Skip to Content

The Waste of Competition

 [From "The Industrial Revolution," by Charles Beard, preface to second edition.]

      While admitting that our present maladjustments are the outcome of the “social form of production and the individual form of appropriation and exchange,” I contend that this system wastes more wealth than it contributes to landlords, capitalists and moneylenders. The statistics are not at present forthcoming to prove this statement, but a few figures will illustrate my point.
        Mr. Edson Bradey, vice-president of the Distillery Company of America, recently estimated that between producer and consumer 40,000,000 dollars were annually lost mostly in competitive attempts to secure trade. Upon the combination of the competitors of the distilling business 300 travelling salesmen were discharged, and a saving of 1,000,000 dollars effected in this one department of enterprise. The American Wire and Steel Company, formed of competing concerns, dismissed 200 salesmen who bad been engaged in “ heckling” customers. It is stated that 3,000 salesmen lost their positions through the formation of the American Tobacco Co., and that the Continental Tobacco Co. discharged 330 travellers in one day.

The (I'JOO) Report of the American Travellers’ Protective Association stated that probably 350,000 travelling men had lost their positions through the workings of monopolies and trusts, and estimated that the latter saved 6,000,000 dollars daily by limiting advertising and concentrating industries.

      The recent American Combination of Laundry Machine-makers discharged 30 per cent. of the employees as unnecessary to the production of all the machines demanded in the market, and effected a saving of 780,000 dollars annually in working expenses. Mr. Gates of the Wire and Steel Co. stated that his concern saved 500,000 dollars yearly in “cross freights" through combination and organisation of shipping. A prominent railway manager in the United States estimates that 200,000,000 dollars would be saved annually if all railways were worked from one centre. Professor Ely says :
      “It is useless to attempt any precise estimate, but it may not be an extravagant estimate if we claim that the loss due to competition in the railway business in the United States from the beginning of our railway history to the present time has been sufficient to furnish all the people of the United States with comfortable dwellings, provided all the houses now in the United States should be destroyed." To read this statement with the recent “Report on Tenement conditions in Chicago" is enough to rouse the most indifferent. The annual waste on railways, advertising and telegraphs in the United States is estimated at 698,000,000 dollare while the waste on separate railway management in England is set at £30,000,000 yearly.
       It is calculated that there are in London two and a half times as many shops as are necessary for convenient and efficient distribution.

       Business men struggling with one another waste an enormous amount of wealth, and capitalists and workmen fighting each other waste a great deal in addition. For example, in 1897-98 25,636,000 working days were lost through labour disputes arising out of the inevitable antagonism existing in the modern industrial system.