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Chapter X. The Market Law

There is a widespread belief that so-called monopolies can and do raise the prices of their commodities at will; that John D. Rockefeller, for instance, recoups himself for some of his charitable outlays by raising the price of kerosene or gasoline. If we stop to think about it, John D. might just as well defer making the donation until he had first collected the toll which he is alleged to have power to levy. As a matter of fact there need necessarily be no more connection between Rockefeller's philanthropy and a raise in the price of Standard Oil products than a striking coincidence.


Admittedly, John D. has great power, very much too great, but his power is not great enough to set aside the laws of the market. While Standard Oil is striving to become, it is yet far from being an absolute and complete monopoly; nor is there yet a monopolized condition in anything. The extent to which vast combinations of capital, like the Standard Oil, have been formed, results not from bucking, or trying to buck the laws of the market, but from strictly observing its laws and being governed by them.

When it is assumed or asserted that the will of the corporations is superior to and disregardful of the laws of the market, so that it can and does dictate the prices of commodities, there is no ground upon which to base the assumption or assertion. These corporations, like all others who enter the market, do not dictate to the market but are dictated to by the market. They are the logical fruit of capitalist experience in the market, built up to accord with its laws and not in defiance of them.

In the early days of the capitalist system, when unrestricted competition was the rule and before the necessity for gauging the capacity of the market was understood or the means for doing so had yet been developed, each individual manufacturing concern was impelled by an ambition to secure for itself as large a slice of the market as possible. Each manufacturer went ahead with production without regard to the others in the same line, who did likewise—all impelled by the same motive. The inevitable result was that the market became so congested, periodically, that these manufacturers were compelled to slow down production or to shut down their plants entirely.

Many of them were unable to wait until the market had again become normal and could absorb their products. They were pressed by their individual and immediate needs, for they were operating on a very narrow margin of capital, while, indeed, some of them had no margin whatever and were compelled to realize upon their production, even though it meant great sacrifice to do so. "Necessity knows no law," not even market laws. So, in the ensuing competition to raise sorely needed revenue, values and surplus values were lost sight of and commodity prices were lowered even far below the actual cost of production to the capitalists. These were truly times of "sacrifice sales." Many of the capitalists were bankrupted and dropped into the ranks of the wage earners.

The Lesson

Each of these periods furnished an object lesson to the surviving capitalists. They learned that competition was not the life of capitalist trade but a dangerous death-dealing condition which it were well to remedy. These experiences were not lost upon them and they proceeded to eliminate competition among themselves to as great an extent as possible. We find that following these periods, there was reorganization and rearrangement which enabled the newer and stronger forms of capitalist property to better withstand the adversities due to the recurring periods when the market is congested, which will be so long as surplus value is wrung from the labor of the wage-working class. Moreover, these more capable forms were able to win advantage from the difficulties of the weaker capitalists during panicky times.

As these property forms grew in scope and magnitude they found it advisable to divide their system of management. Departmental spheres were instituted which conducted necessarily closely-related processes, and, among others, one was organized whose function is to survey the world's commercial outlook and to collect such data as will serve to guide the enterprise so that the supply of the commodities in which it deals will always approximate the demand for them. It is an attempt to balance supply and demand in the market.

This move on the part of the larger capitalists pointed the way to the rest of the capitalists, and, as it was, too expensive a proposition for most of them to undertake individually, they commandeered their national organ, the government, and the United States consular service was brought into existence.

Consular Service Aid

Through the consular service of the government our manufacturers are supplied with information as to where in the world this, that or the other commodity is needed and about how much. They are also made aware what the capitalists of other countries are doing in relation to outside and home markets, and consequently they are in a much more favorable position to participate in world trade than were the capitalists of an earlier day. The manufacturers of today are better equipped to estimate the capacity of the market and to regulate supply to approximate demand. This enables them to sell their commodities at their real value or near it.

If the will of Standard Oil, or any other capitalist concern, could override the laws of the market, the market would, automatically, be destroyed—there would be no market. The condition for a revolution would be, by that very fact, established. There would be no other way out, for there would exist a power whose will was subject to no check or restraint. The autocracy to which capitalist ambition aspires would then be already realized. That not only is not so, but is destined never to be so. There is the social law whose decrees are immutable which will operate to prevent this consummation.

One Regulator

But suppose John D. did take the notion to raise the price of oil arbitrarily, could he do it? John D. is in business for profit. The amount of his profit depends largely upon the volume of his sales. If he raises the price of his oil or gasoline above its value, sales will fall off. When oil is cheap those who use kerosene will start the fire in the morning or evening with a cup of oil; they are not so particular about burning the lamp an hour or so longer in the evening. But let it go up in price, then they are inclined to husband their supply. When we consider the great numbers who use oil we will see that a very little saving by each of them will, in the aggregate, cause a severe cut in the amount of John D.'s sales. If through a mistaken idea John D. were to raise his price still higher, instead of burning oil many of his customers would turn to other illuminants—candles for instance. John D. knows that he does not gain by lessening the number of his customers but by increasing them. If he raises the price of gasoline, many who now use cars would use them less, and if the price went too high they would lay them away in the garage and use a street car or walk. It is not good business policy to force anything of this kind and good business men, like John D. do not do it.

