Destructive  Competition — Injury  to  Industry

We  seldom  hear  of  the  business  failures  which  result
from  price  warfare.  It  is  a  great  deal  like  the  news  that
we  get  about  dealings  in  stocks;  the  man  who  makes  money
is  always  ready  to  talk  about  it.  The  statement  that  business
failures  eliminate  the  unfit  may  be  true  in  some  cases  but
it  sounds  too  much  like  the  old  Spartan  method  which  prac-
ticed the  killing  of  all  children  who  appeared  to  be  physically
unfit.
Just  as  the  principles  of  eugenics,  that  deal  with  the  cause,
are  more  practical  than  this  Spartan  method  of  dealing
with  the  effect,  so  the  principles  of  co-operation  are  much
better  for  helping  new  and  smaller  companies  to  get  on  their
feet  than  the  theory  of  killing  them  off  through  destructive
competition.  If  business  failures  were  the  result  solely  of
incapacity  the  rule  of  the  survival  of  the  fittest  might  be
justified,  but  bankruptcy  too  often  is  not  a  reflection  of  in-
capacity but  rather  of  financial  weakness.
Moreover,  while  the  concern  that  is  least  able  to  with-
stand the  ravages  of  destructive  competition  may  be  the  first
to  succumb,  every  business  failure  within  an  industry  is  a
blow  to  that  whole  industry  because  competition  which  brings


COMPETITION    AND    CO-OPERATION  31

out  failures  often  kills  off  the  strong  as  well  as  the  weak
through  a  blind  disregard  for  their  relations.  In  the  industry
the  small  producer  is  often  just  as  necessary  a  link  in  the
chain  as  a  large  producer,  and  since  a  chain  is  no  stronger
than  its  w-eakest  link,  the  weak  may  cause  the  downfall  of
the  strong.
