or beneficent in one man outbidding another for the possession of an article, or in underselling another in order to secure a purchaser or a market. In either case the successful competitor attains his end at the expense of his rival; and in neither case is it intended that others than himself should derive any benefit whatever from the transaction.

ation.

Competition may be better than custom (which, according to Mill, takes precedence of compe- Custom, tition in the order of development), when the competition, and circumstances are changed under which the co-operlatter grew up. Co-operation, again, may be better than competition when the latter is carried to excess. But even co-operation, could we conceive it capable of universal application, can never be relied upon, for it rests mainly on self-interest, and a man can never be made to act more disinterestedly by being made more selfish. Custom, local or vested interest, or by whatever name it may be called, may be good in the earlier stage of industrial development, as, for instance, in the case of patents and rights which are always granted for a limited time; competition may be good in a more advanced stage; and co-operation may, in a still higher stage, be better than either; but they are all mere expedients, provisions, or methods of carrying out the principles of fair dealing, and which, like the ceremonial law when it has lost its symbolic meaning, or positive law when interpreted according to the letter and not according to the spirit, are liable to abuse, and only act beneficially

when they express the true ethical sentiment. If sellers never demanded more than a fair profit on their goods, they would have fewer competitors to contend with, there would be less dishonest rivalry, and the public would be better served.1 There can be little doubt that the enormous profits often demanded provokes excessive competition, and excessive competition leads to the dishonest practices which disgrace modern commerce. The fact that sellers are ready to take less for their goods than they demand proves that they asked too much in the first instance, and the existence of excessive competition in any branch of trade is presumptive evidence that the profits in that trade have at one time been exorbitant. When the moral tone of the community is raised, when it is considered dishonourable to have two prices for the same article, and when a seller takes it as a personal insult to be asked to take less for a commodity than he demands, competition will wear a very different aspect from what it does at present. It is quite a mistake to suppose that competition invariably tends to reduce prices. It is only when sellers compete that prices are lowered, for when buyers compete they are invariably raised. The object of the producer in engaging in any

Tendency of compe

tition.

1 Prof. Cairnes asserts that there is a far greater amount of competition in the wholesale than in the retail trade, owing to the fact that retail dealers have fixed prices while the wholesale dealers have not, the former resting, as he says, "upon a moral rather than an economical basis," and he adds that the result is to "the advantage of all concerned.”—Some Leading Questions, p. 128–130.

branch of industry being profit, he will naturally take all the means at his command to increase that profit to the utmost. But a man will be able to make a larger profit if he has the whole market to himself than if he shared it with another, and, as a rule, the greater the amount of competition in a given market, the smaller will be the amount of profit to be divided among the competitors. It will thus become the object of every competitor to reduce the number of his rivals. The tendency of competition will therefore be in the direction of monopoly. A monopoly is said to exist when one man, or several acting together, hold entire possession of any commodity, or control any market. Competition exists when possession is disputed. If competitors, however, act exclusively with a view to their own interests, as we are told they must, it will be their main object to reduce competition to a minimum, or, in other words, to create a monopoly. Thus the principle from which the deductionist started, namely, the sufficiency of self-interest, instead of tending to competition, leads back ultimately to restriction in its worst possible form.

Conditions

The profits of producers are largest when consumption is in excess of production, and the prospect of sharing in these induces competition. When necessary production overtakes consumption, profits are late comreduced, and no more competitors enter the petition.

to annihi

field. When production is in excess of consumption, and competition goes on as before, profits may cease altogether, and then begins the struggle for existence among

competitors. Each competitor will now endeavour to obtain the customers of the others, by fair means or foul, and the inevitable result will be that strength and cunning, as in the animal world, will prevail, while the weak and honest trader will go to the wall. In order to render competition successful, in other words, to establish a monopoly, one of two things, or both, are requisite on the part of a competitor. The first is the command of a large capital; the second is the absence of all moral principle.

The first

As in a physical contest a strong man will, other things being equal, overcome a weak one, so condition, in any industrial contest the man of large capital. capital will inevitably overcome the man of small means. The large capitalist has the game in his own hands. He can arrange his mode of attack, and fix the day of victory. All he has to do, if a seller, is to undersell his rival, and the lower he fixes his prices the sooner he accomplishes his purpose. If he sells at a loss, so much the better, for then the resources of his rival will be all the sooner exhausted. It is a simple question of figures. If A has a capital of £10,000, and B who enters the field against him has a capital of £50,000, B's capital will outlast A's in the proportion of five to one; that is to say, B's chances of success will be five times better than A's. In such contests there are, of course, other conditions which go far to counterbalance the advantages of large capital, but in the present instance we are supposing these to

be absent, and that both start on equal terms in every respect except as regards capital.

The case

capitals

unequal.

We are all familiar with the process which takes place when rival lines of coaches run on the same road. The first result is a reduction of the fares, where commenced by one of the competitors, and fol- are lowed sooner or later by the other; then other reductions follow till the traffic is carried on at a loss. When this point is reached, the matter becomes simply a contest between two capitals, in which the largest is sure to win. In carrying on the traffic at a loss, neither of the rival capitalists, however, has the slightest idea of benefiting the public, and, in the long run, the public will certainly not derive the slightest benefit from the contest, but rather the reverse, for the successful competitor, that is, the one who has established a monopoly, will take good care to recoup himself when the contest is over for all the losses he may have sustained while carrying it on. Thus the public, while they imagined they were getting an advantage from the low fares, were only assisting in creating a monopoly against themselves, all the cost of establishing which will ultimately come out of their own pockets.

where

This is the ordinary result of competition when one of the competitors has the command of a larger The case capital than is possessed by the others. When, capitals however, the capitals of competitors are more equal, and especially when they have each sunk a large portion of it in starting the business, competitors do not

are equal.