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Published online by Cambridge University Press: 07 November 2014
In this paper only two aspects of the problem are explored: first, the case for anti-trust; and second, the adequacy of the existing legislation. Other aspects of great importance are neglected. Three which call for serious discussion in the near future are: the criteria for judging the behaviour of monopolists, as a basis for regulation in cases where monopoly is deemed desirable or inevitable; the problems presented by the widespread development of international cartel agreements especially in relation to government negotiations for freeing international trade; the difficult problems of eliminating the abuse of patent rights as an instrument of monopoly while retaining the advantages of the patent system. These last two aspects have received much attention in the United States, and Canadians would be well advised to study the findings of the Bone Committee on Patents1 and the Kilgore Committee on Scientific and Technical Mobilization.
One other limitation should be stated: this paper, like most discussions of post-war problems, is based on the assumption that there will be a return to something like the pre-war system of capitalist free enterprise. Though the degree of government interference with the system proposed by even the most conservative groups would constitute a considerable advance from the pre-war status, this assumption appears not unreasonable for Canada in the calculable future (no long period, in my view). The importance of the matters discussed depends on the correctness of this assumption; but the making of the assumption implies no preference, one way or the other, as between possible economic systems.
1 Hearings before this Committee on Patents, United States Senate, 77th Congress, second session, 1942.
2 Hearings before a subcommittee of the Committee on Military Affairs, United States Senate, 78th Congress, first session, 1943. A useful, if somewhat over-dramatized and one-sided, summary of these findings will be found in Borkin, J. and Welsh, C. A., Germany's Master Plan (New York, 1943).Google Scholar Special mention should be made of the valuable memorandum, Economic and Political Aspects of International Cartels, presented to the Kilgore Committee by Corwin D. Edwards, and printed as a monograph, 78th Congress, 2nd session, Senate Committee Print, Monograph I, 1944.
3 London, 1942.
5 See Ellis, H. S. in American Economic Review, 03, Supplement, 1940 Google Scholar: “We discover the very core of stagnation in rigid prices, monopoly restriction of output, inequality in the distribution of income, difficulties in changing the direction of production, including adaptation to certain new, more ‘social” wants” (p. 31).
6 Harvard Studies in Monopoly and Competition, No. 3, Cambridge, Mass., 1941. See Staley, Eugene, World Economic Development (I.L.O., Montreal, 1944)Google Scholar, for further discussion of the need for “industrial adaptability” in the post-war world.
7 London, 1935.
8 New York, 1942.
9 For a telling criticism of Professor Schumpeter's thesis, see the review article by Hildebrand, G. H. Jr., in the American Economic Review, 09, 1943 Google Scholar, “Monopolization and the Decline of Investment Opportunity.”
10 See Bottlenecks of Business (New York, 1940).Google Scholar
11 Professor Donald Wallace in his Market Control in the Aluminum Industry discussed the probability of the optimum investment and the optimum output being more nearly achieved under oligopoly than under monopoly. He considers there is some good reason for believing that the monopolist will follow a more restrictive output than a group of strong oligopolists. A fortiori, where the number of firms is large restriction may be expected to be much less.
12 T.N.E.C. Monograph, no. 16 (Washington, 1940).Google Scholar
13 April 5, 1941.
14 T.N.E.C. Monograph, no. 38 (Washington, 1941).Google Scholar