the scale, in such industriea as rallroadliig, monopoly manageineiit, more or lew anqoAUSed, Is Iftlily UDftTOldabto,
THE THEORY OF MODERN WELFARE 261
making it possible to regulate output and prices, but also by the economies which are made practicable on this footing. Coalitions of a less comprehensive character, as spoken of above, also eflfect economies in the cost of production. But the larger coalitions which bring the business to a monopoly basis have not only the advantage which comes of the large-scale organization of the industrial process, but they also enjoy peculiar advantages in the matter of cost, due to their monopoly position. These added advantages are more particularly advantages in buying or bargaining for all goods, materials, and services required, as well as in selling the output. So long as the coalitions are not comprehensive enough effectually to eliminate competition, they are constrained to both buy and sell in competition with others. But when the coalition comes effectually to cover its special field of operation, it is able, not only to fix the prices which it will accept {on the basis of what the traffic will bear), but also in a considerable measure to fix the prices or rates which it will pay for materials, labor, and other services (such as transportation) on a similar basis, — unless it should necessarily have to do with another coalition that is in a similar position of monopoly,