence to abstract principles.

Let us now gather up the salient decisions which we have reached in all our past investigation. We have discovered that a great industrial revolution is in progress, by which manufacturing, mining, and transportation to a very great extent, and other industries to a considerable extent, have been and are being concentrated in the hands of a very few competitors. We have found that by the laws of competition this reduction in the number of competitors greatly increases the intensity of competition and the resulting waste and instability of price, and finally brings monopoly into existence. This monopoly we have determined to be a serious infringement on the rights of the people, and we have found that the losses due to intense competition and the fruitless attempts to defeat monopoly by adding new competing units have wasted the wealth of the nation in uncounted millions. We are now to consider the remedies proposed for these evils.

The most obvious remedy for monopoly, and the one which has been tried and persevered in with the most remarkable faith, is the creation of new competitors. Does a railroad monopoly oppress us? Build a competing line. Is the gas company of our city charging us $3 per thousand for gas which cost but 50 cents to produce and deliver? Let us start another gas company and tear up all our pavements again to lay its mains. Has the sugar trust put up the price of sugar two cents per pound? Well, "sugar can be produced anywhere by the expenditure of labor and capital," the Trust's lawyers say, and so we will "trust" that some enterprising manufacturer will take the field against the combination. But if we do any of these things, we have added only one competitor to the number in the field. And with only two competitors in the field, competition is sure to be so intense and wasteful that the formation of a new monopoly is a matter of but a short time.

This is the conclusion to which the theory brings us; and the more one studies the history of actual attempts to create competition in this way, the more thoroughly convinced he must be that the inevitable result will be the same,—the tacit or formal combination between the old monopoly and the new competitor, resulting in the re-establishment of the absolute reign of monopoly. The author has thoroughly studied the actual working of hundreds of schemes, in every part of the United States, whose object was to create competition in railroad transportation. It is a most astonishing fact to see the eagerness with which thousands of municipalities, all over the country, which have taken great loads of debt upon their shoulders to secure "competing lines," and have seen these lines swallowed up by their rivals, are still anxious to repeat the folly and assume new burdens to aid in building new lines, which will inevitably be absorbed like those which they preceded. If the people as a whole learn wisdom by experience, they seem to learn with painful slowness. The first great lesson for the people who are groaning under the burden of monopoly to learn, then, is that when we try to defeat monopoly by creating new competing units, the remedy is worse for the community at large than the disease, and effects at best but a temporary relief.

Another class of remedies against monopoly seek to accomplish their purpose by opposing the tendency to a reduction in the number of competing units. There are not wanting people who, having gained a dim perception that monopolies are an inevitable result of the modern concentration of industry, conclude that, after all, "the former days were better than these," and that our wisest course is a retrograde one. Fortunately, however, these people are comparatively few. It is a fact so plain that even the dullest can hardly fail to perceive it, that the consolidation and concentration of industry which have gone on everywhere have wonderfully cheapened the cost of production,—made it possible for us to make better goods with a less expenditure of labor and material. The revolution in our industries could not be undone without a more radical action toward vested property rights than could be countenanced now; and as already seen, it would work to the detriment of every person in the community. We cannot go back to the stage-coach, the workshop, and the hand-loom of our ancestors; we cannot, if we would, undo the growth of a century in civilization; and it is well that it is so.

But while most men see the benefit which has resulted from the consolidations already effected, there are but few who are not opposed to further consolidations. It is argued that the reduction in the number of competing units results in increasing the intensity of competition, which is assumed to be a desirable end; and that it has also worked great benefit in the reduction in cost. Having attained this, it is proposed to stop further consolidations and prevent the establishment of monopoly. This is what most of the present plans for giving relief from monopoly propose to accomplish. Certainly the task is no easy one; let us inquire if it be even possible.

We may safely assume, in the first place, that the competitors in any industry will always be reduced to a very small number before the public will be sufficiently aroused to make any movement for the prevention of consolidation. So long as a monopoly is not imminent, usually, indeed, so long as it is not in actual operation, no one cares or notices how far consolidation and combination goes. Now by the laws of competition, when the number of competing units is small, competition is intense and wasteful, and acts to so reduce the returns from industry that combination and the establishment of a monopoly are a natural sequence.

Evidently this result can only be prevented by some interference outside the industry itself. If we allow it to take its own course, a monopoly is certain, sooner or later, to be formed. But the only agency which has the right and power to interfere is government. The question then is, can government successfully interfere to prevent intense competition from bringing about monopoly? In order to do this it must of course keep competition in action; but it cannot do this directly. Competition is essentially a strife. No law was ever enacted which could force two men to fight if they were really determined to be at peace. No law was ever enacted which could force two manufacturers or merchants to compete with each other in price, if they really were agreed to sell at the same price. The common-law principle that contracts in restraint of competition are void, so often appealed to nowadays, has really but slight power. It merely prevents the parties who make an agreement to restrain competition, from enforcing such agreements in court. Attempts have also been made to apply this principle to secure an annulment of the charter of corporations which engage in monopolistic combinations. Even if this be successful, the only result probable is that private parties instead of corporations will carry on the monopolies in a few cases, while in most cases the competition-destroying agreements will be made so secretly that it will be impossible to prove their existence.

