For this observer, who has been looking in from the outside of cartel research for almost three decades, this book comes as a bit of a surprise. Here we get A History of Business Cartels rather than The History of Business Cartels, a book that opens up and broadens the field of cartels rather than makes conclusions based on previous research. Cartels, or those I thought I needed to care about, had their heyday in the interwar period, and they flourished because of economic challenges and nationalist policies. A particularly interesting subset for those of us who studied capital-intensive companies were the international cartels studied by Harm Schröter and others. This book widens the scope in time and space, going into an array of national and international cartels that sometimes were born and functioning well after World War II and that perceived march onward toward free trade and the strict rule of competition.
The book brings cartels into the discussion of what capitalism is all about. National and international cartels have been much more frequent and normal than we have been led to believe (we have had impressive numbers previously, but not so much the numerous diverse illustrative cases we get here). The typical cartel has been started by the companies themselves, but we find governments and the League of Nations as constructors, acceptors, and users of cartels. It is food for thought that pre-1940 actors and scholars argued that the rise of administrative science and economic planning—usually associated with big companies and state planning—also facilitated cartels. Indeed, and a point the editors could have made in their attempt to look at cartels as actors, cartels have purpose and are an additional layer of economic coordination that recalls Alfred Chandler’s famous term for the economic role of big business: the Visible Hand. Unlike Chandler’s visible hand of American managerial capitalism, cartels are coordinated but hardly in a visible manner, and their roles are—more often than not as I read these chapters—not performing according to one set script or one best way. Cartels are exceptional arrangements catering to specific circumstances, yet they seem so frequent that one has to ask how something so transient could be so common.
One answer may emerge from this book and its intent: cartels have functions far beyond profit maximization, market control, and corporate stability in times of crises—dimensions that usually are seen as their main purpose. Shanahan and Fellman argue in their introduction that studies of cartels over the last decades have become too narrow and too preoccupied with their internal workings. This book is an attempt to broaden the perspective in our understanding of them. Shanahan and Fellman write:
We contend that it is cartel behavior—their actions—more than their structure that is important when trying to identify their influence. … We suggest a return to studies that look more at the linkages between cartels and their environments including cartels and their linkages to financial institutions; cartels and their links to international agreements and government objectives (p. 2).
They give us 15 case studies covering 20 countries, and this reader is impressed by the diverse body of evidence. By focusing on their functions and actions, each and every cartel comes across as particular. To some extent, this may be a consequence of the book not being very tightly edited, but I remain convinced of how intertwined these cases are in national circumstances and international arrangements of quite specific nature. As concluded by Elina Kuorelahti in her case of the European timber cartel of the 1930s: “The largest supplier is not always top dog in international cartel negotiations—something that cartel theories suggest. When the diplomatic and trade political game affected the cartel negotiations, small countries remained small no matter how much they produced a certain commodity” (p. 199). Indeed, commodification is part of the substory here, as many of the cases relate to nations on the periphery of the wealthy and populous countries and their national challenges.
I find the book both highly interesting and important, for reasons already explicated. I can, however, see why others would be more critical. The editors could have done more to frame the project and distillate some of the findings. I like in one respect that I (had to) read the book to gather a coherent understanding by myself, but I also noticed that each of the 17 chapters started from scratch, and that commanded a lot from me as a reader. I needed to use a little effort to catch the inner logic of the numerous chapters, and the book’s four parts could have benefitted from introductions and conclusions. The main conclusion is short and concentrates on how current affairs might learn from history without much effort to bring into that discussion the diverse experiences of these cases. I therefore hope the editors will write an article giving their own summation. They are well positioned to do that, and my guess is that they are stimulated by this project to continue their research on cartels.
Professor Sogner is the author of several works, including, most recently, Norway’s Pharmaceutical Innovation: Pursuing and Accomplishing Innovation in Nyegaard & Co., 1945–1997 (2022).
