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the importance of the big versus the small, of which the preceding point is only a particular manifestation. Finally, the main characteristic of our society is taken to be its industrial character. This leads to overemphasis of the manufacturing sector of the economy, which accounts for only about one-quarter of output or employment. And monopoly is far more prevalent in manufacturing than in other sectors of the economy. |
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The over-estimation of the importance of monopoly is accompanied, for much the same reasons, by an over-estimation of the importance of those technological changes that promote monopoly by comparison with those that extend competition. For example, the spread of mass production has been greatly stressed. The developments in transportation and communication that have promoted competition by reducing the importance of local regional markets and widening the scope within which competition could take place have been given much less attention. The growing concentration of the automobile industry is a commonplace; growth of the trucking industry which reduces dependence on large railroads passes with little notice; so does the declining concentration in the steel industry. |
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2. Monopoly in Labor There is a similar tendency to overestimate the importance of monopoly on the side of labor. Labor unions include roughly a quarter of the working population and this greatly overestimates the importance of unions on the structure of wages. Many unions are utterly ineffective. Even the strong and powerful unions have only a limited effect on the wage structure. It is even clearer for labor than for industry why there is a strong tendency to overestimate the importance of monopoly. Given a labor union, any wage increase will come through the union, even though it may not be a consequence of the union organization. The wages of domestic servants have risen very greatly in recent years. Had there been a union of domestic servants, the increase would have come through the union and would have been attributed to it. |
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This is not to say that unions are unimportant. Like enterprise monopoly, they play a significant and meaningful role making many wage rates different from what the market alone would establish. It would be as much a mistake to underestimate |
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