cartel(redirected from Cartels)
Also found in: Dictionary, Thesaurus, Legal, Financial.
See E. Kefauver, In a Few Hands (1965); H. Kronstein, The Law of International Cartels (1973); J. Hobson, Cartels, Trusts, and the Economic Power of Bankers, Financiers, and Money-Moguls (1985).
a form of monopolistic agreement among companies, usually belonging to one economic sector, for the purpose of extracting monopolistic profits through quotas regulating the volume of production and of products marketed for all its basic participants. One of the forms of cartel agreements is the syndicate. The development of cartel agreements has also involved partial exchange of commercial information, standardization of accounting, and the organizing of patent pools for joint purchase and use of patents. In the cartel, as in any form of monopolistic practice, capitalist efficiency and technical progress are intertwined with elements of stagnation and decay. In the present-day scientific and technical revolution, however, the cartel is the most flexible form of monopoly concentration, and this fact has determined certain characteristics of its development.
Cartels arose at the end of the 19th century as a result of the concentration of production and the centralization of capital. In the first half of the 20th century they became particularly widespread in Germany. The American antitrust laws prohibited the monopolization of particular spheres of business activity, above all the formation of cartels. This legislation accelerated the process of mergers and absorption and the formation of holding companies and other developed forms of monopolistic concentration. In those sectors lacking an appropriate level of production concentration for the appearance of monoplies, cartels continued to exist in disguised form.
In the mid-1950’s and early 1960’s domestic cartels developed in the Western European countries. During these years laws were passed making the registration of cartels compulsory. The purpose of such legislation was to foster monoplization on the basis of more rapid concentration of production. Although state registration does impose a number of limitations on the preservation of old cartels and the formation of new ones, this form of monopolization became widespread in Western Europe. In Great Britain, where registration of cartels was made compulsory in 1956, 2, 240 applications had been submitted by the end of 1958. In the Netherlands the new law went into effect in 1958, and 1, 133 cartels were registered by the beginning of 1960. In 1960 there were 925 cartels in Sweden; in 1958, Denmark had 925. In West Germany and Japan, where more rigid restrictions have been instituted, the number of officially registered cartels is much smaller. Along with the domestic cartels many international ones have arisen in the 20th century, especially in the world capitalist markets for raw materials and intermediate goods.
Under present conditions, with a high level of concentrationof production and capital, most of the developed capitalist coun-tries are witnessing the rise of various forms of agreementsamong large companies, based on such factors as “mutual under-standing,” knowledge of the market, mutual observance of unstated quotas, and hidden agreements on price changes. These agreements are more effective than the old cartels in ensuring a monopoly in the market; unlike the old cartels, which regulated the marketing practices of numerous medium-size and small companies, the new arrangements guarantee a monopoly for a few large sellers. Cartels are now being supplanted by combinations known as conglomerates, which are built on a production and scientific-technical basis and incidentally perform cartel functions.
IU. B. KOCHEVRIN