136 CHARLES J. BULLOCK 



tive system have run their course;" that "the competitive sys- 

 tem of industry is fast passing away;" that competition is 

 " inadequate and wasteful," resulting in " general depression" 

 and "industrial loss;" that the competitive regime leads to 

 warfare that is first " intense," then "destructive," then " self- 

 destructive ;" that competition is not the "life," but "the 

 death of trade" and "a destroying force to those engaged in 

 it," so that it is termed "business committing suicide." Pro- 

 fessor Ely remarks, justly enough, that such contentions are 

 "a virtual surrender to the theory of socialism." In any 

 event, the reader will perceive that it is idle for economists 

 who hold these views to imagine that their theories do not 

 lead to the conclusion that competition is impossible and 

 permanent monopoly inevitable in the industries to which 

 the discussion relates. 



In continuation of this line of argument, it is said that 

 trusts are beneficial, because they can "exercise a rational 

 control over industry," and "adjust production to consump- 

 tion." Thus it is believed that commercial crises can be 

 prevented, or, at least, that their worst effects can be avoided. 

 But such arguments overlook the facts that a restriction 

 placed upon production by a trust, especially if this is suf- 

 ficient to raise prices above the competitive rate, may react 

 injuriously upon other trades; and that monopoly profits, 

 accruing to a small body of capitalists for a long period of 

 time, must constitute a tax upon the body of the people that 

 will affect the distribution of wealth in such a way as to re- 

 duce the consuming power of the masses. A reduction in 

 purchasing power thus produced would render excessive the 

 existing investments in staple industries, and produce crises 

 in precisely the manner described by Rodbertus and Marx. 

 It remains to be seen how our own trusts will deal with the 

 almost inevitable reaction from the intense speculative activ- 

 ity of recent years in the United States. If trusts are unable 

 to destroy the competition that is now disturbing the serenity 

 of their managers, and must meet with continual interfer- 

 ence from " interlopers," it may turn out that combinations 

 professing ability to secure large profits on excessive capi- 

 talization are such a tempting mark for rival capital that 