Then, there is always idle capital seeking investment. When opportunity offers it is ready to go into competition with invested capital, and so serves as a check and enforces the market laws upon those who would disobey them. Not that it is inspired by any motive of compelling obedience to these laws, but is seeking an opportunity to get itself profitably invested.

The Workers' Lesson

What we, of the working class, should be particularly interested in about these corporations are the changes they have made in industry, and the need for organization, which these changes emphasize, in order to safeguard our interests as workers.

They have brought about an arrangement in industry whereby things are produced with a minimum expenditure of human energy. The advance made in productive industry, as a result of their methodical improvement, proves disastrous to us only because we have not organized ourselves so as to take advantage of it. As less energy is required in production the demand for laborers decreases, because without organization we are unable to claim for ourselves any share in advantages that would be impossible without us. The results of tool improvement and time-saving arrangements all go to the employers, and as the measure of their benefits increases so does the volume of our misery also increase. Instead of organizing to reap benefit from machinery we have remained unorganized, until in place of working less hours and being more comfortably conditioned, we work longer hours when we are working, or that part of us which is working, and there is an increasing number of us who are permanently condemned to idleness and want.

Shorter Workday

The first and prime need of the workers is to lower the hours in the working day, in an attempt to lift the millions of permanently unemployed out of the slough of idleness and furnish them with an opportunity to provide themselves with the means of life. There should be a national movement by all the workers to secure a universal eight hour day.

If the eight hour day will not suffice to bring security to the workers we must push on for further limitations. We owe no apology to the capitalists, nor to anybody else for insisting that the very first charge against industry is provision for and the security of those who are necessary to and who carry on its operations.

The I. W. W.

The capitalist system must be replaced by a system which will recognize in industry a means through which social wants and comforts are provided. To accomplish this is the mission of the working class. This idea dominated a gathering of American workers in Chicago in 1905. These men and women were not only workers in the industries, but also students of labor history as well. They adopted a declaration of principles and founded an organization the purpose of which was to bring into existence a social system in which the workers would administer the affairs of society. The organization they launched conforms. to the capitalist arrangement in industry and they breathed into it the spirit of the working class.

That organization is the Industrial Workers of the World. It has bid for the attention of the working class and won the hostility of the capitalists and of every flunkey and lickspittle that wears the livery of capitalism, from Judge Gary to the last small fry official of the craft unions who flaunts the badge of labor only to betray the workers.

Thousands of I. W. W. members have gone to jail and been done to death, legally and otherwise, for preaching the doctrine of labor salvation. That organization is the most feared and worst hated union in the world. That it is, is its highest recommendation to the workers of the United States. When men dare the persecution that has been endured by the I. W. W., they have furnished a reason why the cause they advocate and the philosophy that strengthens them should be investigated by the workers.

Here is their declaration of principles :

The working class and the employing class have nothing in common. There can be no peace so long as hunger and want are found among millions of working people and the few, who make up the employing class, have all the good things of life.

Between these two classes a struggle must go on until the workers of the world organize as a class, take possession of the earth and the machinery of production, and abolish the wage system.

We find that the centering of management of the industries into fewer and fewer hands makes the trade unions unable to cope with the ever growing power of the employing class. The trade unions foster a state of affairs which allows one set of workers to be pitted against another set of workers in the same industry, thereby helping defeat one another in wage wars. Moreover, the trade unions aid the employing class to mislead the workers into the belief that the working class have interests in common with their employers.

These conditions can be changed and the interest of the working class upheld only by an organization formed in such a way that all its members in any one industry, or in all industries if necessary, cease work whenever a strike or lockout is on in any department thereof, thus making an injury to one an injury to all.

Instead of the conservative motto, "A fair day's wage for a fair day's work," we must inscribe on our banner the revolutionary watchword, "Abolition of the wage system."

It is the. historic mission of the working class to do away with capitalism. The army of production must be organized, not only for the every-day struggle with capitalists, but also to carry on production when capitalism shall have been overthrown. By organizing industrially we are forming the structure of the new society within the shell of the old.


  • 1. Can Standard Oil dictate the price of oil?
  • 2. What result has an overstocked market on prices?
  • 3. What did the capitalists learn from panics?
  • 4. What relation has the government consular service to American industry?
  • 5. Why would the market be destroyed if the will of the capitalists could determine prices?
  • 6. Do you know any factor that might serve to influence prices?
  • 7. What effect would a refusal to buy or to buy as much as formerly have on prices? Why?
  • 8. In what way does idle capital influence prices?
  • 9. What particular lesson has trustified property for wage laborers?
  • 10. When was the I. W. W. formed?
  • 11. What are the principles of the I. W. W.?
  • 12. Why is the I. W. W. hated?

Next page: Chapter XI. In Conclusion