Economics and Industry

• Author: W.W. Hewett
• DOI: 10.1177/000271625530000137
• Published date: 01 July 1955
• Date: 01 July 1955
• Subject Matter: Articles

145

tion ;

he

was

pleased

with

the

success

of

the

government

under

the

Constitution

of

1787.

He

was

a

strong

advocate

of

a

na-

tional

university

where

the

mingling

of

po-

tential

leaders

from

all

parts

of

the

coun-

try

would

lessen

the

danger

of

sectional-

ism ;

such

an

institution,

he

thought,

would

cause

fewer

young

Americans

to

go

abroad

for

study

and

exposure

to

political

ideas

unfriendly

to

republicanism.

He

was,

in

his

way,

deeply

religious.

He

was

inter-

ested

in

improving

farming

methods

and

was

a

correspondent

of

Arthur

Young,

the

famous

agricultural

reformer.

He

had

a

high

and

affentionate

regard

for

Lafayette.

His

strong

sense

of

family

loyalty

and

re-

sponsibility

is

attested

by

the

sound

advice

and

substantial

aid

that

he

frequently

gave

relatives

and

by

the

bequests

of

his

will.

We

are

indebted

to

the

editor for

mak-

ing

available

in

a

convenient

volume

this

representative

collection

of

Washington

Papers.

CECIL

JOHNSON

University

of

North

Carolina

ECONOMICS

AND

INDUSTRY

A.

D. H.

KAPLAN.

Big

Enterprise

in

a

Competitive

System.

Pp.

xii,

269.

Washington,

D.

C.:

The

Brookings

In-

stitution,

1954.

$4.00.

Are

the

presence

and

growth

of

big

busi-

ness

compatible

with

the

survival

of

the

competitive

system

of

American

capital-

ism ?

This

is

the

fundamental

issue

ex-

plored

by

Dr.

Kaplan

in

the

interesting

volume

under

review.

After

a

careful

and

extensive

study

of

the

structure

and

per-

formance

of

big

business,

the

author

con-

cludes

that

big

business

has

been

function-

ing

in

a

highly

dynamic,

market

determin-

ing

economy;

and

that

all

the

available

evidence

indicates

it

will

probably

continue

to

do

so.

A

high

degree

of

vigorous

com-

petitive

activity

has

been

retained.

The

giant

corporations

operate

in

a

competitive

environment

where

the

development

of

alternative

products,

the

use

of

new

substi-

tute

materials,

and

a

constantly

shifting

product-mix

are

responsible

for

continuous

adjustment

to

consumer

choice

patterns.

Even

in

the

area

of

pricing,

while

increas-

ing

stability

of

prices

for

short

periods

is

evident,

the

secular

reductions

in

the

prices

of

such

products

as

rayon,

dyestuffs,

tires,

gasoline,

and

the

new

&dquo;wonder

drugs&dquo;

show

a

strong

downward

pressure.

The

fear of

Berle

and

Means

in

1932

that

the

projected

growth

rates

of

200

giant

corporations

would,

by

1950,

result

in

their

control

of

half

the

total

national

wealth,

has

not

been

realized;

and

the

small

firm

has

continued

to

play

an

important

role

in

our

economy.

Dr.

Kaplan

begins

his

book

(Chapter

I)

with

one

of

the

finest

short

reviews

I

have

ever

read

of

the

growth

of

American

pub-

lic

opinion

and

public policy

towards

mo-

nopoly

and

big

business.

An

astonishing

amount

of

specific

detail

and

stimulating

interpretation

has

been

compressed

into

fifty-two

pages.

This

historic

survey

is

followed

by

an

interesting

chapter

on

the

&dquo;rationale&dquo;

of

competitive

enterprise-con-

cepts

of

free

competition,

free

enterprise,

free

markets,

imperfect

competition,

and

oligopoly.

Against

this

broad

background

a

series

of

chapters

develop

in

detail

the

growth

of

big

business

in

relation

to

in-

dustrial

concentration,

financial

concentra-

tion,

price

competition,

the

drives

of

com-

petition,

and

the

size

and

integration

of

firms.

An

excellent

summary

chapter

con-

cludes

the

volume.

All

data

is

presented

effectively,

but

the

study

is

not

intended

as

a

source

book

for

data

on

the

American

economy.

There

have

been

many

books

written

since

the

1920’s

calling

attention

to

the

dangers

inherent

in

the

rise

of

big

busi-

ness

and

concentration

in

industry.

Dr.

Kaplan,

while

clearly

aware

of

these

dan-

gers,

gives

a

lucid

analytical

picture

of the

other

side

of

the

issue.

He

emphasizes

the

necessity

for

a

more

realistic

and

workable

concept

of

competition.

The

classical

con-

cept

developed

in

an

era

of

small

business

and

relatively

simple

industrial

technology

is

not

a

very

satisfactory

tool

for

the

study

of

the

modern

dynamic

economy,

constantly

reoriented

by

innovations

in

methods

and

basic

materials

used.

Dr.

Kaplan

has

given

us

a

stimulating

volume.