Editorial: Capitalism and Monopoly. Davids who did not slay Goliath (1942)

Editorial from the February 1942 issue of the Socialist Standard

What happened after the last war is not conclusive evidence about what will happen now, but it is a very important pointer. Take, for example, the popular demand for the destruction or control of trusts and monopolies. In 1919 the Committee on Trusts appointed by the Government found “that there is at the present time in every important branch of industry in the United Kingdom an increasing tendency to the formation of trade associations and combinations, having for their purpose restriction of competition and the control of prices.”

The Committee placed on record that combinations operating in restraint of trade “are unlawful if shown to be against public policy.” They recommended the setting up of permanent machinery to investigate the operation of monopolies, and to deal effectively and promptly with abuses. In particular they recommended that the Board of Trade should have the duty of recommending “State action for the remedying of any grievances.”

Some members of the Committee, including Mr. Ernest Bevin and Sidney Webb, added some minority recommendations. While saying that they did not want to prevent the formation of combinations or associations, both because experience showed that interference is ineffective and because the formation of such combinations is desirable in order to secure greater efficiency, they urged the fixing of maximum prices to prevent excessive profits, and wanted the Government to hand over dangerous monopolies to the Co-operative Movement, or to Local Authorities or place them under State control, but not necessarily under State management.

The whole Committee agreed that the public were mistrustful of monopolies and this mistrust was realised by the Liberal and Labour Parties, both of which wanted action against them. The Labour Party, for example, had in its election manifestos a few years alter the last war “The prevention of profiteering and exploitation by rings, trusts and monopolies, not merely in building materials, but also in foodstuffs and household necessities.”

There are still to be heard voices in the wilderness demanding the control or abolition of trusts and combines, but all the speeches and promises and resolutions of 20 years ago had no important effect against the trend of capitalist industry. Whereas once the Liberals were demanding the retention of private, independent capitalist enterprise, the News-Chronicle (January 26th, 1942) can now say that “laissez faire” is as extinct as the dodo,” and a special correspondent of the Times recently wrote the following: —

“The typical British industry to-day is privately owned but centrally controlled. It is not often realised to what an extent combination, in its various forms such as price-fixing arrangements. market-sharing agreements, rings, cartels, trusts, pools, combines and plain monopolies has spread over British industry. The trade in which prices are determined by competition and in which the newcomer can enter on terms of approximate equality is now a distinct rarity. It would be an easier task, to show how in a wide range of industries, prices in the British market have been kept above the world level. There have been several public demonstrations of the art of excluding the newcomers and of hamstringing the firm that is ill-advised enough to try to increase its technical efficiency and thereby its competitive power. The great bulk ot British industry is divided into industrial fiefs fully as much as if every industry had been nationalised by the State.— (“Times,” November 29th, 1941).

News-Chronicle (January 26th, 1942) may still dream of “free enterprise controlled by the operation of the law,” and of control “designed to ensure true freedom, to exclude privilege or monopoly,” but gone are the days when a Judge would rule that a combine is against public policy as happened in 1927 (only to be over-ruled by a higher Court). In that case, which concerned the formation of a combine in the British Rope Trade, a Judge said: —

“You will never convince me that any combination of manufacturers puts down competition for the benefit of the public. Such combinations are against public policy.”

The issue has long been decided by what the Times, in a leader (December 6th, 1941) calls “the natural trend of modern industry towards monopoly.”

The present war, like the last one, will, of course, give a great impetus to the trend. The concentration of industries and trading concerns that has gone on during the war will not wholly disappear. This point has been dealt with by the “1941 Committee” of which Mr. J. B. Priestley is Chairman, in their “Planning and Freedom.” They say: —

“A scheme is improvised which drives out the small men. secures the position of the big monopolists and temporarily at least of the large trade unions. … In this case the jam which is intended to make the powder palatable is a fantastic promise about the restoration of the small firms after the war. It will be impossible to restore them. The war in fact has only hastened the tendency towards this type of monopolistic organisation. . . .”

The “1941 Committee” may perhaps overstate the case, but they are unquestionably right about the general trend. Their gloomy conclusion is that there is danger of drifting towards Totalitarianism and a condition in which it becomes “more and more difficult to preserve the democratic safeguards.”

Beyond urging every effort to safeguard democracy they have no practical proposals to offer; in which respect they are like all the other non-Socialist planners of the new world.

It is a problem to which there is no solution short of Socialism here and in the world as a whole. The Manchester Guardian’s City Editor may be right when he says (January 20th, 19-12) that President Roosevelt has not “given up his efforts to break down industrial monopolies,” but Mr. Bevin in 1919 was wiser when he recognised that experience in U.S.A. and other countries had already shown the uselessness of the attempt. Even if it were possible to put back capitalist development the result would be no more satisfactory than it was before monopolies grew up. Likewise, enough experience of alternative schemes of control or reorganisation has been seen to demonstrate that as far as the workers are concerned “the more capitalism changes the more it is the same thing.” Administration by the State in the form of nationalised railways, postal and telephone services did not make capitalism any more satisfactory, and the subsequent Labour Party programme of public utility corporations such as the London Passenger Transport Board has already had a long enough try-out to produce a situation in which ihe corporations have few convinced admirers or defenders outside their own ranks.

There will be no essential change until all the means of production and distribution are brought under common ownership and democratic control with production solely for use and the complete elimination of rent, interest and profit.