combine. The corporation is an organization of individuals who put their capital together in order to carry on a business which requires more capital than is likely to be possessed by any one of them. The trust, or combine, is mainly an organization of corporations (though it may also include a few individual capitalists), for the purpose of controlling the market. While such organizations are to be distinguished sharply from corporations as such, nevertheless they could scarcely have come into existence if the corporation had not preceded them and prepared the way. They may therefore be called extreme developments of the corporation idea, though not necessary developments. As to these extreme developments of the corporation principle, it is becoming more and more apparent that their power for evil lies wholly in their power of controlling and manipulating prices. If that power could be taken out of their hands, we should then have nothing to fear from them.

Control of prices. If they could not succeed and survive in competition through their power over prices, they could then succeed only through their power of production. If they should then survive, the mere fact of their survival would prove their fitness to survive. This has been pointed out many times by scholars; but the practical politicians, with their unerring instinct for the wrong way, have ignored it and have been trying various hard and useless methods of dealing with the problem. Eventually, after having tried every possible way of going wrong, we shall apply the simple and direct remedy of government control of prices wherever a monopoly exists.

It is not necessary to indulge in any sentimental rhapsodies on the subject of the people and their control over affairs of this kind. Government affairs are controlled by politicians, and politicians are no more interested in the people than are the trust magnates themselves. The choice is a hard one. But where competition fails to regulate prices, these prices are going to be fixed arbitrarily by someone. In the absence of government control they are fixed by the trust operators

alone. Where there is government control, they are fixed by the joint action of the politicians and the trust operators. Their interests are not the same, and, as the result of their pulling and hauling, prices will not be fixed quite so completely in the interest of the trusts, but more in the interest of the trusts and the politicians. Since the people can control the trusts after a fashion by refusing to buy of them, and the politicians after a fashion by refusing to vote for them, it will happen that through this double control the interests of the people will be somewhat better safeguarded than they are now.

Incidentally this would destroy most of the trusts. No trust exists by virtue of its superior productive powers. Every one depends for its existence upon its superiority in buying or selling; that is, upon its power over prices. Take away this power and enable the outside concerns to match their productivity against that of the trust, and outside competition will increase and force the trust to break up into its most efficient productive units, as distinguished from the most efficient bargaining units. The coöperative society. It has often been proposed to substitute a radically different form of business organization for the corporation, or joint-stock company. This is known as the coöperative society. In a sense the corporation itself is coöperative, but it differs from the coöperative society in two fundamental characters:

In the first place, the corporation involves coöperation among the owners, whereas the coöperative society involves coöperation among the workers. In the chapter on Capital we saw that the rise of modern industrial conditions had brought about a sharp separation of owners and workers. In the original form of manufacturing (that is, the small shop, where the workman owned the shop and the tools) we had the function of ownership and of labor combined in the same individual. With the rise of the factory system these two functions were separated. The corporation represents the organization of owners, and maintains the separation of owners

from workers. The coöperative society, on the other hand, represents an association of workers. Under the corporation, ownership and management go together; under the coöperative society, labor and management go together.

In the second place, in a corporation, as we have seen, the various individuals who contribute capital vote in proportion to the number of shares which they own. In a coöperative society each individual has one vote, regardless of the number of shares which he owns or the amount of capital which he has put in. One man, one vote is the rule here, whereas one share, one vote is the rule of the corporation. It is inaccurate, however, to say that capital votes in a corporation. Only men vote, and a man may vote once for each share which he owns, or he may vote once and once only, regardless of the number of his shares. As to the comparative merits of these two forms of organization, the opinion of the world is somewhat divided. It must be admitted that the corporation has had much the larger growth, though in recent years the coöperative society has been gaining ground rapidly.

Comparative merits of the corporation and the coöperative society. It is the opinion of the present writer that the question will always be decided on rather definite economic grounds. Where the difficult problem is that of getting sufficient capital, he who supplies the capital must be placated; that is to say, where everything else is easily obtainable, where there are always plenty of laborers seeking employment, plenty of raw material to be had, and buyers ready to buy the finished product, but where the limiting factor is capital and the puzzling thing is to know where to get capital, favorable terms must be offered to the capitalist and he must be allowed to have his way, or the capital cannot be secured. In the early stages of manufacturing expansion, capital was the limiting factor. The limiting factor will dominate. arise under which capital is not the

Now and then conditions limiting factor. Among

farmers, for example, where a creamery is needed, it is never

very difficult to raise capital enough to equip the creamery ; the difficulty is to get business; that is, to get the farmers to produce the milk and sell the cream to the creamery. In these cases the producer of milk must be placated and persuaded to join the organization. He must therefore be given control. This gives rise to what is known as the coöperative creamery, in which the producing farmers own the plant, direct its management, and share in its profits. Such a creamery, however, is coöperative only in a special sense. The men who work in the creamery are employed as other laborers would be employed in a privately owned factory of any kind. A coöperative store is likewise dependent upon custom. It is easier to get capital and to hire clerks and salesmen than it is to induce people to trade at the store. Therefore the patrons of the store must be placated and given control. The great coöperative societies, as pointed out in the chapter on Competition, have been societies where coöperative buying and selling was substituted for competitive buying and selling. That is, they have been mercantile societies. They do not represent coöperation among producers or among the workers in the stores and factories, for the workers in the stores and factories are hired on the same terms as workers in the privately owned or corporation owned stores and factories.

There are a few cases of real coöperation, but they are not very conspicuous. The only real coöperation is coöperation among workers, where the men who do the work in a factory manage it themselves or direct its management and furnish or hire the capital. This form of coöperation has not yet proved very successful, mainly because labor has seldom been the limiting factor. It is generally so easy to get labor that the laborer does not have to be placated and given much control. When the time comes, as it probably will, when labor is scarce and hard to find, — when it is necessary to placate the laborer rather than the capitalist or the purchaser of finished products, — then we may expect that this form of coöperation

will gain ground. If the laborer has to be placated in order to induce him to work in an establishment, he will be given more and more control over it.

Control by the indispensable person. Generally speaking, the indispensable man, whether he be the one who furnishes capital, the one who furnishes raw material (as in the case of the coöperative creamery), the one who buys the finished product (as in the case of the coöperative store), or the one who supplies the labor (as in the case of the true coöperative society), is in so strong a position that he can dictate terms to all the others. When the laborer becomes so indispensable, that is, so scarce and hard to find that the average business enterprise must wait on his will, he will be in so strong a position that he can dictate terms to all the others who participate in the enterprise. He will then, without resort to force, really direct its management on a purely voluntary and contractual basis. There is not a very good prospect for coöperation among laborers under any other conditions. There is a strong probability that, with the rapid accumulation of capital (especially if habits of frugality and saving are encouraged) and with the growing scarcity of labor (especially if wise immigration laws are passed and a high standard of living among laborers is encouraged), there will come a time when capital will be almost superfluous because of its great abundance, and every individual laborer will become almost indispensable because of the scarcity of labor. Then we must expect that capital will lose the power to direct the management of industries and will take the position of a hireling. The laborer will then gain control and assume the position of the master.