What Makes for Real Prosperity?

The Small Businessman and Regulatory Discontent

Supreme Court Justice Rufus Peckham put it best, in the Trans-Missouri Freight Association decision in 1897.  Broadly interpreting the Sherman Antitrust Act as a means to reign in large economic organizations that had spun out of control, Peckham acknowledged that bigger businesses, because of economies of scale, could occasionally reduce prices to consumers.  He went on to state that 

Trade or commerce under those circumstances may nevertheless be badly and unfortunately restrained by driving out of business the small dealers and worthy men whose lives have been spent therein, and who might be unable to readjust themselves to their altered surroundings.  Mere reduction in the price of the commodity dealt in might be dearly paid for by the ruin of such a class.  

Worse, it was in the power of any “combination of capital” in control of a commodity to raise the commodity’s price after it had driven its smaller competitors out of business, and, even though those driven out of business by trusts and others might eventually find employment with them, this was not good for the nation.  “[I]t is not for the real prosperity of any country,” Peckham warned, 

that such changes should occur which result in transferring an independent business man, the head of his establishment, small though it might be, into a mere servant...

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