Itisonlyonafootingofmonopolythatthisgrindingdepressioncanbedefinitivelysetaside。Butthemonopolyneednotbeabsoluteinordertoaffordasomewhatenduringrelief。
　　Whatisnecessaryisthatthemonopolyshouldcomprehendallbutanegligiblefractionofthebusinessconcernsandtheequipmentengagedinthefieldwithinwhichcompetitionhaskeptprofitsbelowareasonablelevel。Whatisanegligiblequantityinsuchacaseisnottobedeterminedongeneralconsiderations，sinceitdependsineachcaseoncircumstancesaffectingtheparticularindustry。But，inageneralway，themorenearlycompletethemonopoly，themoreeffectuallyisitlikelytoserveitspurpose，44*
　　Suchbusinesscoalitionshavetheeffectofbringingprofitstoareasonablelevel，notonlybymakingitpossibletoregulateoutputandprices，butalsobytheeconomieswhicharemadepracticableonthisfooting。Coalitionsofalesscomprehensivecharacter，asspokenofabove，alsoeffecteconomiesinthecostofproduction。Butthelargercoalitionswhichbringthebusinesstoamonopolybasishavenotonlytheadvantagewhichcomesofthelarge-scaleorganizationoftheindustrialprocess，buttheyalsoenjoypeculiaradvantagesinthematterofcost，duetotheirmonopolyposition。Theseaddedadvantagesaremoreparticularlyadvantagesinbuyingorbargainingforallgoods，materials，andservicesrequired，aswellasinsellingtheoutput。Solongasthecoalitionsarenotcomprehensiveenougheffectuallytoeliminatecompetition，theyareconstrainedtobothbuyandsellincompetitionwithothers。Butwhenthecoalitioncomeseffectuallytocoveritsspecialfieldofoperation，itisable，notonlytofixthepriceswhichitwillacceptonthebasisofwhatthetrafficwillbear，butalsoinaconsiderablemeasuretofixthepricesorrateswhichitwillpayformaterials，labor，andotherservicessuchastransportationonasimilarbasis，-unlessitshouldnecessarilyhavetodowithanothercoalitionthatisinasimilarpositionofmonopoly。
　　Therulewhichgovernsthefixingofratesonthissideofthebusinessdealingsofamonopolisticcoalitionissimilartothatwhichguidesitstransactionsinthematterofsales。Pricesandrates，as，e。g。，formaterialsandlabor，arenotdepressedtothelowestpossiblepoint，buttothelowestpracticablepoint，-tothepointcompatiblewiththelargestnetprofits。
　　Thismayormaynotbeapointbelowtheratesnecessaryunderaregimeofcompetitivebuying。Itmaybeaddedthatonlyinrarecasesdoesacoalitionattainsostrongapositioninrespectofitspurchasesofmaterialsorservicesastoliftthissideofitsbusinessentirelyabovethereachofcompetition。45*
　　Whereverthisexpedientofcoalitionhasbeenfoundpracticable，thechronicdepressionofrecenttimesandtheconfusionanduncertaintywhichgoeswithadepressedcompetitivebusinesssituationhavebeenobviated。Thegreatcoalitionsdonotsufferacutelyfromtheillsofdepression，exceptincaseswheretheirindustrialprocessesaretoapeculiardegreeinthepositionofintermediarieswithintherangeofthecompetitiveindustries，asisthecase，e。g。，withmostrailroads。Buteveninsuchacasethecoalitionwhichhasamonopolyismorefortunateasregardsthestabilityofitsbalancesheetthanthesametrafficwouldbewithouttheadvantageofmonopoly。
　　Barringprovidentialintervention，then，theonlyrefugefromchronicdepression，accordingtotheviewheresetforth，isthoroughgoingcoalitioninthoselinesofbusinessinwhichcoalitionispracticable。Butsincethiswouldincludethegreaterpartofthoselinesofindustrywhicharedominatedbythemachineprocess，itseemsreasonabletoexpectthattheremedyshouldbeefficacious。Thehigherdevelopmentofthemachineprocessmakescompetitivebusinessimpracticable，butitcarriesaremedyforitsownevilsinthatitmakescoalitionpracticable。Theulterioreffectsofthoroughgoingmonopoly，asregardstheefficiencyofindustry，theconstancyofemployment，theratesofwages，thepricesofgoodstoconsumers，andthelike，are，ofcourse，largelymatterofsurmise，andcannotbetakenupinthisinquiry，thepresentpurposebeingmerelytogiveinoutlineaneconomictheoryofcurrentbusinessenterprise。
