CHAPTER IV.

THE SOCIALIZATION OF OTHER NATURAL MONOPOLIES, AND THE TREATMENT OF ARTIFICIAL MONOPOLIES.

NATURAL monoplies of the second class are those which become monopolies because the supply of raw materials, consisting of natural treasures, is so limited that it can all be acquired by a single combination of men. Anthracite coal has been cited as an illustration; other similar cases could be instanced. It is said that it has been possible to purchase practically the entire supply of some raw materials found among barbarous or semi-barbarous peoples; not so much, perhaps, on account of the limitation of the supply, as on account of the fact that it is easy to cheat them, and to buy a great supply at far less than its actual value. Wherever the supply of an article is so limited that it can all be secured by a single combination of men, making monopoly prices possible by limitation of the supply upon the market, the only adequate remedy would seem to be collective ownershipownership by the nation, commonwealth, or some local political unit.

A distinction must be made between the ownership of agricultural land upon which wealth is produced, and natural treasures which are found ready made, so to speak, mostly beneath the surface of the earth, so that all man has to do is to appropriate them. Private ownership is important with respect to agricultural land,

because it encourages production; but the natural treasures of which we speak are found already created, and no social institution can add to their supply. All that can be required is that a sufficient reward should be given to those who appropriate them. This fair return, of course, is all that is needed, even in agriculture; but the distinction is not so easily drawn in that pursuit as it is in the exploitation of the natural treasures of the earth. Even should we grant private ownership in the land, it is an exaggeration of that institution, forming no essential part of the principle of private property, to allow the land-owner to own indefinitely all that is above him, and all that is below him to the centre of the earth. The legal systems of many countries have always regarded the natural treasures below the surface of the earth as public property, and they should be thus regarded everywhere.

So far as barbarous or semi-civilized peoples are concerned, it is difficult to see what they can do until they become more civilized, and form organized governments, unless, indeed, they should receive protection by the civilized nations of the earth.

It does not appear evident at once that the collective management of the property collectively owned is essential. If the anthracite coal mines were owned by the State or by the nation, satisfactory results might, perhaps, be secured by leasing the land, or by allowing individuals or companies to mine coal freely on the payment of a royalty which would absorb any economic surplus above the normal returns to labor and capital.

Artificial monopolies, apart from those which become such on account of their close connection with natural monopolies, whereby they are made to partake of the

qualities of the latter, are those businesses which are made so by legislative enactment, or by some act of public authority. These are the monopolies with which our forefathers had to deal; for kings and queens formerly granted exclusive privileges to favored persons, permitting no one else to engage in certain undertakings. These artificial monopolies early became odious, and sovereigns were forced to forego the privilege of granting them. The odium which attached to them is shown by the "bills of rights," like that which forms part of the Maryland constitution, forbidding the creation of any monopolies. Reference was not had, and in the nature of the case could not be had, to the natural monopolies which are now the most important class of monopolies.

The existing artificial monopolies so far as they are created by government are chiefly such as are created by copyrights and patents, and their purpose is the public welfare. The design is to encourage literary production and invention by exclusive privileges strictly limited in point of time. These exclusive privileges appear, on the whole, to promote the public welfare. Where they do otherwise, all that can be desired with respect to them is, perhaps, a clear recognition of the actual principles involved, and certain modifications in the present laws designed to prevent abuses which have grown up, particularly with respect to patents.

Copyrights interfere least of all with industrial freedom, because no two persons can possibly produce the same book, or musical composition, or any other work which is copyrighted. The fact that one person has written a book cannot keep any other person from writing another book on the same subject. There is reason,

however, for a limitation of copyrights with respect to the time of their duration. What is wanted is to encourage production, and to give a reward for production, but not to make it possible for persons to live upon the results of the exertions of others. Authors should be granted copyrights, perhaps lasting as long as they live, or during such a period that ordinarily the copyright would cover the lifetime of the author, and possibly also a few additional years in order to provide for the author's family. Perpetual copyrights would, in the case of very valuable works, limit production, and make it possible for the descendants of meritorious men to lead idle and useless lives. Had Shakespeare been granted perpetual copyrights, we might have descendants of his to-day living in the greatest luxury to their own harm, and to the injury of society. Fortunately, we have no dukes and duchesses of Shakespeare's blood!1

The author owes much to society, because no literary production is a purely individual effort; but the inventor owes much more. Every invention is simply the capstone of a long line of previous inventions and discoveries. To give too much to the inventor is to use a different figure-like paying an excessive price to the one who puts the roof on a house, and comparatively little to those who constructed all the rest of the building. The last step which leads to a valuable invention is often unavoidable, and, as a matter of fact, the step is frequently taken by several persons acting independently of each other, so that it is difficult to tell who is really the first inventor. Germany, for example, disputes American claims of originality with respect both to the electric telegraph

1 Cf. Fabian Essays, "Property under Socialism," by Graham Wallas.

and the telephone, and in America itself, it does not seem to be entirely clear to whom should be attributed the merit of the invention of the telephone. We have, then, to do with a radically different case from that of authorship, because an exclusive right given to one person does interfere with the industrial liberty of others, not permitting others to do that which they would nat urally and spontaneously do. It has been proposed by some on this account to abolish the patent system altogether, and it must be acknowledged that there are other ways of encouraging industrial progress. Able men in the scientific laboratories of the country are continually working to make discoveries and inventions, and they do this without the incitement of any industrial privilege. All that they desire is an assured income, and abundant tools and implements for their scientific work. Emulation supplies the only other motive needed.1

It would be far cheaper for the country to spend ten times as much as at present on technical schools and scientific laboratories than to maintain its patent system, if the same results could be reached. The experience of Germany, however, in the absence of an effective patent system, before the formation of the Empire, is not entirely reassuring, because, it is said, it retarded the industrial development of that country. Probably the best results in the United States would be reached by a further development of the American patent system, borrowing some of the features which have been introduced into the patent laws of Germany and England, which are among the best in existence. One American abuse consists in an undue extension, by 1 Cf. "The Abolition of Patents," Longmans & Co., London, 1869.