Regulated Monopoly versus Enforced Competition

• Date: 01 January 1930
• DOI: 10.1177/000271623014700120
• Author: Frederick F. Blachly,Miriam E. Oatman
• Published date: 01 January 1930
• Subject Matter: Articles

150

Regulated

Monopoly

versus

Enforced

Competition

The

German

Experiment

By

FREDERICK

F.

BLACHLY

and

MIRIAM

E.

OATMAN

Institute

for

Government

Research,

Brookings

Institution,

Washington,

District

of

Columbia

T HE

method

of

dealing

with

trusts

and

combines

which

has

been

adopted

by

Germany

aff ords

a

striking

contrast

to

the

method

employed

in

the

United

States.

Our

assumption

that

monopoly

is

evil

in

itself,

and

that

&dquo;trust-busting&dquo;

is

consequently

a

cru-

sade

for

social

and

economic

righteous-

ness,

is

not

shared

in

Germany.

Her

laws

and

ordinances

express

very

clearly

a

quite

different

doctrine,

namely,

that

the

evil

so

often

asso-

ciated

with

trusts

lies

not

in

monopoly

or

large

organization

per

se,

but

in

the

use

of

great

economic

power

to

secure

private

advantage

at

the

cost

of

public

welfare.

Not

&dquo;anti-trust

laws,&dquo;

there-

fore,

are

found

in

her

statute

books,

but

laws

controlling

and

regulating

trusts,

monopolies

and

cartels,

with

a

view

to

making

them

serve

the

general

good.

It

is

true

that

the

German

Reich

has

a

much

freer

hand

in

such

matters

than

has

the

United

States.

The

Con-

stitution

of

1919

gives

to

the

Reich

legislative

power

over

the

production,

manufacture,

distribution

and

price

regulation

of

economic

goods

for

the

general

economy,

commerce,

the

bank-

ing

system,

the

exchange

system,

traffic

in

foodstuffs

and

luxuries,

as

well

as

objects

of

everyday

necessity,

industry,

mining,

insurance,

railways

and

main

highways.’

It

further

provides:

The

Reich

can

take

over

by

law

as

public

property,

without

prejudice

to

compensa-

tion

and

with

suitable

application

of

the

provisions

which

hold

for

expropriation,

private

economic

enterprises

suitable

for

socialization.

It

can

engage

itself,

the

states

or

the

communes

in

the

administra-

tion

of

economic

enterprises

and

associa-

tions,

or

it

may

secure

for

itself

in

other

ways

a

controlling

influence

upon

them.

In

case

of

urgent

need,

the

Reich

can

also

unite

by

law

economic

enterprises

and

as-

sociations

on

a

basis

of

self-administration,

for

socio-economic

purposes,

with

the

ob-

ject

of

securing

the

cooperation

of

all

pro-

ductive

elements

of

the

population,

of

giving

a

share

in

the

administration

to

em-

ployers

and

employees,

and

of

regulating

the

production,

manufacture,

distribution,

consumption,

price-fixing,

importation

and

exportation

of

economic

goods,

according

to

the

fundamental

principles

of

social

economy.2

It

is

obvious

that

with such

powers

the

Reich

is

in

a

position

to

control

or

handle

economic

enterprises

in

almost

any

way

that

seems

advisable,

under

a

given

set

of

circumstances.

The

question

at

once

arises:

What

have

been

its

most

important

problems

in

this

field

and

what

methods

has

it

employed

for their

solution?

This

paper

will

indicate

very

briefly

some

of

the

outstanding

problems

and

methods.3

THE

RAILWAYS

The

organization

of

the

national

railways

was

an

extremely

important

problem,

not

only

intrinsically,

but

1

Art. 7.

2

Art.

156.

3

For

fuller

discussion,

see

Blachly

and

Oat-

man,

The

Government

and

Administration

of

Germany,

ch.

XVI;

and

Quigley

and

Clark,

Republican

Germany,

Bk.

II.