It is thus plain that the action of the government in declaring the restriction of competition to be illegal is wholly ineffectual to check the growth of monopoly. And, further, the fact is that it is hardly possible for the government to take any more extreme stand in the matter. Let us suppose that it does declare, not only that these combinations are against public policy, but that they shall be punished. Then would it be a punishable offence for two country grocers who had been selling sugar below cost to agree that henceforth they would charge a uniform price and make an eighth of a cent per pound! It is to be remembered that competition necessitates action. Can the government, therefore, compel a man to compete, to cut prices below his neighbors, or to carry on his business at all, if he does not choose to do so? Such a law would establish the government's right to regulate the conduct of purely private business to a degree never before known. Such a law to protect the theory of individualism would be a most flagrant infringement of the rights of individuals. It is plain, then, that government cannot possibly keep up competition by direct action.

Whether it is possible to do so by indirect means is a much harder question. Monopoly results, as we have found, from the intensity of competition. If it is possible to modify the intensity, to keep the candle from burning itself out too quickly, so to speak, it is possible that competition may be kept alive by legislative enactment. So far, practically nothing has been done in this direction, and it remains yet to be seen what remedies of this sort may accomplish.

A pertinent example of an attempt by the government to keep competition alive is the Interstate Commerce law. Before its passage the railway companies had a patched-up and nominally illegal species of combination to restrict competition, known as pooling. As described by President Charles Francis Adams of the Union Pacific Railway, "it was merely a method through which the weaker corporations were kept alive." The Interstate law prohibited this restriction of competition, and also, by enactment of the long-and short-haul clause, made the competition more widespread and injurious to the railways. As a result an astonishing impetus has been given to the growth of the great systems and the consolidation of the minor competing roads. More than that, however, the great increase in the intensity of competition has done so much to drain the resources of the companies and injure their revenues, that some measure for uniting all the railroads of the country under one management is now being seriously planned by many men in railroad circles. Thus this result, which was probably inevitable, has doubtless been hastened many years by the action of the law. The means taken to intensify competition has operated, as might have been expected, to hasten the complete establishment of monopoly.

We have now found that monopoly is the inevitable result of the concentration of competition in any industry in a few hands, if events are allowed to take their natural course; that the only agent which has either the right or the power to interfere in the case is the government,—National, State, or Municipal; that government cannot punish directly those who form combinations to restrict competition, without exercising to an unprecedented degree its right to interference with private affairs; while its attempt to deter men from establishing monopolies by refusing its protection to them in their contracts to restrict competition has proved to be but a slight hindrance to the growth of monopoly.

There are, then, but two ways of preventing monopoly from establishing itself and laying such a tax upon the people at large for the supply of the commodity which it controls as it chooses. The first is, action to reduce the intensity of competition so that the weaker competitors may maintain their independence and not be forced to consolidate with their stronger rivals. The second is, action to permit or encourage the establishment of monopoly, and regulate by some means other than competition the prices which it shall charge for the products and the quality of product which it shall supply. These two general classes of remedies which we find to be feasible we will discuss here only in a general way. The first, reduction in the intensity of competition, has hardly been tried in any form, and we cannot yet say what practical means should be taken to put it into effect. We will return to this at a later period in our discussion.

The second remedy is the one towards whose adoption we are rapidly working. State and Interstate Commissions have already been established to regulate railway monopolies; and in general it is true that the people who feel the burden of monopolies are looking to the government for relief, and expect it to take positive action for the control of other monopolies as it has for the control of railways. It will be seen that we have now arrived by a study of the various possible remedies for monopoly at the same irresistible conclusion to which we were brought by our study of the laws of competition. The proper remedy for monopoly is not abolition but control. It seemed necessary to conduct this independent investigation in order that no blind adherence to individualism and no thought of the possible efficacy of other remedies might lead us to doubt this important truth.

We have next to consider the fact that the government can control monopolies in two ways. It can either permit the monopoly to remain under private ownership, and regulate its operations by law and by duly appointed officers; or it can itself assume the entire ownership and control of the monopoly. Which of these plans is the better, is a question of public policy over which future political parties are likely to dispute. One party will hold that when it is necessary for the government to interfere to protect those whom it represents from the oppression of monopoly, it should assume at once the whole ownership and management of the monopoly. Their opponents will argue that government should interfere only to the extent needful to maintain the rights of the public; and that it is far better that industry should be directed by the private individuals whose interests are at stake than by government officials. To discuss fully the arguments for each of these two principles of our future practice in dealing with monopolies, would be beyond the intended scope of this volume. It can only be briefly said that the arguments presented will certainly indicate that the conditions surrounding each given monopoly will have great weight in determining which policy is the most advantageous. It would be manifestly unwise, for instance, to place our postal facilities under the direction of a corporation, even though its operations were regulated by government. It would be even more unwise to place the operations of the flouring mills of the country in the hands of a department of the government. The important factors to be considered in deciding any given case are, first, the importance and necessity to the public of the service, and, second, the question whether production in the given case is likely to be carried on more economically by the government or by private enterprise. The former has an advantage in that it can secure its capital at a lower rate of interest. The latter, an advantage in that it secures greater efficiency from the labor it employs. Other circumstances being equal, it would appear wisest, then, for government to take direct charge of those monopolies in which the greatest amount of capital is invested and the least labor is employed, leaving to private enterprise under government regulation the operation of monopolies in which the opposite set of conditions prevails.

As already stated, however, the question is complicated by the social and industrial effects which might follow a large transfer of enterprise from private to governmental direction; and these effects we will not now discuss.