Who's Against Monopoly? (1964)

From the December 1964 issue of the Socialist Standard

If the pollsters organised a canvass of the electorate on the question “are you in favour of monopoly”? they would get an almost unanimous “no.” But it would mean no more than would a poll asking “are you in favour of right against wrong” or some such loaded question. Monopoly is defined to mean, an “exclusive trading right in a certain commodity or class of commerce or business.” All the political parties declare themselves to be against it. In the recent General Election the outgoing Conservative government claimed merit for what it had done against monopoly and what it was prepared to do “to stimulate the forces of competition which make for efficiency and bring down prices.” The Labour Party didn't think much of this and promised to tackle the problem “at its roots” and to get at “monopoly and semi-monopoly price fixing.” The Liberals, too, are on the side of competition against monopoly, or so they say.

Here we have our first mystery. If three big parties are all against monopoly and have been so since the beginning of the century how is it that there is any monopoly to be tackled? The explanation is to be found in the nature of the social system in which we live. All manufacturers, traders bankers, shipping lines, aircraft companies and so on are in business to make a profit by selling something. The most distressful situation for any one of these organisations is to find that it cannot sell its product because a competitor is in the market with a cheaper one. Faced with declining sales and the threat of bankruptcy the companies that are being driven out will consider banding together for self-protection against the successful rival. He for his part will be expanding rapidly and out of the ensuing struggle there will emerge a smaller number of larger firms, possibly a very small number on the way to establishing a near monopoly. In the years since the war mergers and take-overs have eliminated thousands of manufacturing and retailing businesses. The latest wave has washed away a lot of grocery wholesalers. In an article “Wholesalers Combine or go under” the Financial Times (13 November 1964) states that in the last decade the number of wholesalers in the grocery trade “has tumbled from some 1,200 to just over 700 today.” This has happened as a direct result of competition, first from multiple and chain stores which have their own wholesaling arrangements and were taking business away from the independent shopkeepers (and thus from the grocery wholesalers) and secondly from the increasing practise of manufacturers selling direct to retailers and by-passing the grocery wholesaler altogether.

Concentration of the control of wholesaling and retailing will go further but it has a long way to go to reach the condition of such industries as chemicals, man-made fibres and steel.

The development towards monopoly in any field always provokes complaint that as competition disappears prices will be pushed up, and the demand that the government should do something about it This is not just a problem of this century. For hundreds of years the ceaseless efforts have been going on of sellers to control the supply, and of the authorities to prevent prices being pushed up as a result. It was however accompanied by the formation of monopolies by the government itself as a means of raising revenue. At first this took the form of the government, in return for payment, allowing individuals to have the monopoly of supplying some article or other; later the government operated some services itself, likewise as a means of raising revenue, as in the Post Office. In our day the government raises vast sums through its control of the import production and distribution of alcohol and tobacco; first creating the restrictions behind which monopoly prices can be charged, then skimming off as customs and excise duties the bulk of the monopoly price paid by the consumer.

When private monopolies or semi-monopolies are operating it depends on the kind of product and the extent to which it is in common use, whether the outcry against the monopolies will produce action by the government, to break it up or otherwise nullify it. About the middle of the last century railways were the only quick means of Transporting raw materials and manufactures from manufacturing areas to markets and ports. They were increasingly able to charge monopoly prices. Against this the manufacturers and trades generally had a common interest—it was a situation which often develops, the capitalists generally being held to ransom by a particular section of capitalists. The government, under the initiative of Gladstone, at that time a Tory, got Parliament to pass an Act giving the government power to nationalise the railways. It was a threat to the Railway managements, either curb your rapacity or be taken over.

Similar causes explain the early nationalisation of Telegraphs and Telephones, the setting up of the various Port authorities, and later the nationalisation of electricity. (In a rather different category was coal nationalised and the taking over of the steel industry. Here it was rather a question of large-scale and integrated organisation being needed for modernisation, to save industries falling behind technically and unable to solve their problems themselves in reasonable time.)

The attitude of the general body of capitalists towards a private monopoly operating a service such as transport or telephones is direct and immediate. Likewise if the product is some material such as steel or chemicals entering largely into manufacture and building. Having to pay monopoly prices raises general costs of production and reduces the profits of the capitalists who have to buy from the monopolists.

The effect of monopoly is sometimes indirect but no less harmful to the general body of capitalists: that is if the monopoly is in some product such as food which enters largely into the workers’ cost of living. Higher prices of these articles induce workers to press for higher wages; to the detriment of profits if they succeed, to the detriment of their own standard of living if circumstances are against them.

Once it is realised what gives rise to monoplies and the way they help those who own them and injure others, it will be readily understood that there cannot under capitalism be a consistent and logical attitude towards monopoly. All that can be said of the great majority of people is that each group is against other people’s monopolies, and the sectional groups change their attitudes with changing circumstances. Karl Marx in a letter written in 1852 criticised a writer who had declared that the aristocracy are on the side of monopoly and the capitalists against it. Marx pointed out that in the eighteenth century the English aristocracy had been all for the freedom of trade, but in the nineteenth century they were defenders of the corn laws which filled their pockets, and opponents of the manufacturers who had become free traders and believers in the benefits of “competition.” The manufacturers wanted the abolition of the protective duties on imported corn because they saw in cheap food the certainty of low wages for their workers and consequently higher profits for themselves.

At the present time the manufacturers who buy steel are somewhat divided about re-nationalising the steel companies. On the one hand they don’t like being dependent on a private semi-monopoly and recognise that with reorganisation and concentration the costs of producing steel might be lowered, but they are not confident, in the light of experience, that nationalisation will serve the purpose.

Just for the record we can make it clear that the SPGB, alone among the political parties in this country, really is against monopoly. But for us it is not a problem of private profit-making or nationalisation, high prices or low prices, high wages or low wages because socialism will have no place for profit, or prices or wages—simply production solely for use.

Edgar Hardcastle