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From Labor Action, Vol. 14 No. 21, 22 May 1950, p. 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Representative Emanuel Celler has come up with a new Word – “oligopolies.” Oligopolies are the successors of the old-fashioned monopolies which to him are as outdated as the Sherman and Clayton anti-trust laws. He aims to amend these laws, and to this end he and his committee in the House are carrying on an investigation into oligopolies.
Celler is out to prove that oligopolies have control of many of the industries which are “the backbone of the nation.” In place of the old single, combines, major industries are now controlled by two, three or four large corporate entities which “while competing among themselves and not in direct combination, have a deadening effect on. outside competition.”
Some of the figures Celler tosses off in public interviews are very interesting indeed. In 1947, of the total capital assets of the country, 46 per cent was owned by 113 out of the more than three million American businesses. In individual industries concentration has developed so that three companies already control 100 per cent of aluminum production; three companies make more than 90 per cent of all soap produced; three companies make 95 per cent of all tin cans and tinware; three companies make over 90 per cent of all linoleum – a series of facts very interesting to the housewife. Three large companies control all cigarette output; three control the whisky business; the “Big Three" dominate auto manufacture; and so on.
All this has a very familiar ring. Labor has for years and years pointed up the oligarchical concentration of industrial power and its evil effect on prices and on the social stJucture. Going further than organized labor, socialists, guided by the Marxist analysis of capitalism, have constantly and consistently followed and exposed the inevitable development of competitive capitalism into industrial oligarchy and have urged the working people to take over industry to be run for use and not for profit.
Now capitalist politicians are rubbing their eyes. Their much vaunted “free enterprise” and “free competition" have gone with the wind. Representative Celler wants to bring the anti-trust laws up to date. He also thinks that where it is proved that bigness and absence of competition mean more efficiency an industry should not be broken up but be looked upon as a public utility and subjected to controls.
Another of his ideas is that the question of “conglomerate concentrations” should be gone into. Perhaps General Motors should be told to get out of. everything but the production of autos; that distillers should be ousted from the production of food, chemicals and pharmaceutical goods; that soap manufacturers should be discouraged from manufacturing oleomargarine. And Celler, being limited. by his profit-system concepts, thinks that maybe, big business should get tax inducements to shave off some of its bigness.
Another capitalist politician worried about business bigness is Senator O’Mahoney, chairman of a Congressional economic committee. He thinks, for instance, that “The great steel companies exercise such tremendous power and have such influence on all segments of American economic life" that they present an extraordinary problem. He does not think that the Sherman law, even if amended, is sufficient to insure free competition. The assets of large corporations are so great that “by Fabian tactics” -they can out-wait any anti-trust suit.
This at least the senator has learned. So he proposes his own solution. Punitive measures must be supplanted with "preventive" measures. Up to now corporations have functioned under state charters which in no way delimit the activities of business. The senator wishes corporations to exist under federal charters which would set the limits of corporate activities. He would not regulate the size of corporations per se, but would prohibit conglomerate branching out, would make types of industrial holding companies illegal, also the setting up of private managerial systems in national and international trade, the division of territory, fixing of prices, curtailing production, etc.
It is hard to see how federal charters making certain practices illegal will command more obedience than laws already on the books, which already make these practices illegal. Also how can this new charter system affect the oligopolies now in power? To be sure, the senator has some doubt and admits that his solution would not solve “completely” the problem of the “Big Threes” and “Big Fours” in major industries.
All the politicians who belatedly see the menace of industrial oligarchy, in addition to whatever pet solutions they may have, agree that small business must be encouraged. Probably President Truman’s recent proposals to Congress to aid small business will receive favorable consideration. The president’s proposals embrace the following: government insurance of bank loans to the smallest businesses. similar to present insurance of loans to householders; organization of investment companies calling on average investors to finance “larger” small businesses; improved operation of the Reconstruction Finance Corporation anent small businesses; provision by the Department of Commerce of technical and managerial aids to small businesses unable to carry on resfefttSh 'by themselves as do large companies, similar to such service no-w given to farmers by the government.
Perhaps the best answer to those who hope to build up small business – as a Maginot Line – against the oligopolies was given by some of the industrialists testifying before the House committee or in public interviews.
For example, the president of Republic Steel testified that his company buys products from over 12,000 different companies and in turn sells its products to 14,000 businesses. Along the same line, the president of DuPont stated that his company has 30,000 suppliers, a majority being small businessmen, as well as 65,000 business customers. These industrialists cited these figures to “prove” that they could not exercise “undue influence” on such large groups and that as a matter of fact small business and large business are a happy family.
However, a more objective and disinterested interpretation of these figures is that expressed by Senator O'Mahoney when he stands aghast at the great companies which “exercise such tremendous power and have such influence on all segments of American economic life.” Actually the giants of industry have the power of life and death over the thousands of small businesses dependent on them. This is shown very concretely during steel shortages, real or fictitious, when srhall businesses are victimized at the will of the giants; as it is shown when small businesses disappear entirely into the gargantuan maw of the “big brother.”
Benjamin F. Fairless, president of U.S. Steel, stood up before the Celler committee and declared that his company “is successful, it is profitable, it is efficient and it is a large enterprise. These are the simple facts and I am proud of them.” He vehemently denied that his company interferes with free competition: “The fact is that when U.S. Steel was created in 1901, it produced 66 per cent of all the steel then made in America – twice as much as all of its competitors put together. Today it products only 33 per cent of the nation’s steel, and its competitors turn out twice as much as it does.”
However, Fairless shrewdly omitted to say that he listed among his competitors the other five large steel outfits which with U.S. $teel own more than 70 per cent of the nation’s steel-making capacity. Thus U.S. Steel is the most important section of what Representative Celler calls the oligopoly, probably having one of those invisible “private managerial systems” mentioned by Senator O’Mahoney, which results in control of so much of the economic life of the country.
Fairless was by no means on the defensive in his attitude. He lashed out against those people intent on “dismembering business” as “the most dangerous reactionaries of the twentieth century.” He said: “By dismembering business, they would turn back the clock to the horseless buggy days of fifty years or more ago and would try to squeeze a modern, dynamic, efficient America once more into the puny production patterns of industrial childhood.”
It is not often that a socialist finds himself even in partial agree-men with a big industrialist, but Fairless seems right about turning back the clock of industrial development. However. objectively speaking, time has also run out on the big industrialist, who should be replaced by democratic socialization of industry.
The New York Times, entering the controversy editorially, points out that all industry, hot just steel, is on trial. In support of industry, it quotes to the effect that in 1914 a worker would have had to work 96 hours a week in order to buy the “same amount ahd kind of goods, services and luxuries which are standard today." Then the editor asks: “Was this monumental advance in living standards achieved in spite of, or because of, the great size of our big industrial units? It would not be accurate to say that there is no argument on that point. But the one hard fact that Mr. Celler and his colleagues will find it difficult to wish away is that this was precisely the kind of industrial organization under which these revolutionary changes were recorded.”
There is no disputing that mass production has raised the standard of living, that mass production is big business, that the Cellers, O’Mahoneys and Trumans have no adequate answer in their books. The socialist who acknowledges the good in mass production, in efficient industrial concentration and combination, and who at the same time sees that the evil is in private ownership and private exploitation, offers the sane solution of democratic socialization.
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