No other part of economic theory has been so much misunderstood as the theory of monopoly. The mere mention of the word monopoly usually stirs up emotions which make clear judgment impossible and provokes, instead of economic arguments, the usual moral indignation evinced in etatistic and other anti-capitalist literature. Even in the United States the controversy raging over the trust problem has supplanted all impartial discussion of the problem of monopoly.

Whether the monopolist can exploit his position at all depends on the shape of the demand curve of the monopolized commodity and on the costs of producing the marginal unit of the commodity at the existing scale of production.

The possibility of monopolizing the market varies radically with different goods. Even the producer who is protected from competition need not necessarily be in a position to sell at monopoly prices and obtain monopoly profits.

In an economy based on private ownership in the means of production, specific primary production is the only field liable to monopolization without special protection from the State. Monopolies in certain branches of primary production are possible. Mining, in the widest sense of the word, is their true domain. Where to-day we have monopolistic structures which do not spring from government intervention, they are — apart from such instances as the railway company and the power works — almost exclusively organizations built up on a power to dispose of certain kinds of natural resources.

The desire for an increase of wealth can be satisfied through exchange, which is the only method possible in a capitalist economy, or by violence and petition as in a militarist society, where the strong acquire by force, the weak by petitioning. In the feudal society ownership of the strong endures only so long as they have the power to hold it; that of the weak is always precarious, for having been acquired by grace of the strong it is always dependent on them. The weak hold their property without legal protection.

The assertion that wealth on the one hand and poverty on the other are ever increasing was maintained at first without any conscious connection with an economic theory. Its supporters think they have derived it from an observation of social relations.

The theory of increasing poverty among the masses stands at the centre of Marxist thought as well as of older socialist doctrines. The accumulation of poverty parallels the accumulation of capital.

Atendency to the concentration of establishments or to the concentration of enterprises is not by any means equivalent to a tendency to the concentration of fortunes. In the same degree in which establishments and enterprises became bigger and bigger modern capitalism has developed forms of enterprise which enable people with small fortunes to undertake big businesses.