The Capitalists’ Organisation

Hand in hand with the enormous growth of industry a transformation in its interior structure has taken place during the last twenty years.

In all branches of industry, the aspiration of the capitalists is to suppress competition between them, and to free themselves from the determination of good prices by the market by founding monopolistic associations which determine prices. The results of these efforts are cartels, syndicates and trusts.

As soon as such a monopoly is created in a branch of industry and competition is suppressed, the price of goods diverges from the cost price. Instead of price competition there is now a monopoly price.

A fall in costs no longer lowers prices; it only increases the profits of the capitalists.

Doubtless, the rise in dividends in all branches of industry which have been trustified may bring new capital to this branch and therefore either through the entry of new firms, or through an increase in the capacity of the trust’s factories, force a price reduction on them.

But such reversals are increasingly prevented. Partly through the might of the big banks, which deny credit, preventing the foundation of new factories and, besides, compel all enterprises under their control, even against the will of their proprietors, to join the trusts; and partly through the different methods of compulsion, used by the trusts and cartels in the struggle against independent owners in the industry.

Where capital’s freedom and the freedom of competition can be checked in this way the prices of the cartel or trust’s goods are independent of the cost price.

Cartels and trusts succeed first there where the monopolisation of the market finds a support through the monopolisation of natural resources. The Standard Oil Co. and the U.S. Steel Company in America, the Rhenish-Westphalian Coal Syndicate, the German Steel Works Association, the Longwy Comptoir, the Austrian Iron Cartel, all of them are based on the monopolisation by capital of the natural resources. The price rise of raw materials caused by these private monopolies lowers the dividends in the branch of industries using these materials. This compels the owners of these industries to raise their prices too by founding cartels or trusts.

This trend has till now, generally been limited to industries which produce either raw materials or semi-finished goods. The formation of monopolies in finished goods industries has seldom been successful. In spite of that the prices of these goods have also been raised, in order to impose, at least partly, raw material price increases on consumers.

The technical development of the last two decades has increased the productivity of labour and has lowered industry’s costs.

In spite of that the price of goods has generally risen. This is caused by the fact that lowering production prices in industries which use raw materials is more than compensated by the high prices of the raw materials themselves, due partly to the disproportion between industrial and agricultural industry, and partly through the move from competitive prices to monopoly ones. The high cost of living is therefore on the hand, the consequence of competition between various spheres of production – more especially between industry and agriculture – for capital and labour, and on the other hand is caused by the suppression of competition within some branches of industry. It is also a consequence of the anarchy of the capitalist mode of production, and of the effect of the organisation of capitalist corporations.

In the already trustified branches of industry production is now socialised. The means of production and labour are methodically directed from one centre. But this socialisation has not been produced by society and for society, but by capital and at the expense of society. This capitalist socialisation is one of the reasons for the high cost of living. What should now happen is the transfer of the means of production – which have been socialised by capital – to society itself, to become its property. ‘The nation instead of the trusts’, is the task imposed on the working class by the high cost of living.