Private Monopolies and Public Rights
Arthur T. Hadley
[Reprinted from the Quarterly Journal of
Economics,
Vol.1, 1887, Boston (for Harvard University) p. 41]
This monopoly, due to the advantages of large organizations of
capital, is characteristic of the present day. Legal monopolies,
created by law, are largely a thing of the past. Natural monopolies,
like that of land ownership, are still important; but they are not the
matter of supreme importance in productive industry any more than in
transportation. The writings of Henry George have led to an
exaggerated estimate of the practical effects of land monopoly. In a
recent discussion between Mr. George and Mr. Hyndman, the leader of
the English socialists, the latter showed with great force how little
change would be actually made by the nationalization of the land, if
capital organization remained as it now is. The chance given to the
small producer by access to the land would be very slight, so long as
the possession of large capital gave a chance for so much more
economical use of power as to constitute a de facto monopoly.
George's theory of public land and private capital corresponds
closely to the old transportation theory of public highways and
private carriers. And Hyndman has shown that this is no more possible
in highly organized productive industry than in highly organized
transportation ; that the control of the capital gives virtual control
of the business, howsoever the land is held. While George chooses the
first of our four alternatives, Hyndman chooses the second, and would
have consistent socialism in production as well as transportation.
The majority of men in all ranks are still trying to carry out the
third alternative, - private ownership in Q land and capital,
and free competition at the same time; but they are gradually learning
that in those lines of industry which involve large capital, under
concentrated management, the old theory of free competition is as
untenable as it was in the case of railroads. That a great deal of our
productive industry is thus monopolized hardly admits of doubt.
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