64 MONOPOLY CAPITAL
serve to remind us that it takes time for a stable oligopoly to
emerge and for the corporations which compose it to develop
an appropriate pattern of profit-maximizing behavior.
The end of the shake-down period naturally does not mean
the end of the struggle for larger market shares; it simply
means the end of price competition as a weapon in that strug-
gle. The struggle itself goes on, but with other weapons. And
this explains why, though the traditional theory of monopoly
price applies with only minor qualifications to the economy of
giant corporations, that economy nevertheless does not func-
tion as though it were composed of pure monopolies.
4 under monopoly capitalism to insure, as far as possible, that
There are industries, among them very important ones, to
which these theoretical considerations do not apply. These in-
clude the ''natural'' monopolies: electric power, telephones,
and the other public utilities (railroads used to belong to this
group, but they are now subject to severe competition from
trucks and airplanes). They also include extractive industries
like crude oil production and agriculture. In a sense these two
groups stand at opposite poles: the public utilities are such
close monopolies and their products so essential that they .
could easily charge prices that would yield much higher profits
than are enjoyed by the typical industrial giant; while the ex- .
tractive industries tend to be inordinately competitive and
unprofitable. Left to themselves, in other words, these indus-
tries tend to be either unduly profitable or unprofitable as meas-
ured by the norms of Big Business.
Now under monopoly capitalism it is as true as it was in
Marx's day that ''the executive power of the ... state is simply '.
a committee for managing the common affairs of the entire ·
bourgeois class."11 And the common affairs of the entire hour- :
geo!s class include a concern that no industries which play '
an important role in the economy and in which large property .
11
Communist Manifesto, Part 1, paragraph 12.
THE TENDENCY OF SURPLUS TO RISE 65
interests are involved should be either too profitable or too
unprofitable. Extra large profits are gained not only at the ex-
pense of consumers but also of other capitalists (electric power
and telephone service, for example, are basic costs of all indus-
tries), and in addition they may, and at times of political insta-
bility do, provoke demands for genuinely effective anti-
monopoly action. Abnormally low profits in a major branch of
the economy such as agriculture, on the other hand, damage
the interests of a large and politically powerful group of prop-
erty owners who are able through pressure and bargaining
with the other capitalists to enlist the necessary support for
remedial action. It therefore becomes a state responsibility
prices and profit margins in the deviant industries are brought
within the range prevailing among the general run of giant
corporations.
This is the background and explanation of the innumerable
regulatory schemes and mechanisms which characterize the
American economy today commission regulation of public
utilities, prorationing of oil production, price supports and
acreage controls in agriculture, and so on. In each case of
course some worthy purpose is supposed to be served to pro-
tect consumers, to conserve natural resources, to save the
family-size farm but only the naive believe that these fine
sounding aims have any more to do with the case than the
flowers that bloom in the spring. There is in fact a vast litera-
t~re, based for the most part on official documents and statis-
tics, to prove that regulatory commissions protect investors
rather than consumers, that oil prorationing wastes rather than
~onserves natural resources, that the family-size farm is declin-
ing faster than in any previous period of American history .12
All of this is fully understandable once the basic principle is
grasped that under monopoly capitalism the function of the
. 12A
se bl donsiderable body of the relevant material is conveniently as-
nomol e . and summarized in Walter Adams and Horace M. Gray, Mo-
p Yin America: The Government as Promoter, New York, 1955.