It would always be to the advantage of the traders on one side (say the sellers) if some of their number would cease to produce, or would produce less, as this would raise the price that those remaining could get. Sometimes the rise of price through decreased production is so great that the total price of the whole supply is greater than the total price of the larger supply (and vice versa, in case of increased production). This is the paradox of value applying to a whole market and to the buyers' curve of composite demand, rather than to the indi vidual and to his valuation curve. For example, the total amount of money received by all the farmers of a country for a large crop of corn, wheat, tobacco, cotton, may be less than what would be received for a smaller crop. Abundance is good for the purchasers of farm products, but not always ad vantageous to the farmers as a class. This appears in the comparison of amount produced, price per unit, and value of the total crop, in successive years; for example, of cotton in the United States. This phenomenon appears frequently in the case of many kinds of products. To the sellers it is very disagreeable to get less for a large crop than for a smaller one, and it constitutes a motive for attempting to control the prices to their own advantage whenever they can.
§ 4. Nature of monopoly. Monopoly is derived from the Greek roots, monos (sole, only) and polein (to sell), whence the abstract noun monopolia (exclu sive power, or condition of sale). It originally meant the exclu sive legal right of selling some article in some market. The typical monopoly of later medi eval and early modern times was the power (or person or company granting it) granted in a patent by the sovereign. The name patent survives as the special name for the monop oly granted by law to an inventor. Patents and franchises of public corporations, such as street railways, etc., are the main modern forms of legal monopoly. The idea was extended in one direction to include the right to deal in some article, and has been extended in modern usage in another direction to • In nine changes that occurred (as compared with the preceding year) production and prices moved in opposite directions eight times, and in the other case (in 1910) price rose but little the same year that production increased a little. No doubt cotton prices would have been on a lower level the last few years (1909-1912) but for two fac tors: (1) The increasing scale of general prices due to gold produc tion, and (2) the increasing population and the corresponding need for more cotton.
In five of the nine changes the paradox of value appeared; three times (1904, 1908, and 1911) when production increased, and two times (1909 and 1911) when production declined; and in still another year (1905), this nearly occurred, for a crop smaller by 20 per cent had a total value only two-thirds of a per cent less than the year before.
mean economic power to become (within limits) the sole seller (or buyer) of an article, whether this power is derived from law or springs from the economic conditions. It is applied also to the group of persons, or to the business company or corporation, which has this power. Monopoly, therefore, is es sentially opposed to competition, but only within a group on one side of the market, not in the market as a whole. It sug gests always the limitation or absence of that rivalry within the group of buyers, or of sellers, respectively, which con stitutes competition.
§ 5. Monopoly not merely scarcity. Monopoly should not be used as synonymous with scarcity. Scarcity is the essen
tial condition of all value. The simplest things—bricks, sand, the commonest unskilled labor—would have no value were there not a degree of scarcity. "Monopoly," whatever else it means, always conveys the idea of some exceptional kind of scarcity due in part to some source or cause not ordinarily present. Many economic writers, for example, have called land-ownership monopoly, saying that land being the work of nature cannot be increased by men, and therefore must always be scarce. Even if it were true that in the economic sense land could not be produced by man, there still would be con fusion here between a general class of goods and a special thing. The fact that a particular field cannot be duplicated does not make a monopoly of land as a whole. Nothing can be duplicated exactly, but units _very like can be bought of others that will do just as well. It leads to absurdity to use the word monopoly with reference to land-ownership indis criminately. Neither the humble owner of forty acres of land worth four hundred dollars, nor the owner of a village lot worth a hundred dollars, has any monopoly power. Neither mere scarcity nor the limitation of natural stores should be called monopoly when ownership of like goods is scattered and combination between owners does not exist.
§ 6. Monopoly is not merely superior economic power. Neither does the ability of superior material agents and of skilled workers to secure higher returns than do poor ones constitute monopoly. The free competition assumed in ab stract discussions of value does not mean equal capacity or efficiency, but the legal freedom and the personal willingness to move a productive agent into the highest industrial place it is capable of holding. The rocky field does not compete with the fertile one in the sense that it can yield the same uses. The field fit only for potatoes does not compete with those rare and favored localities that can raise the best wines. The gardener earning two dollars a day does not compete with the skilled physician with an income of twenty thousand a year, for he has not the economic capacity to do so; but he is free to compete (as is the owner of the rocky field) unless law, caste, class legislation, social prejudice, or some other ob jective factor forbids. Anything, however, that prevents the labor or wealth of buyers or sellers from applications for which they are fitted, defeats free competition. To use the term monopoly of any and every limitation of economic ability is to extend it to every case of value. To use it of the high wages of skilled workmen, where no union to suppress competition exists among them, is to make it a colorless synonym of scar city. It should be confined to a narrower and more exclusive use. Some special kinds of limitation should be connected with the idea of monopoly. The limitation connected with monop oly is not that of economic capacity but that of ownership and control. • § 7. Partial competition coexisting with monopoly. The limitation of competition in the case of monopoly is usually in some part merely, or on one side of the market. It is true that a condition of double or two-sided monopoly may exist; indeed, this is always the case in isolated trade, but the typical and important problems of monopoly, in advanced industrial conditions, are those where competition is from the traders on one side while it continues to press with full force upon the traders on the other I See above, sec. 3, on the conflicting interests of competition.