　　Afurtherconsiderationhearingonthelaterphasesofthebusinesssituationmaybeadded。Thegreatcoalitionsandthebusinessmanoeuvresconnectedwiththemhavetheeffectofaddingtothelargefortunesofthegreaterbusinessmen；whichaddstothelargeincomesthatcannotbespentinconsumptiveexpenditures；whichacceleratestheincreaseofinvestments；
　　whichbringscompetitionifthereisachanceforit；whichtendstobringondepression，inthemanneralreadyindicated。Thegreatcoalitions，therefore，seemtocarrytheseedofthismaladyofcompetition，andthisevilconsequencecanaccordinglybeavoidedonlyonthebasisofsocomprehensiveandrigorousacoalitionofbusinessconcernsasshallwhollyexcludecompetition，eveninthefaceofanyconceivableamountofnewcapitalseekinginvestment。
　　Whathasmadechronicdepressionthenormalcourseofthingsinmodernindustrialbusinessisthehigherdevelopmentofthemachineprocess，given，ofcourse，thetraitsofhumannatureasitmanifestsitselfinbusinesstraffic。Themachineprocessworksthiseffectbyvirtue，chieflyifnotaltogether，ofthesetwocharacteristics:1arelativelyrapidrateofincreasingefficiency；and2thecloseinterdependenceoftheseverallinesofindustrialactivityinacomprehensivesystem，whichisgrowingmorecomprehensiveandcloseknitasimprovementandspecializationofindustrialprocessesgoon。Thelast-namedfactorcountsformoreinproportionastheinterdependencegrowscloserandmorecomprehensive。Disturbancesareprogressivelytransmittedwithgreaterfacilityandeffectthroughoutthesystem，andeachlineofindustrialbusinesscomestostandinrelativelyintimaterelationstoaneverincreasingrangeofotherlineswithwhichitcarriesonatrafficofpurchaseorsale。Aconsequenceofthisstateofthingsisthatanybusinesscoalition，inordereffectuallytoserveitspurposeofmaintainingearningsandcapitalization，isrequiredtobeoflargerscopeandclosertexture。Astheexigencieswhichenforcetheresorttocoalitionuninterruptedlygaininscopeandurgency，the“trust“musttakethesamecourseofgrowthtomeettheseexigencies；until，withsomeslightfurtheradvancealongtheaccustomedlines，thetrustwhichshallservethemodernbusinesssituationmustcomprehendinoneclosebusinesscoalitionvirtuallythewholefieldofindustrywithinwhichthemachineprocessisthedominantindustrialfactor。46*
　　Tothisthereisabroadexception，givenbythecircumstancesoftheindustrialorganization。Thisorganizationrestsonthedistinctionbetweenbusinessmanagementandownership。Theworkmendonotandcannotownordirecttheindustrialequipmentandprocesses，solongasownershipprevailsandindustryistobemanagedonbusinessprinciples。Thelaborsupply，ortheworkingpopulation，canthereforenotbeincludedintheideallycompletebusinesscoalitionsuggestedabove，howeverconsummatethemachinesystemandthebusinessorganizationbuiltuponitmaybecome。Sothatwhenthelaststepinbusinesscoalitionhasbeentaken，thereremainsthecompetitivefrictionbetweenthecombinedbusinesscapitalandthecombinedworkmen。
　　Fromtheconsiderationsrecitedaboveitappearsthatthecompetitivemanagementofindustrybecomesincompatiblewithcontinuedprosperitysosoonasthemachineprocesshasbeendevelopedtoitsfullerefficiency。Furthertechnologicaladvancemustacttoheightentheimpracticabilityofcompetitivebusiness。Asitissometimesexpressed，thetendencytoconsolidationisirresistible。Moderncircumstancesdonotpermitthecompetitivemanagementofpropertyinvestedinindustrialenterprise，muchlessitsmanagementindetailbytheindividualowners。Inshort，theexerciseoffreecontract，andtheotherpowersinheringinthenaturalrightofownership，areincompatiblewiththemodernmachinetechnology。Businessdiscretionnecessarycentresinotherhandsthanthoseofthegeneralbodyofowners。