HKB
a definite assertion that, in the supply of the common services rendered by these industries, the competition of private interests cannot be relied upon to work for the public good.
Sec. 5. The industries which the State either limits or controls in the interest either of a body of workers or of the consuming public may be regarded as passing from a private competitive condition to a public non-competitive condition. If therefore we wish to ascertain how far and in what directions social control of modern production will proceed, we shall examine those industries which already exhibit the collective character. We shall find that they are of two kinds--(1) industries where the size and structure of the "business" is such that the protection afforded by competition to the consuming public and to the workers has disappeared, or is in frequent abeyance, (2) industries where the waste and damage of excessive competition outweighs the loss of enterprise caused by a removal or restriction of the incentive of individual gain. As we have seen in the analysis of "trusts," these two characteristics, wasteful competition and monopoly, are often closely related, the former signifying the process of intense struggle, the object and ultimate issue of which is to reach the quiet haven of monopoly. Generally speaking, social control in the case of over-competing industries is limited to legislative enactments regarding conditions of employment and quality of goods. Only those industries tend to pass under public administration where the monopoly is of an article of general and necessary consumption, and where, therefore, a raising of prices considerably above the competition rate would not succeed in evoking effective competition. Since the general tendency of industry, so far as it falls under modern economies of machinery and method, is either towards wasteful competition or towards monopoly, it is to be expected that there will be a continual expansion of State interference and State undertakings. This growing socialisation of industry must be regarded as the natural adjustment of society to the new conditions of machine-production. As under the economies of machine-production the business-unit, the mass of capital and labour forming a single "firm" or "business," grows larger in size and more potent in its operations, the social disturbances which it can occasion by its private activity, the far-reaching and momentous results of its strain of competition, the probability of an anti-social exercise of "monopolic" power over the whole or part of its market-area, will of necessity increase. The railway and shipping industries, for example, in countries like England and the United States, have already reached a stage of industrial development when the social danger arising from an arbitrary fixing of rates by a line or a "pool" of lines, from a strike or lock-out of "dockers" or railway men, is gaining keener recognition every year. The rapidly growing organisation of both capital and labour, especially in the fundamental industries of coal, iron, and machine-making, in the machine-transport industries, and the most highly evolved manufactories, gives to a body of employers or employed, or to a combination of both, the power at any moment to paralyse the whole or a large portion of the entire trade of a country in pursuit of some purely private interest or resentment, or in the acquisition of some strategical position, which shall enable them to strengthen their competing power or gain a monopoly. Although the organisation of masses of capital and of labour may, as is often urged, make industrial strife less frequent, the effects of such strife upon the wider public, who have no opportunity of casting a vote for war or peace, are more momentous. Moreover, as these private movements of capital and labour proceed, the probability of combined action between employers and employed in a particular industry, to secure for themselves some advantages at the public expense, will be a factor of increasing importance in industrial evolution.