Thursday, 1 August 2013

Let's talk about cartels

By Tim Worstall

We generally think that cartels are a bad idea: they're one of those conspiracies against the public that happen when businessmen meet together for pleasure and the like. There have been though those who insist that cartels are just absolutely great. They ensure decent profits for investors and unions can also claim a share of those profits in the form of "good jobs at good wages". Monopolies are just an extreme form of that cartel idea of course, where the cartel is within one firm. And the people who think that those cartels are a great idea really do scan the ideological spectrum. It's implicit in Fascist economics, such as there is an economics of fascism. It's what Roosevelt tried to do with the National Recovery Act (no, I am not trying to state that Roosevelt was a fascist, only that in his approval of cartels he had a similar policy to one followed by Mussolini et al) and it's implicit in all those calls for nationalised industry in Dear Old Blighty, where we can go back to the unions extracting some percentage of the monopoly profits for the labour force.

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