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World War II and the Monopolies

What Is the Future for Monopoly?

(3 August 1946)

From The Militant, Vol. X No. 31, 3 August 1946, p. 6.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The Senate Small Business Committee, in its voluminous study, Economic Concentration And World War II, shows with a wealth of data how World War II benefited only Big Business and how the giant monopolies became even more powerful and dominating. (See The Militant, July 20 and 27)

“What will be the effect of this wartime concentration (of wealth and economic power) upon the peacetime economy?”, asks the report. “Will the wartime gains in concentration be retained, or increased, or will the economy return to its prewar state? – which, it should not be forgotten was already highly concentrated.”

The report states: “During both World Wars, the relative importance of American big business rose sharply. War contracts were issued predominantly to the large concerns, and they accumulated huge profits and controlled the destinies of great numbers of workers.”

Pattern Continues

World War II not only continued this historical pattern, it developed it more rapidly than ever.

“The evidence is compelling that big business will be able to use a number of other wartime developments to increase its relative importance in the postwar economy. These include such factors as production improvements, scientific research, wartime advertising, increased working capital and new facilities.”

The biggest corporations throughout the war were able to “keep their company names, their trademarks, or their brand names before the public eye by means of expensive advertising campaigns. Much of this was of the so-called institutional type in which the firm identified itself with the war effort. Furthermore, much of it was ultimately paid for by the Federal Government, the advertising campaigns being charged off as an expense before taxes, thereby reducing the corporation’s tax payments.”

But these are relatively only minor advantages over small competitors gained by the big monopolies during the war. One of the biggest advantages is the increase in working capital accumulated in the hands of a few “giants of industry.”

“In the immediate postwar years, big business will have billions of dollars in cash that can be used in a variety of ways to improve its position ... By the middle of 1945, the 63 largest listed manufacturing corporations with assets of over $100,000,000 (each) had increased their net working capital to 8.4 billion dollars, more than that of all listed manufacturing corporations (802 listed with Securities and Exchange Commission) in 1939, and, for the reasons indicated above (excess profits tax refunds and tax credits) at the end of 1945 they will hold nearly 10 billion dollars of highly liquid working capital.”

With this capital, the 63 corporations could buy up at option price all government-owned production facilities or “they could purchase the assets of 71,700 smaller manufacturing corporations with assets of less than $3,000,000 each, which represent 94 per cent of the total number of manufacturing corporations in the United States.”

The prospects for further growth of monopoly, the report summarizes, are:

“Economic concentration will probably be higher in the postwar years than before the war as a result of: The production improvements and scientific research which big business gained during the war; the increase in liquid funds and general financial strength of big business; the ability of big business to keep its name and trade-marks before the public eye during the war; and finally the fact that big business will probably acquire a greater share of the war-built facilities which it operated than will small business, regardless of whether economic conditions are prosperous or depressed.”

Significantly, the report notes:

“The rate of mergers and acquisitions in manufacturing was higher in the fourth quarter of 1945 than at any time in the previous decade and a half.”

What to do about this tremendous arid ever growing concentration of economic power, the very power of life and death over the American people, in the hands of a tiny oligarchy of wealth and privilege?

The Senate committee’s report breaks down at this point. In a couple of brief sentences it summarizes its position. It merely states, without any attempt to argue its point, that while the facts it has piled up show that it is “probable” big business will grow still bigger, it should not be concluded that this is “inevitable.” “Concentration not only can be held to its present position; it can be reduced substantiality below that level.”

Crumbs for Small Business

How? The answer of the committee is given in one sentence, “This would require an anti-trust program, a small business program (including financial aid), and a surplus-disposal program directed, specifically, to assist small business on a scale never before contemplated.”

Boiled down to its essence, this program for “substantially” reducing monopoly is – throw a few crumbs to the small businessmen, turn some government-built facilities over to them, help the little capitalist to become bigger and more able to resist the competition of the big corporations. As for an “anti-trust program” – the anti-trust laws on the statute books now cannot be enforced. Big business controls the government too.

This has been the utopian program of the weaker and smaller capitalists since the trusts began to grow. It is, in reality, a program for a return to the era of small-scale production. Those days are gone forever.

The only road is forward. The people want and have a right to more and better things. These are the things which can be secured only by mass production, by organized production on a vast and concentrated scale.

The problem is not the bigness or concentration of production. The problem is Who controls production.

Monopoly in the hands of a few tremendously wealthy and powerful families and groups is an inevitable development under capitalism. Under the system of capitalist “free enterprise” the big sharks devour the small. That is what the facts in the Senate committee’s report prove beyond question.

The same giant plants and facilities which today are used to benefit only the ruling monopolists can also be used to benefit the masses – provided the control is taken away from private individuals and groups and placed in the hands of the working populace.

The Socialist Answer

To capitalist monopoly – its evils of imperialist war and fascism, its depressions and unemployment, its withholding of goods for inflationary price rises, its restriction of production – the only answer is socialism.

The great trusts and monopolies must be expropriated – taken away from the private interests. They must become the property of society as a whole. They must be operated under a system of planned economy and under the control of the workers themselves. Production for the profit of a few must give way to production for the needs of the many.

The end of the private profit system will be the end of private monopolies.

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