CHAPTER II.
THE NEW CAPITALISM President Taft says that if we cannot restore competition, "we must proceed to State Socialism and vest the government with power to control every business." As competition cannot be revived in industries that have been reorganized on a monopolistic basis, this is an admission that, in such industries, there is no alternative to "State Socialism." The smaller capitalists and business interests have not yet reconciled themselves, any more than President Taft, to what the Supreme Court, in the Standard Oil Case, called "the inevitable operation of economic forces," and are just beginning to see that the only way to protect the industries that remain on the competitive basis is to have the government take charge of those that have already been monopolized.

But the situation in Panama and Alaska and the growing control over railroads and banks show that the United States is being swept along in the world-wide tide towards collectivism, and innumerable symptoms of change in public opinion indicate that within a few years the smaller capitalists of the United States, like those of Germany and Great Britain, will be working with the economic forces instead of trying to work against them.

Monopolies, they are beginning to see, cannot be destroyed by private competition, even when it is encouraged by the legislation and the courts, and must be controlled by the government.
But government regulation is no lasting condition.

If investors and consumers are to be protected, wage earners will most certainly be protected also--as Mr.Roosevelt advocates.

And from government control of wages, prices, and securities it is not a long step to government ownership.
The actual disappearance of competition and the growing harmony of all the business interests among themselves are removing every motive for continued opposition to some form of State control,--and even the more far-sighted of the "Captains of Industry," like Judge Gary of the Steel Corporation and many others, are beginning to see how the new policy and their own plans can be made to harmonize.