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be argued that " in every modern industry " there is " an innate tend- ency to consolidation."
In answer to this question Professor Ely admits that in the field of natural monopolies competition is impossible, but contends that else- where the case is different. He believes, and rightly, that production on a large scale, or concentration, is a different thing from monopoly (pp. 143, 144). A first reason for this belief is that, outside the field of natural monopolies, the point of " maximum efficiency of plant " is reached sooner or later, and that " new fixed charges emerge as business grows " beyond this point. While the wastes of competition may sometimes be avoided, its advantages are lost also ; and business becomes " listless, content to follow in the old ways, indifferent to small economies." In the second place, an examination of the published lists of trusts shows that many of these combinations do not enjoy a monopoly and that others are natural monopolies (pp. 168-74). Thirdly, many of the monopolies that now exist in the manufacturing industry owe their power to favors received from natural monopolies and to other illegitimate advantages, so that it cannot be said that they are due exclusively to economies arising from monopolized production (pp. 17076). These facts weaken the argument from the alleged tendency to monopoly in all fields of industry. Finally, the author argues that the " causes of competition are found in human nature and in the laws of the external physical universe," so that we may believe competition to be a permanent economic force (pp. 178, 179). There- fore he concludes : " So far as we now see, we have a large field belong- ing to monopoly ; but outside of this field we have another in which, under right conditions, competition is a permanent social force. Furthermore, we place the burden of proof upon those who claim that competition in industry is self-annihilating and invariably makes way for monopoly."
The next chapter, on the concentration of production, reviews the available facts, and recognizes an unmistakable tendency toward pro- duction on a large scale (pp. 180-89). But the author presents also a considerable body of facts that show that all the advantage is not univer- sally upon the side of giant enterprises (pp. 190-94, 197-201). In this connection he refutes the arguments of Mr. Wells concerning the tendency to concentration in agriculture. He also shows that stock speculation has been an important factor in producing the industrial combinations of recent years (pp. 214-16). In so far as concentration takes place " without any special favors," Professor Ely considers it a
