ABSTRACT
But whatever disadvantages may be supposed to attend on the change from a small to a large system of production, they are not applicable to the change from a large to a still larger. When, in any employment, the régime of independent small producers has either never been possible, or has been superseded, and the system of many workpeople under one management has become fully established, from that time any further, enlargement in the scale of production is generally an unqualified benefit. It is obvious, for example, how great an economy of labor would be obtained if London were supplied by a single gas or water company instead of the existing plurality. While there are even as many as two, this implies double establishments of all sorts, when one only, with a small increase, could probably perform the whole operation equally well; double sets of machinery and works, when the whole of the gas and water required could be produced by one set only; even double sets of pipes, if the companies did not prevent this needless expense by agreeing upon a division of the territory. Were there only one establishment, it could make lower charges, consistently with obtaining the rate of profit now realized. But would it do so? Even if it did not, the community in the aggregate would still be a gainer: since the shareholders are a part of the community, and they would obtain a higher profit while the consumers paid only the same. It is, however, an error to suppose that the prices are ever permanently kept down by the competition of these companies. Where competitors are so few, they always end up by agreeing not to compete. They may run a race of cheapness to ruin a new candidate, but as soon as he has established a footing they come to terms with him. When, therefore, a business of real public importance can only be carried on advantageously upon so large a scale as to render the liberty of competition almost illusory, it is an unthrifty dispensation of the public resources that several costly sets of arrangements should be kept up for the purpose of rendering to the community this one service. It is much better to treat it at once as a public function; and if it be not such as the government itself could beneficially undertake, it should be made over entire to the company or association who will perform it on the best terms for the public. In the case of railroads, for example, no one can desire to see the enormous waste of capital and land (not to speak of increased nuisance) involved in the construction of a second railway to connect the same places already united by an existing one; and after a short time would probably be amalgamated. Only one such line ought to be permitted, but the control over that line never ought to be parted with by the State, unless on a temporary concession, as in France; and the vested right which Parliament has allowed to be acquired by the existing companies, like all other proprietary rights which are opposed to public utility, is morally valid only as a claim to compensation.
