Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
_Perversions of the System caused by the Action of Corporations in
their Entirety._--More directly within the domain of pure economics is
the relation between the typical great corporation and the majority of
the public which is wholly outside of it. In the common mind this
relation also often appears as that of plunderers and plundered, and
what it often has actually been, is a relation between corporations
which have exacted a certain tribute and a body of consumers which has
had to pay the tribute. Bound up with this general relation between
the manufacturing corporation and the consuming public is one between
it and producers of raw material which it buys and with laborers whom
it hires. In this last relation what is endangered is the normal rate
of pay, present and future. The type of measure which protects
consumers protects the other parties who are affected by the great
corporation's policy. Workers are safe and producers of raw materials
are measurably so if the power of competition in the making and
selling of the goods is kept alive. If we prevent the trust from
taking tribute from the purchasing public, we shall by the same means
prevent it from oppressing laborers and farmers.
_Why the Business of a Monopoly should never be regarded as a Private
Interest._--The people are already putting behind them and ought to
put completely out of sight and mind the idea that the business of a
monopoly is a private enterprise which its officers have a right to
manage as they please. A corporation becomes a public functionary from
the time when it puts so many of its rivals out of the field that the
people are dependent on it. As well might the waiter who brings food
to the table claim that the act is purely his own affair and that the
customers and the manager have no right of interference, however well
or ill the customers may be served, as a combination of packers might
claim that any important detail of their business concerns them only.
The illustration is a weak one; for in the case of a trust which
controls a product that is needed by the public, it is the full
majesty of the people as a whole which is in danger of being set at
naught. Such a company is a public servant in all essential
particulars, and although it is allowed to retain a certain autonomy
in the exercise of its function, that autonomy does not go to the
length of liberty to wrong the public or any part of it. The
preservation of a sound industrial system requires that governments
shall forestall injuries which the interests of the monopolistic
corporation impels it to inflict. No discontinuance of essential
services, no stinting of them, and no demand for extortionate returns
for them can be tolerated without a perversion of the economic system.
The natural laws we have presented will work imperfectly if, for
example, the danger of a coal famine shall forever impend over the
public or if this fuel shall be held at an extortionate price.
Public-domain text, read in full here on John Shaqi.
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