SECTION F.— ECONOMIC SCIENCE AND STATISTICS. 



RATIONALISATION OF INDUSTRY. 



ADDRESS BY 



Prof. D. H. MACGREGOR, 



PRESIDENT OF THE SECTION. 



A very remarkable change took place after the war in the expression of 



both public and economic opinion in respect of what may generally be 



described as the problem of industrial leadership). In the former period 



the growth of great concentration of control over production was regarded 



with distrust, and as a thing which had to be carefully watched in the 



interests of the community. While it was admitted that the old theory 



of competition was not working without disadvantages, it was believed 



that all over, these were less than the disadvantages which might result 



from anything monopolistic. It was considered that the anti-Trust 



legislation of the United States and other countries was a serious and wise 



attempt to deal with a public danger. The theory of business profit was 



connected with the fact that risk was paid for, and had therefore to be 



taken ; that enterprise essentially involved this risk-taking function of 



the producer ; that the best risk-takers would win in the competitive 



struggle, and that it was in the general interest that the worst should be 



eliminated. Because of Joint Stock, the units of enterprise became 



larger and more powerful, and this by itself tended to make competition 



more intense ; so much so that it became usual to apply military terms 



to the relations of producers, to speak of ' the war of competition ' that 



was fought between the ' captains of industry.' But there was no settled 



opinion that, alongside of the growth of Joint Stock, there had not grown 



up conditions which qualified the risks of competition ; transport widened 



the market, there was a great organisation of market intelligence, big 



concerns knew more about each other, and in many ways they co-operated 



more fully than would have been possible if they had remained more 



numerous and less powerful. There was a recurrence before public 



Commissions and inquiries of all sorts, of the producers' view that 



competition had become anarchic, chaotic, excessive, unregulated, or 



destructive. But this kind of complaint did not translate itself in all 



countries into the obvious methods of remedy by combination. It was 



always said that British producers remained comparatively individualistic 



in their attitude, meaning that they were unconvinced by the arguments 



used elsewhere. The American combination movement was often 



explained by the special effect which her high tariffs had in over-capitalising 



protected industries, and causing on that ground an excessive competition 



that need not have happened. Again, it could not be said that, given 



