Evening star., 1944-04-23
Monopoly Faces Indictment
On 10 Counts After Study
O'Mahoney Committee Experts List Reasons
Why Competitive System Should Be
Protected in Public Interest
Bv Charles G.. Ross.

monopoly? The Temporary National
Economic Committee the O'Mahoney
committee) went exhaustively into this
question in its long and distinguished
Investigation of the concentration OF
economic power in the United States.
A monograph prepared for the COM
mittee by DR.. Clair Wilcox, professor Of
economics at Swarthmore College, gives
a definite summing up Of the case OF
competition VS.. monopoly, with this
conclusion: There are but a few areas
in which it is clear that the public in
terest can be better served by monopoly
than by competition" In the natural
resource industries, DR.. Wilcox found
that the need for conservation sug-
gested the desirability of noncompeti-
tive exploitation, and in certain other
fields as in the telephone business, that
the function performed was such as to
demand 'co-ordinated development
under common control" It was pos
sible, he said; that there were other
fields-but they could not be numerous
in which the technology Of production
was such that the most efficient opera
ton. could be attained only through
monopoly.
The argument recognized the follow
ing advantages of monopoly: It can
avoid wasteful duplication Of productive
facilities. It can simplify and standard
ize products. It. can minimize expendi-
lures on advertising and salesmanship.
It can command essential information
and cut the cost of bargaining and ne
gotiation. 1t can apply the discoveries
resulting from research to the entire
output OF trade. Moreover, the mo-
nopolist being under no competitive
pressure to adulterate his goods or de-
press the standards of labor, can, If he
wishes, so conduct his business as to
serve the common interest; he is, how
ever, in the absence of effective public
regulation, under no compulsion to
do SO.
Monopoly, it was found, might afford
the investor greater security and q
steadier return than he could obtain
under competition; on the other hand,
monopoly in practice did not invariably
serve the interest of the investor, since
its price policy was likely to be one
that obstructed adaptation to economic
change and thus imperiled investment.
Also, the report pointed out, the pros
pective profits of monopoly were often
SO highly capitalized as. to yield the
purchaser of its securities a small and
uncertain ret,,rn
Ten Indictments.
Ten indictments against monopoly
were listed
First, the monopolist limits his output
to the quantity that the market will
take at the established price.
Second, monopoly affords the con-
suner no protection against extortion.
Third. monopoly affords the worker
no protection against low wages and
long, hours; his only protection lies in
organization for collective bargaining,
with the strike threat in the back
ground.
Fourth, monopoly inficts no penalty
on ineficiency.
Fifth, monopoly is not conducive to
economic progress. Though the monop-
olist may invent new materials, methods
and machines, he is reluctant to use
them If they will compel him to scrap
existing equipment.
Sixth, monopoly prevents the full
utilization of productive capacity.
Seventh, monopoly obstructs adjust
ment to economic change and thus con-
tributes to general industrial instability.
Eighth, monopoly impedes the raising
OF the general plane Of living; this be-
cause, in ways set out above, it makes
the total output of goods and services
less than it otherwise would be.
Ninth, monopoly contributes to in
equality in the distribution of income.
The monopolist is under no compulsion
to pass on to labor or to consumers the
gains resulting from improvements in
technology. -s.
Tenth, and finally, monopoly threat
ems the existence of free enterprise and
representative government.
st. Louis Post-DispatchD