IV. The Passing of Competition and Rise of Monopoly  

There was a time when avowed defenders of capitalism rested their principle charge against Socialism on the plea that capitalism means free competition of independent undertakings and that Socialism would fail because it involves the ending of that competition.

Even as late as 1927 the late Lord Melchett (then Sir Alfred Mond), head of the great combine Imperial Chemical Industries, Ltd., devoted space in his book Industry and Politics (MacMillan, 1927), in the chapter “Why Socialism Must Fail”, to the benefits of competition. He claimed that “captains of industry” are produced by competition and he wondered “what is to happen when these men disappear, as they must do in time? What is the machinery which is to create the new captains required to direct industry and commerce?”

“Competition,” he wrote, “is the breath and soul of human endeavour, whether in business, in sport, in politics, or in any other form of human activity. It is nature’s way of proving who is the best man.”

Sir Alfred Mond wrote his book just after the formation of the combine of which he was head, a combine designed, of course, to eliminate competition between the component companies, though at the same time it was obviously also aimed at meeting the competition of foreign concerns. The Manchester Guardian Commercial, writing at the time I.C.I. Was formed, had this to say :–

“We may take it for granted at the outset that the object of the promoters is less to consolidate the chemical industry into a better dividend-earning machine than to build up a more easily managed organisation for the purpose of meting foreign competition, itself very closely organised. Naturally, any success obtained in this direction will be reflected in the profits, but a mere profit-seeking policy alone has not hitherto led to gigantic grouping of this character. There will now be a concern which will be more capable of talking on equal terms with I.G. Farbenindustrie A.G. of Germany and the two combines in the United States, Du Pont’s and the Allied Chemical Industry” (M. G. Commercial, 28 October, 1926). Even then, though he proclaimed that competition is so beneficial Sir Alfred Mond was an advocate of reaching agreement with the foreign combines – in other words, of eliminating competition, as far as possible, abroad as well as at home. The Manchester Guardian Commercial anticipated that “in view of Sir Alfred Mond’s persistent advocacy of international co-operation it will not be surprising if an effort is made to arrive at some agreement with the German trust granting an exchange of patents and experience with the British and delimiting markets to satisfy the German demand.”

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