24. The Folklore of Trust-Busting

And he thought about how the everyday business world is transformed, when some people talk about it, into a darkness peopled by hobgoblins in the form of predators, plunderers, parasites, and "vested interests" great shapeless horrors in top hats, with pink, clutching hands, monopolists, oligopolists, and greedy corporations. An octopus waves his tentacles from Wall Street, and big bad corporate wolves lie in wait with long teeth for Little Business. The theme of this bedtime horror story is that the public, the consumer, the wage-earner, and/or little-business are like Little Red Riding Hood carrying her basket of groceries through the wood. "Why, Grandma, what great big teeth you have!" It is a Jack-the-Giant-Killer story, in which Big Busi 186 THE FOLKLORE OF TRUST-BUST'ING 187 ness is always the Giant, and business-baiting Congress men play the role of Jack; it is a David-and-Goliath story in which Big Business is the arrogant Goliath and gov ernment lawyers play David with his sling-shot. For back of all this legislation and interpretation and eco nomic theory is the fear of big-meaning powerful privately owned corporations. It is against them that Congress wrote the Robinson-Patman Act, that the Fed eral Trade Commission has attacked quantity discounts, freight absorption and good-faith price competition, that the Supreme Court has invented the crime of "monopoly power" and that the Department of Justice has attacked the A&P.

Back of all this queer law and queer economics is the queer feeling that large successful businessesare a danger to the community. Everything they do, in this dark of-the-moon frightened view, is a threat. If they raise prices, it hurts the consumer. If they lower prices, it hurts the little competitor. If they expand, they are getting too big; if they don't expand, they are sabotaging the country's growth for their own ulterior monopolistic purposes. Americans have long been ambivalent about bigness. They have loved it and feared it. On the one hand they have built and boasted of the biggest buildings, the biggest canals, the biggest factories, and the biggest rail road systems, steel mills, power plants and assembly lines in the world. On the other hand, since the days when Andrew Jackson broke up the second Bank of the United States, they have feared the big corporations that have made these things possible. In the 1880's, it was the railroads they feared most; in the 1890's, the trusts; in the 1900's, J. P. Morgan. Then it was Wall Street, and now it is "big business" in general.

188 THE FOLKLORE OF TRUST-BUSTING Previous chapters have described attacks on an almost unbelievably long series of American business practices, methods, and forms of organization. Superficially it would seem that it is these specific practices, methods and forms of organization which are questioned. But like the child who saw the king walk by in his imaginary clothes and naively said, "Why, he has nothing on at all," so the layman is likely to conclude, "Why, there is nothing right about business at all." And such, in fact, appears to be the case. The attacks are on such varie gated things that they appear to be merely parts of one all-out attack, not really on what successful businesses do, but on what they are; not on their sins, but on their power to sin. Thus attacks on at least 18 different aspects of Ameri can business have been discussed in this book. They are, with the chief source: Quantity discounts Morton Salt case Delivered prices Cement case "Good-faith" price-competition 0 ••••0 • 0 0 Detroit gasoline case Matched prices . 0 ••••••••••Cement case Exclusive dealer contracts . 0 • California Standard case Resale-price-maintenance ... Ethyl Gasoline case Lack of resale-price-maintenance '0 0 • 0 ••••••0 •••••••Detroit gasoline case Keeping ahead of cOInpetitors 0 0 • 0 •••••••Alcoa case Possession of power to exclude competitors Tobacco case Possessionof leading positions in industry Tobacco case Price leadership Congressional attacks Administered .prices 0 •••••••Congressional attacks Vertical integration .... 0 0 ••Schine, Paramount, A&P cases 189THE FOLKLORE OF TRUST-BUSTING Horizontal integration A&P case Obtaining lower prices and transmitting to consumer .. A&P case Cutting prices to get volume .A&P case "Uneconomic" profit rates .. A&P case Mere size Griffithcase, Congressionalattacks It is hard to see how any firm of importance in America can fail to be guilty of violating some, if not most, of these canons or interpretations. In other words, if these things are all wrong, American business is all wrong and can be made right by nothing short of utter tear-down and re-assembly along totally different lines. (And the results, it might be added, would be such as to make the authors of the Sherman Antitrust Act turn over in their graves.) For the roots of this distrust we may look to politics.

