GENERAL ECONOMIC LAWS AFFECTING TRANSPORTATION

Of all the various clubs used by trusts for attacking rivals and driving them from the field, the first in order is the one which depends on getting special rates for transportation. Railroads develop monopolies within their own sphere and also contribute greatly to the development of monopolies elsewhere. The second fact is the more important, but both require attention.

THE FOREGOING PRINCIPLES APPLIED TO THE RAILROAD PROBLEM

Simple Cases of Charging “What the Traffic will Bear.”—The value of a study of primitive carriers and their policy lies in the fact that it illustrates principles which apply to transportation by a complicated system of railroads, although in this latter case they are not easily discerned. Imperfect competition is what exists in the department of carrying.

ORGANIZATION OF LABOR

What an economist wishes first to know concerning the organization of labor is whether it is a natural phenomenon which should be welcomed and left to itself. Does it help to establish wages on the basis of the productivity of labor, and does it do it without much reducing that productivity? We shall find that it works both well and ill in these particulars and needs close study and careful regulation.

THE BASIS OF WAGES AS FIXED BY ARBITRATION

The state needs an authoritative mode of determining what rate of pay is “reasonable.” This duty is often imposed on boards of arbitration, for whose guidance no definite principle of justice has as yet been prescribed. Such a board has to depend on its own intuitions. It approaches its difficult work, having no legal rule for reaching a decision, and yet compelled, if possible, to reach one which will actually settle the dispute referred to it and enable production to go on.

BOYCOTTS AND THE LIMITING OF PRODUCTS

When free from the taint of monopoly, trade unions, as has been shown, help rather than hinder the natural forces of distribution. Collective bargaining is normal, but barring men from a field of employment is not so. Connected with this undemocratic policy are certain practices which aim to benefit some laborers at the cost of others, and thus tend to pervert the distributive process.

PROTECTION AND MONOPOLY

The more serious perversions of the economic system which we have encountered have all been traceable to some working of the principle of monopoly, and it is important to know whether any established policy of governments lends force to this evil influence. Import duties were established in America for the purpose of protecting industries as such, and a vital question now is whether they have now begun to protect monopolies within the industries.

LEADING FACTS CONCERNING MONEY

Dynamic Qualities of Money.—The question concerning money which, for the purposes of the present treatise, it is most important to answer is whether general prosperity can be increased or impaired by manipulating the volume of it. Is money a dynamic agent, and can it be so regulated as to induce economic progress? These questions require careful answers.

SUMMARY OF CONCLUSIONS

Perpetual change is the conspicuous fact of modern life. So revolutionary are the alterations which a few decades make in the industrial world as to raise the question whether there are economic laws which retain their validity for any length of time. If there are not, we have one economic science now, and shall have a different one ten years hence and a widely dissimilar one a century later. Of Descriptive Economics this is true, since it changes with the world it describes; but it is not true of Economic Theory.

Abstinence, 339 et seq.

Accumulation, the law of, Ch. XX.

Altruism, 39.

Arbitration, 469, Ch. XXVI; as affected by monopoly, 483 et seq.; compulsory, 489–490, 497–498, 502; voluntary, 493 et seq.

Birth rate, as affected by economic conditions, 328 et seq.

Böhm-Bawerk, 17 note, 33.

Boycott, Ch. XXVII.

Ca’-canny, 509 et seq.