In the Wilson administration when the world war had caused prices to skyrocket, the number of lawyers engaged in this work rose to eighteen. In the 1920's when corporate mergers proceeded at a fantastic pace, the number of lawyers engaged in antitrust enforcement did not exceed twenty-five. Not until 1938 were as many as fifty lawyers actually employed in this work and not until 1939 did the professional personnel reach two hundred lawyers and a half dozen economists. For almost its whole life, the Antitrust Division has been a kind of a corporal's guard.
About ten years ago there occurred something of an awakening as to significance of the economic concentration that was occurring. The hearings of the Temporary National Economic Committee focused the problem. The Department of Justice adopted a more active policy. Congress appropriated larger funds, and for the first time in history an effort at broad enforcement was made. More antitrust suits have been brought by the Federal government since 1938 than in the entire preceding fortyeight years of antitrust history. The war necessarily retarded the momentum of the new policy and hampered its effectiveness. Yet during the last ten years there has been an increasing awareness of the fact that competition has been rapidly disappearing in many American industries.
But even so, I do not think that the American people or the Congress has been sufficiently aroused of the danger that this growing concentration of economic power presents to capitalism and democracy. The capitalistic system and democratic government developed together and in the long run they can exist only together. The historical development of this truth is interesting, but there is not time to sketch it now except to point out that throughout history wherever despotism has existed the economic life of the people has been organized along noncapitalistic lines. Political freedom has only existed for any length of time in countries having capitalistic economic systems. Webster defines capitalism as: An economic system in which the production and distribution of wealth, the employment and reward of human labor, and the extension, organization and operation of the system itself are entrusted to and effected by private enterprise and control under competitive conditions.
The alternative to this kind of system is an authoritarian economic system. The evolution of such a system would probably come about, first, by increasing private controls over production, prices, wages, and all other phases of distribution. These controls would gradually be superseded by government controls, as popular demand would require that the government take over. If we are going to have a controlled system, in the
long run the people would not stand for private control. Control would ultimately be exercised by the government itself taking over the regulation of monopolies, resulting in complete government control of the economic life of the people.
I think that no demonstration is needed . . . that we cannot have an authoritarian economic system without authoritarian government, and the civil and political liberties ultimately vanish when the government assumes direction of all industry.
I do, however, want to say parenthetically at this point that I recognize the necessity of temporary government controls in periods of emergency. When a war, or other economic crisis, is thrust upon us resulting in an extraordinary demand which taxes the productive output of our resources, government controls are necessary to insure equitable distribution and distribution that promotes the national economic policy. The unusual demands of war production necessitate direction of industrial output and that direction, of course, must come from the government. Similar temporary government controls may be necessary from time to time in crises short of war, such as the great industrial depression of the early 1930's, or the unusual demands of a recovery program, such as the European Recovery Program. Where these governmental programs are sitated by temporary crisis and not by a monopoly condition, the American people have demonstrated time and again their capacity to submit temporarily to such controls and to remove them when the crisis has passed. This we have proved can be done without any sacrifice of basic civil or political liberties. Nothing that I say today is to be construed as opposition to such emergency measures as may from time to time be required.
But that is quite a different thing from the permanent controls that we would ultimately be forced to adopt if the insidious growth of concentration and monopoly should undermine the vitality of a free enterprise system. If we accept the proposition, which I believe has been amply demonstrated, that capitalism in the long run cannot survive except under conditions of free competitive enterprise, then it follows that as that enterprise is progressively eliminated from our system regimentation of business progressively takes over. That regimentation, as I have already stated, may at first be private regimentation, but ultimately it would become government regimentation.