And for some analysis of them we may perhaps borro\\r some lore from the psychiatrists. Politics is largely the expression of emotions rather than logic. And emotions are the psychiatrists' ·business-especially the emotions that arise out of fear and the ones that conflict with each other. The psychiatrists find two syndromes, or sets, of emo tions which seem to fit the case here. One is paranoia and the other is what they call "compulsion neurosis." Paranoia is the "illusion of persecution." And it seems to take mass form in such mass illusions as fear of capi talists, of the Jews, of Wall Street, of the Catholic Church, of the "liquor interests," of the "Vested Interests," of the New Deal, of the Square Deal, or of Big Business. Paranoid fears have two conspicuous characteristics in the individual and the same thing seems to be true in the mass. In the first place, they are vague, profound, and 190 THE FOLI{LORE OF TRUST-BUSTING almost inaccessible to reasoning. They are almost like the fear of apple-trees and odd-shaped fence-posts in the night. But in the second place, they seem somehow to involve the projection on the person or group feared, of hostile, guilty or dangerous feelings that the paranoid cannot accept or admit in himself. "I hit him because he intended to hit me," is the classic example. Every body has a bit of this in his make-up~ as indicated in the old saying, "You can judge a man's faults by what he criticizes in others."

If there is anything to this, it seems to fit the case at hand. The burden of the attack on business is that it has too much "power." But it goes, almost without saying, that insofar as the attack succeeds, it puts and will put tremendous new powers In the hands of the very government lawyers who are spearheading the attack. The "compulsive," in psychiatric idiom, is the idealist who feels that he is unusually bad but who, paradoxically, intends in the future to remake himself into something unusually good. He is compelled by an inner drive to hitch his wagon to a star and to try constantly to perfect himself. It is as hard for him to satisfy himself as it is for a business man to satisfy a government lawyer. He is inclined to expect other people to keep likewise for ever trying to "improve themselves." If they won't, as is usually the case, he will often try to do it. for them himself. Though he is honest, reliable, and a hard worker, people usually consider him 'hard to get on with.' They may admire him, but they don't particu larly like him; and the feeling is often mutual. So the 4'compulsive" is usually somewhat lonesome, and feels somewhat unappreciated.

The pattern of the present attack on business seems to THE FOLI{LORE OF TRUST-BUSTING 191 have been conceived in an attitude similar to that of the "compulsive" toward himself. Those who have it tend to view the "present. system" as unusually bad, but they tend to assume that it could be resolved into something unusually good. If the· operators of the system seem inclined to feel that the system isn't completely bad and that, after all, it naturally gets a little better every day, these economic perfectionists are alarmingly eager to take on the responsibility. of perfecting it themselves. (It is interesting to note in this connection that Dr. Freud, the grandfather of modern psychiatry, drew many of his early concepts and analogies from the field of politics, such things as repression, freedom, self-government, censor, the "lawless instincts," the "Id" and so on.) Still another source for the feelings of many intellec tuals, supporting the. current attack on business, may be a sort of secularization of the theological dualism of many Protestant churches. In the nineteenth century, many people believed firmly that the world was a battle-ground between two great personal Powers: God.and the Devil.

The one was wholly Benevolent, the other wholly bad. "What was not of God, was of the Devil." The modern fashionable thinker seemsto have changed the subjects, but to have retained the same general idea. Government, spelled with a capital "G," seems to have acquired the halo, as omnipotent, omniscient, and above all benevolent; while Business,also spelled with an initial capital, seemsto have acquired the horns, as greedy, short sighted, and probably malevolent. It may perhaps be significant that many leaders of the modern attack on business are the sons of Protestant ministers who did not follow their fathers into the ministry. The faith and the intensity remain, but the vision has become earthy and somewhat degraded.

192 THE FOLI(LORE OF TRUST-BUSTING Such people seem to feel in their bones that every attack on business,particularly against large corporations, is another battle for. Good against Evil in a permanent crusade. They tend to divide the world into the essen tially good and the essentially bad people. The result often tends to deteriorate into a hair-raising melodrama, solemnly but erroneously called "economics," in which the good people are all good and the bad people are all bad. All the economic "sins" of restricting out put, raising prices, cutting prices, and, in general, chisel ing, cheating, and squeezing are vicessolely of the villains; and all the known economic virtues are hung like haloes around the heads of the good people, who can do no wrong, or who, if they do wrong, at least mean well. Nobody ever says this. But a lot of people seem to feel this way, especially about government officials, on the one hand, and business managements, on the other.