Intheidealcase，sofarasthemachinetechnologyanditsbusinessconcomitantsareconsistentlycarriedthrough，thegeneralbodyofownersarenecessaryreducedtothepracticalstatusofpensionersdependentonthediscretionofthegreatholdersofimmaterialwealth；thegeneralbodyofbusinessmenaresimilarly，intheidealoutcome，disfranchisedinpointofbusinessinitiativeandreducedtoabureaucratichierarchyunderthesameguidance；andtherest，thepopulace，isverydifficulttobringintothescheduleexceptasrawmaterialofindustry。Whatmaytakeplacetoaccentuateormitigatethistendencyisaquestionofthedriftofsentimentonthematterofpropertyrights，businessobligations，andeconomicpolicy。Sofarastheeconomicfactorsatplayinthemodernsituationshapethisdriftofsentimenttheydosoinlargepartindirectly，throughthedisciplinaryeffectofnewanduntriedcircumstancesofpoliticsandlegalrelationtowhichtheirworkinggivesrise。
　　NOTES:
　　1。SuchadiscussionasPatten’sTheoryofProsperityappliestotheregimeof“naturaleconomy“，andpassablyalsotothatofhandicraftandpettytrade，butdoesnotseriouslytouchthemodernsituation。Thelikeistruegeneralityforcurrentdiscussionsofthistopic。
　　2。WealthofNations，Introduction。
　　3。Thismeans，inconcreteterms，priortotheregimeofthemachineindustry。Sincethecominginofthemachine，modernbusinessenterprisehastakenoverthemanagementofindustry；
　　thatistosay，industryhascometobemanagedbythemethodofinvestmentforaprofitbywhatisinaimandanimusessentiallythecommercialmethod。Ashasbeenremarkedabove，capitalhasbecomevendibleinadecisivedegree。Thematerialfactorsengagedinindustry，particularlyinthemachineindustryproper，arevendibleinaboutthesameperhapsonanaverageinahigherdegreeasthematerialitemshandledbycommercialtrafficarevendible。Thisistrueofrawmaterials，laborpower，andindustrialequipment，butitispeculiarlytrueoftheindustrialequipment-themechanicalfactorsinthestrictersense。Itisinthesemechanicalappliancesprimarily，butintheotherfactorsofthemachineindustryinonlyaslightlylowerdegree，thatthetrafficofinvestment，andofpurchaseandsaleconnectedwithinvestment，isparticularlyactive。Withinthesewiderlimitsafurtherlimitationmaybemade。“Vendibility“ofallitemsinvolvedis，asabroadlygeneralrule，carriedtothehighestpitchinthosebranchesofindustrythathavetodowiththeproductionof“producer’sgoods。“Thesebranchesareatthesametime，andpartlyinconsequenceofthisfact，morewidelyandintimatelyrelatedtootherbranchesofindustrythanareanyothergroupofindustrialprocessesthatmightbenamed。Itseemstobethisextremeprevalenceofvendibility，togetherwiththismorefar-reachingandmoreexactingarticulationwiththeindustrialprocessatlarge，thatchieflygivessubstantialsignificancetoaclassificationoftheselinesofindustryas“Produktivmittel-Industrien“bylateGermanwriters。Thereis，forbusinesspurposes，adifferenceofdegree，inbothoftherespectsnamed，betweenthisill-definedgroupofindustrialprocessesontheonehand，andthecontrastedgroupoccupiedwiththeproductionofconsumptiongoodsontheotherhand。The“productive-goodsindustries“showthemodernindustrialandbusinesstraitsinanaccentuatedformandforce，andtheyare，byconsequence，inastrategicallyprimarypositioninthebusinesssituation。
　　4。Cf。，e。g。，A。Spiethoff，Jahrbuchf。GesetzgebungVerwaltungu。Volkswirtschaft，vol。XXVI。Heft2。“VorbemerkungenzueinerTheoriederUberproducktion。“andvol。XXVII，pp。348-353；
　　Turgan-Baranowsky，TheorieundGeschictederHandelskriseninEngland，pp。16-28；L。Pohle，PeriodischeWirschaftskrisen，especiallysec。II，withsubjoinednotes。
　　ThisiswellexemplifiedinTugan-BaranowskyHandelskrise，whodeclaresattheoutsetp。17thatmoneyandpricearenegligiblefactorsforthepurposeinhand。Hetherebycommitshimselftothepositionthatthesecrisesarephenomenaofthematerialprocessesofeconomiclifeproductionandconsumption，notofbusinesstraffic。Hencetheultimatefailureofthisacuteobserverandtheoreticiantoreachatenablesolutiontothequestion。SubstantiallytheistrueofMarx，whomTuganfollows，thoughwithlargereservations。Cf。Marx，Capital，vol。III，ch。