normal and right condition of trade.  Yet there are some men interested in “large business” who look upon competition as bad, and upon monopoly as having essentially the nature of friendly cooeperation.  The roots of these opinions, or prejudices, are easily discoverable in the theoretical study of the nature of monopoly.[1] Yet often different men or groups of men feel so strongly on this matter, viewing it from their own standpoints, that they are quite unable to understand how any one else can feel otherwise.  There is thus a great deal of controversy to no purpose.

Sec. 2. #Public character of private trade.# Any such general judgment as that of the public, tho it may be mistaken in some details, is likely to be a resultant of broad experience.  There is in competitive trade a public, a social character, which monopoly destroys.  Even in a simple auction, when the bidding is really competitive, price depends far less on shrewd bargaining, on bluff, or on stubbornness, than is the case in isolated trade.  Each bidder is compelled by self-interest to outbid his less eager competitors, and thus the limits within which the price must fall are narrowly fixed.  The auction-sale is less a purely personal matter, takes on a more public aspect, has a more socialized character than isolated trade, depends more on forces outside the control of any one man, and results in a price fixed with greater definiteness.  The price in a more developed market results from the play of impersonal forces, or at least from the play of personal forces which have come under the rules of the market.[2] This price men are ready to accept as fair.  It has a democratic character, whereas the gains of monopoly price arouse resentment as being the work of personal, and felt to be despotic, power.  Monopoly price is a bad price to the one who pays it, not only because it is a high price but because it bears the character of personal extortion.

The medieval notion of justum pretium, the just price, may have been often misapplied, and it was often criticized and ridiculed by economists in the period of idealized competition (from Adam Smith to John Stuart Mill).  But at the heart of the notion was the judgment that general uniform prices fixed in the open market are the proper norms for prices when one of the traders is caught at an exceptional disadvantage.  The modern world has been compelled to reexamine the conception of the just price.

Sec. 3. #Evil economic effects of monopolistic price.# Theoretical analysis confirms this view.  Any exercise of monopolistic power over price keeps some, the weaker bidders, from getting any of the desired goods, or limits them to their most urgently desired units.  What may be called “the theoretically correct price"[3] with two-sided competition is the one that permits the maximum number of trades with a margin of gain to each trader.  In narrowing the possibility of substitution of goods by trade,