< previous page page_131 next page >

Page 131
cussed above have been one source. Legislation granting special immunities to labor unions, such as exemption from the anti-trust laws, restrictions on union responsibility, the right to appear before special tribunals, and so on, are a second source. Perhaps of equal or greater importance than either is a general climate of opinion and law enforcement applying different standards to actions taken in the course of a labor dispute than to the same actions under other circumstances. If men turn cars over, or destroy property, out of sheer wickedness or in the course of exacting private vengeance, not a hand will be lifted to protect them from the legal consequences. If they commit the same acts in the course of labor dispute, they may well get off scot free. Union actions involving actual or potential physical violence or coercion could hardly take place if it were not for the unspoken acquiescence of the authorities.
3. Private Collusion The final source of monopoly is private collusion. As Adam Smith says, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."3 Such collusion or private cartel arrangements are therefore constantly arising. However, they are generally unstable and of brief duration unless they can call government to their assistance. The establishment of the cartel, by raising prices, makes it more profitable for outsiders to enter the industry. Moreover, since the higher price can be established only by the participants' restricting their output below the level that they would like to produce at the fixed price, there is an incentive for each one separately to undercut the price in order to expand output. Each one, of course, hopes that the others will abide by the agreement. It takes only one or at most a few "chiselers"who are indeed public benefactorsto break the cartel. In the absence of government assistance in enforcing the cartel, they are almost sure to succeed fairly promptly.
The major role of our antitrust laws has been to inhibit such private collusion. Their main contribution in this respect has been less through actual prosecutions than by their indirect effects. They have ruled out the obvious collusive devicessuch
81d3081033f7707aa095f6df85bbc6c9.gif 81d3081033f7707aa095f6df85bbc6c9.gif
3The Wealth of Nations (1776), Bk. I, chap. x, Pt. II (Cannan ed. London, 1930), p. 130.

 
< previous page page_131 next page >