The constructive idea behind a policy of the recognition of semi-monopolistic corporations, is, of course, the idea that they can be converted into economic agents which will make unequivocally for the national economic interest; and it is natural that in the beginning legislators should propose to accomplish this result by rigid and comprehensive official supervision.  But such supervision, while it would eradicate many actual and possible abuses, would be just as likely to damage the efficiency which has been no less characteristic of these corporate operations.  The only reason for recognizing the large corporations as desirable economic institutions is just their supposed economic efficiency; and if the means taken to regulate them impair that efficiency, the government is merely adopting in a roundabout way a policy of destruction.  Now, hitherto, their efficiency has been partly the product of the unusual freedom they have enjoyed.  Unquestionably they cannot continue to enjoy any similar freedom hereafter; but in restricting it care should be taken not to destroy with the freedom the essential condition of the efficiency.  The essential condition of efficiency is always concentration of responsibility; and the decisive objection to government by commission as any sufficient solution of the corporation problem is the implied substitution of a system of divided for a system of concentrated responsibility.

This objection will seem fanciful and far-fetched to the enthusiastic advocates of reform by commission.  They like to believe that under a system of administrative regulation abuses can be extirpated without any diminution of the advantages hitherto enjoyed under private management; but if such proves to be the case, American regulative commissions will establish a wholly new record of official good management.  Such commissions, responsible as they are to an insistent and uninformed public opinion, and possessed as they inevitably become of the peculiar official point of view, inevitably drift or are driven to incessant, vexatious, and finally harmful interference.  The efficient conduct of any complicated business, be it manufacturing, transportation, or political, always involves the constant sacrifice of an occasional or a local interest for the benefit of the economic operation of the whole organization.  But it is just such sacrifices of local and occasional to a comprehensive interest which official commissions are not allowed by public opinion to approve.  Under their control rates will be made chiefly for the benefit of clamorous local interests; and little by little the economic organization of the country, so far as affected by the action of commission government, would become the increasing rigid victim of routine management.  The flexibility and enterprise, characteristic of our existing national economic organization, would slowly disappear; and American industrial leaders would lose the initiative and energy which has contributed