31: The Conspiracy of Producers

The expected behavior of producers to be competitive to one another: to make independent decisions that will result in options for the buying public. Competition creates a differentiation among similar goods, a lowering of prices to the buyer, an increase in price to suppliers, and so on. All the benefits of a free market are based on it being competitive. But things are not always thus.

It can be said that producers conspire against inventors. All of them want to have the very best machinery, and to pay as little for it as possible. This requires them to take advantage of inventors, whose interest in being paid for his invention leads him to create an artificial scarcity: he patents his idea so none may use it without permission and causes producers to bid for the work of his mind. So producers collude against inventors, seeking ways to leverage their discoveries without paying the inventor by making adjustments to differentiate "their" machines just enough to be able to avoid conflicting with a patent.

Producers also conspire against their suppliers and customers. When they enter into an agreement to sell their products at a common price, or to pay a common price for any supply, this stifles competition such that anyone who wishes to do business with them must accept their price because there is no better from another source. Naturally, that lasts until one producer sees benefit if breaking the cartel - to personally profit by breaking his agreement and offer a better price to suppliers and customers. As such, thee arrangements seldom last for very long.

Monopolies are clearly in violation of the principle of competition. A monopoly is similar to a cartel, only there is but a single supplier who sets his prices and needs to cooperation of no-one. But like cartels, monopolies are short-lived because if they are unfair, an entrepreneur will recognize the opportunity to profit by offering the public a better deal. The only monopolies that perpetuate are created by the government, by giving exclusive license to one provider and using violence to prevent anyone else from entering the market as a supplier.

There's a rather finicky section about the monopolies that naturally occur because of unique goods, which are primarily works of art. An author who writes a book has a unique product, at least in some regards, and has a monopoly over its availability to publishers. By the current arrangement of the publishing industry, it is the publisher who is most fearful of copyists as the price of his product depends on being the only source of copies of the original author's work.

Of particular interest is the value of a book as a collector's item: a first edition is printed in limited numbers to create a scarcity for those who see this as a quality they value. The fewer the number, the greater the value. Rare and antique books, of which a very few copies exist, are enormously valuable. And any unique book (though this is more common for paintings and sculptures) is of even more astronomical value.

(EN: Babbage continues with a long diversion about the publishing industry - writers, publishers, printers, and booksellers. It's a bit granular, and has little to do with the topic of this chapter ... and for that matter the chapter seems to have little to do with the topic of the book, and he does not at any point return to either.)