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Confusion about Cartels
This Committee has asked that I discuss cartels.
First, as I see it, we should determine just what we mean by
a cartel. The Germans employed cartels as an instrument of
economic warfare, which was what they did with every aspect of
the German economy. Soviet Russia is an example of a completely
cartelized state -- only one buy er, only one seller -- the
government. Within the British Empire, trade preferences or
sterling bloc restrictions can accomplish the same effects as
cartels; so can import and export quotas, compensatory pay-
ments, currency depreciations, wage reductions or a lengthening
of hours. The last two are more disintegrating, Cartels are
established for the purpose of advantage to those engaged in
them but these advantages can be obtained in many different ways.
Are all cartels bad? Or are there good cartels as
well? Is all competition good, no matter how destructive in
result? Shall we return to the unrestricted jungle law of tooth
and fang? We have legislated for both sides of the argument.
We have anti-trust laws and we have laws and commissions which
seek to restrain competitive practice.
Some Competition Bad
In stabilizing farm prices, our government year after
year approves cartel-like practices and I think you gentlemen
will agree with me that it is a good thing. I have always felt
that in any area where competition becomes so disruptive as to
hurt the general good, the government was duty-bound to correct
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"ocrText": "-20-\nConfusion about Cartels\nThis Committee has asked that I discuss cartels.\nFirst, as I see it, we should determine just what we mean by\na cartel. The Germans employed cartels as an instrument of\neconomic warfare, which was what they did with every aspect of\nthe German economy. Soviet Russia is an example of a completely\ncartelized state -- only one buy er, only one seller -- the\ngovernment. Within the British Empire, trade preferences or\nsterling bloc restrictions can accomplish the same effects as\ncartels; so can import and export quotas, compensatory pay-\nments, currency depreciations, wage reductions or a lengthening\nof hours. The last two are more disintegrating, Cartels are\nestablished for the purpose of advantage to those engaged in\nthem but these advantages can be obtained in many different ways.\nAre all cartels bad? Or are there good cartels as\nwell? Is all competition good, no matter how destructive in\nresult? Shall we return to the unrestricted jungle law of tooth\nand fang? We have legislated for both sides of the argument.\nWe have anti-trust laws and we have laws and commissions which\nseek to restrain competitive practice.\nSome Competition Bad\nIn stabilizing farm prices, our government year after\nyear approves cartel-like practices and I think you gentlemen\nwill agree with me that it is a good thing. I have always felt\nthat in any area where competition becomes so disruptive as to\nhurt the general good, the government was duty-bound to correct"
}