The Theory of Social Revolutions | Page 6

companies by the sovereign. We have seen the East

India Company absorbed by the British Parliament; we have seen the
railways, and the telephone and the telegraph companies, taken into
possession, very generally, by the most progressive governments of the
world; and now we have come to the necessity of dealing with the
domestic-trade monopoly, because trade has fallen into monopoly
through the centralization of capital in a constantly contracting circle of
ownership.
Among innumerable kinds of monopolies none have been more
troublesome than trade monopolies, especially those which control the
price of the necessaries of life; for, so far as I know, no people,
approximately free, have long endured such monopolies patiently. Nor
could they well have done so without constraint by overpowering
physical force, for the possession of a monopoly of a necessary of life
by an individual, or by a small privileged class, is tantamount to
investing a minority, contemptible alike in numbers and in physical
force, with an arbitrary and unlimited power to tax the majority, not for
public, but for private purposes. Therefore it has not infrequently
happened that persistence in adhering to and in enforcing such
monopolies has led, first, to attempts at regulation, and, these failing, to
confiscation, and sometimes to the proscription of the owners. An
example of such a phenomenon occurs to me which, just now, seems
apposite.
In the earlier Middle Ages, before gunpowder made fortified houses
untenable when attacked by the sovereign, the highways were so
dangerous that trade and manufactures could only survive in walled
towns. An unarmed urban population had to buy its privileges, and to
pay for these a syndicate grew up in each town, which became
responsible for the town ferm, or tax, and, in return, collected what part
of the municipal expenses it could from the poorer inhabitants. These
syndicates, called guilds, as a means of raising money, regulated trade
and fixed prices, and they succeeded in fixing prices because they
could prevent competition within the walls. Presently complaints
became rife of guild oppression, and the courts had to entertain these
complaints from the outset, to keep some semblance of order; but at
length the turmoil passed beyond the reach of the courts, and

Parliament intervened. Parliament not only enacted a series of statutes
regulating prices in towns, but supervised guild membership, requiring
trading companies to receive new members upon what Parliament
considered to be reasonable terms. Nevertheless, friction continued.
With advances in science, artillery improved, and, as artillery improved,
the police strengthened until the king could arrest whom he pleased.
Then the country grew safe and manufactures migrated from the walled
and heavily taxed towns to the cheap, open villages, and from thence
undersold the guilds. As the area of competition broadened, so the
guilds weakened, until, under Edward VI, being no longer able to
defend themselves, they were ruthlessly and savagely plundered; and
fifty years later the Court of King's Bench gravely held that a royal
grant of a monopoly had always been bad at common law.[4]
Though the Court's law proved to be good, since it has stood, its history
was fantastic; for the trade-guild was the offspring of trade monopoly,
and a trade monopoly had for centuries been granted habitually by the
feudal landlord to his tenants, and indeed was the only means by which
an urban population could finance its military expenditure. Then, in due
course, the Crown tried to establish its exclusive right to grant
monopolies, and finally Parliament--or King, Lords, and Commons
combined, being the whole nation in its corporate capacity,
--appropriated this monopoly of monopolies as its supreme prerogative.
And with Parliament this monopoly has ever since remained.
In fine, monopolies, or competition in trade, appear to be recurrent
social phases which depend upon the ratio which the mass and the
fluidity of capital, or, in other words, its energy, bears to the area
within which competition is possible. In the Middle Ages, when the
town walls bounded that area, or when, at most, it was restricted to a
few lines of communication between defensible points garrisoned by
the monopolists,--as were the Staple towns of England which carried
on the wool trade with the British fortified counting-houses in
Flanders,--a small quantity of sluggish capital sufficed. But as police
improved, and the area of competition broadened faster than capital
accumulated and quickened, the competitive phase dawned, whose

advent is marked by Darcy v. Allein, decided in the year 1600. Finally,
the issue between monopoly and free trade was fought out in the
American Revolution, for the measure which precipitated hostilities
was the effort of England to impose her monopoly of the Eastern trade
upon America. The Boston Tea Party occurred on December 16, 1773.
Then came the heyday of competition with the acceptance of the
theories of Adam Smith, and