Combinations in Restraint of Trade
JUNE 01, 1969 by PAUL L. POIROT
If one could poll all past and present economists, perhaps the point upon which they’d most nearly agree is that combinations in restraint of trade are economically unsound. Not even Karl Marx would have defended a monopoly or cartel.
Unfortunately, there is no depth to such convictions; the agreement on the matter is strictly superficial. "Workers of the world unite," thundered Marx; and combinations in restraint of trade have constituted the core of social reform from that day to this.
Trade is the lifeblood of civilized society. This is not to suggest a social organism to which the individual human being must bow and scrape, but an operating method that allows each peaceful person to choose and act freely. The free market, in other words, is a means for social cooperation, association for mutual gain. Its functioning depends not upon our being perfect or all-wise or selfless or equal but upon our being human—not upon our similarities but upon our differences—not upon what we own or hold in common but upon our independent likes and dislikes and that which each can identify and claim as his own private property.
It is neither necessary nor desirable that there be equality in the possession of things, though certain emergency situations may give rise to such rationing—a band of pilgrims stranded on a rock in the dead of winter; survivors on a raft in a hostile sea; a faithful few standing by for the coming of a New Jerusalem—or a higher stage of socialism.
Whatever one’s conclusion about the efficacy of such emergency rationing for purposes of survival, the historical record affords no comfort to the advocates of collectivism as a continuing way of life. That "wave of the future" is a failure. It plugs every avenue to progress and leads only to the dead level of mediocrity. No individual is permitted to gain or lose, succeed or fail—as though evolution could occur without birth and death.
Keynes was under no illusion as to the consequences of the intervention he advocated. "In the long run," he said, "we are all dead." Forced equalization as a method for survival in the short run leaves man without means or purpose for the long run. No one bothers to specialize or save or attend to the processes of continuing production—unless he is allowed to retain and enjoy the fruits of such effort. Compulsory collectivism is indeed a conspiracy, a combination in restraint of trade.
Destroy the Machinery
We smile knowingly, and sadly, at the reports of the destruction of machinery by workers in the textile mills in the early stages of the industrial revolution. They thought their jobs and means of livelihood were being threatened by the new spinning jennies and looms. Today we know very well the futility of trying to earn a living spinning thread by hand or trying to weave without the latest power loom equipment. We know how shortsighted were the early factory workers with their silly combinations in restraint of trade. The very idea of breaking up the machinery that would enable them to produce more efficiently!
Or do we only pretend to understand what they did not, while persisting in their foolish ways to destroy the property and disrupt the trade upon which our own lives depend?
Is a twentieth-century strike by workers in any particular industry any less a combination in restraint of trade than was the destructive action of their unenlightened forebears in the textile mills a century or two earlier? What else is an employee strike than a concerted action to immobilize and render ineffective the capital and tools of their trade and the managerial talent developed and accumulated over the ages?
Are twentieth-century rioters in our cities any less destructive of life and property than were their eighteenth-century counterparts among the rabble of Paris? Are modern tariffs, boycotts, embargoes, and controls over prices, wages, and rents any less disruptive of trade than were similar combinations in restraint of trade in previous centuries?
Are the youths of all ages who lead and follow in today’s student revolts against the cumulative wisdom and traditions of civilization less detrimental to human progress than were the Huns and Vandals who sacked and burned ancient Rome? Was there ever a more disruptive combination in restraint of education than the striking United Federation of Teachers in New York City?
How may future historians describe our Age of Inflation other than an international conspiracy in restraint of trade, a gigantic counterfeiting operation designed to transfer savings by stealth from private ownership and control to public disposition and wasteful consumption?
At a time when human life throughout the world is more dependent upon the blessings of specialization and trade than ever before, we seem to have hit an all-time high in various combinations in restraint of trade—as though determined to destroy ourselves in the process of plundering others.
How does one counteract a combination in restraint of trade—or violence in any form, for that matter? In the first place, and to the extent that he has a choice, he can withdraw his support of such harmful actions. This may be as simple a matter as clearing his mind of illusions about the nature of people and things, visualizing the numerous peaceful alternatives to this or that outbreak of violence, and putting his trust in one of those alternatives.
There is no point in charging a picket line for the pleasure of knocking heads with those who have no other objective. But one may peacefully withdraw his support of picketing and other forms of violence. He need not profess in public to be in favor of a right to strike; the alternative is to uphold the right to work, to serve oneself by serving others. One’s right to work for an employer who provides the tools and manages the enterprise and markets the product includes permission to vacate that job if the wage is unsatisfactory; but it does not entitle the employee who quits to destroy the tools and plant and sales organization and other assets of the business when he leaves it. Nor does it entitle him to draw automatically upon taxpayers to cover the wages lost by not working.
The Guaranteed Life Brings Stagnation
Imagine, if you can, a business enterprise operated on the principle of a guaranteed position in the market, a guaranteed cost-free supply of capital and raw materials, a guaranteed steady stream of customers using ration coupons but otherwise obliged to pay nothing for any product or service, a guaranteed annual wage to every employee, with full tenure and seniority provisions and a right to strike indefinitely with unemployment compensation for the duration.
What you have just tried to imagine are the terms and conditions of a full-fledged welfare state, otherwise known as socialism, with you as the guarantor, otherwise known as the taxpayer.
Scarcely anyone can stretch his imagination enough to accept socialism when carried to its ultimate logical conclusion. Yet, there are many who imagine that one of these terms or conditions can be imposed—one step taken—without leading inevitably to the next, and the next, and the same eventual dead end. Every strike action condoned, every picket line respected, every special privilege allowed one person or group at the expense of others against their wishes, every act of coercion against peaceful members of society is destructive of that society and leads to its disintegration. Unless the life of the peaceful person and his property are respected and defended, he cannot be counted upon as either a supplier of, or paying customer for, goods and services; the advantages of specialization and trade will be forfeited, the stage set for the four horsemen of the Apocalypse: war, strife, famine, and pestilence.
If one seriously proposes to do something about a social condition he deplores—let us say, for instance, the fact that not everyone can afford everything his heart desires—then it behooves him to advocate a cure that does not aggravate and accentuate that very problem. It is not helpful to bolster and strengthen the demand for a scarce resource in ways that discourage the production or otherwise diminish available supplies of that scarce resource. If lack of trade is the problem, then combinations in restraint of trade cannot be a right answer. The alternative is a combination in promotion of trade, and the process is through efficient and profitable production of goods and services. He who supplies in the market those things others most want, as evidenced by their willingness to buy, not only serves them. He thereby conserves scarce resources in the only meaningful sense of the term by turning those resources to their most economical use. And whether or not it was his intention, he best serves himself in the process, improving his prospects to fulfill whatever purpose he has in mind for his own life. That kind of social cooperation or combination in promotion of trade is practically all that anyone can do to win the respect and support and good will of his fellow men.