Exclusive Corporations

Reducing Competition through Exclusive Corporations

⁷² All corporations, and most of corporation laws, were established to prevent this reduction of price by restraining free competition.

• This price reduction would lower wages and profit.

In ancient times, only the town corporate’s authority was needed to establish a corporation. In England, a charter from the king was necessary.

• But this was really to extort money instead of defending against oppressive monopolies.

The charter was readily granted upon paying a fine to the king.

• But some craftsmen or traders incorporated into adulterine guilds without a charter.
  • These were disfranchised but were obliged to pay a fine annually to the king for permission to exercise their usurped privileges.

The immediate inspection of all corporations, and their by-laws, belonged to the town corporate where they were established.

• Their discipline came from that greater incorporation, not from the king.

⁷³ The government of towns corporate was in the hands of traders and craftsmen.

It was their interest to always keep it understocked with their own work. Each class was eager to establish regulations for this purpose. Each consented that every other class do the same.

Each was obliged to buy goods from every other class within the town at a higher price than usual.

In recompence, they were enabled to sell their own just as dearer. None of them were losers by these regulations.

They were all great gainers in their dealings with the countryside.

• Those dealings enriched every town.

⁷⁴ Every town draws its whole subsistence from the countryside. It pays for these in 2 ways:

1. By sending back some manufactured goods to the countryside

The price of such goods is increased by:

• the wages of the town’s workers and
• profits of their employers.

2. By sending to the countryside some of the raw produce and manufactured goods of other provinces

The price of such produce and goods are increased by:

• the wages of the transporters and
• the profits of the merchants who employ them.

Wages and profits make up the gain of both.

The regulations which unnaturally increase those wages and profits enable the town to buy more of the produce of the countryside’s labour with fewer of the produce of the town’s labour.

They give the town’s traders and craftsmen an advantage over the landlords, farmers, and labourers in the countryside.

They break down that natural equality of commerce between them. The whole produce of the labour of society is divided between the people of the town and those of the countryside. By those regulations, a greater share of it is given to the town and a less to the countryside.

⁷⁵ The amount of goods annually exported from the town is the price which it really pays for the materials it annually imports.

The dearer its exports, the cheaper its imports. The industry of the town becomes more advantageous than that of the countryside.

⁷⁶ Everywhere in Europe, the industry of towns is more advantageous than the industry of the countryside.

This is proven by a simple observation, without the need to enter into any computations.

In every European country, we find at least 100 people who grew rich from small beginnings by trade and manufactures or the industry of towns, for one who has done so by agriculture or the industry of the countryside.

Wages and profits must evidently be greater in towns than in the countryside.

Since stock and labour naturally seek the most advantageous employment, they naturally go to the town and desert the countryside as much as possible.

⁷⁷ The townspeople, being collected into one place, can easily combine.

The most insignificant trades in towns have been incorporated. The symptoms of the corporation spirit are:

• the jealousy of strangers
• the aversion to take apprentices
• the aversion to communicate the secret of their trade

Such spirit prevails in insignificant trades. It teaches them, by voluntary associations and agreements, to prevent that free competition which their by-laws cannot prohibit.

• The trades with a few workers easily encounter such combinations.

Half a dozen wool-combers might be necessary to keep 1,000 spinners and weavers at work. If those wool-combers combine not to take apprentices, they can:

• engross the employment
• reduce the whole manufacture into slavery to themselves
• raise the price of their labour unnaturally.