f and making
a combination of a better kind; and this rule applies to monopolies as
well as to competitors. At just the point where a competitor can gain
an advantage over rivals by modernizing his appliances, the monopoly
can make money by doing so.

An important fact is that the monopoly has as a motive the making of
profits for its stockholders. Not only is that a less powerful motive
than self-preservation, but it appeals largely to persons who are not
themselves in control of the business. Absentee ownership is the chief
disability of the monopoly. Managers may have other interests than
those of large dividend making, and in such cases a monopoly is apt to
wait too long before changing its appliances. It needs to be in no
hurry to buy a new invention, and it can make delay and tire out a
patentee, in order to make good terms with him; and this practice
affords little encouragement to the independent inventor. On the
whole, a genuine and perfectly secure monopoly would mean a certain
degree of stagnation where progress until now has been rapid.

_Why the Public depends on Competition for Securing its Share of
Benefit from Improvements._--Another question is whether the two
systems, that of competition, on the one hand, and monopoly, on the
other, confer equal benefits on the public by virtue of the
improvements they make. Competition does this with the greatest
rapidity. As we have seen, it transforms the net profits due to
economies into increments of gain for capitalists and laborers
throughout all society. The wages of to-day are chiefly the
transformed profits of yesterday and of an indefinite series of
earlier yesterdays. The man who is now making the profits is
increasing his output, supplanting less efficient rivals, and giving
consumers the benefit of his newly attained efficiency in the shape of
lower prices of goods. In practice rivals take turns in leading the
procession; now one has the most economical method, now another, and
again another; and the great residual claimant, the public, very
shortly gathers all gains into its capacious pouch and keeps them
forever.

Would a secure monopoly do something like this? Far from it. It would
be governed at every step by the rule of maximum net profits for
itself. Its output would not be carried beyond the point at which the
fall in price begins really to be costly. The lowering of the price
enlarges the market for the monopoly's product and up to a certain