Cartel Theory and Cartel Practice: The Case of the International Aluminum Cartels, 1901–1940

Abstract

The study of cartels is important to economists as well as business historians, but, on the whole, there has been little cross cultivation between the two academic fields. This article examines cartel theory developed by economists in the context of the historical case of international aluminum cartels in existence before 1940. By analyzing three basic theoretical questions—when cartels appear, when they break down, and when they are successful—in light of the empirical evidence of the aluminum industry, the article argues that economics and history, although they have very different approaches, can profit from using each other's methods when studying cartels.

Commodity Markets: Evolution, Challenges, and Policies

“…In 1926, the European companies signed an agreement, but Alcoa stayed out because it was under antitrust scrutiny. The company spun off its non-U.S. holdings to its Canadian affiliate Aluminum Limited (later Alcan), and in 1931 Aluminum Limited joined the European companies to form a Swiss holding company, the Aluminum Alliance Company (Storli 2014). The aim was to allocate output during the Depression, which required the company to purchase excess stocks.…”

Behind the ‘tartan curtain’: Cartelisation in the Scotch Whisky Industry, 1830–1960

“…These hint at the contested and complex nature of defining cartels, as well as the shifting rhetoric and political acceptability of cartelization. Meanwhile Storli (2014) cited Debora Spar's identification of five structural factors motivating cartel formation: high concentration of production, high barriers to entry, a small fringe, non-substitutability, and non-differentiation (1994, p.449). These extant characterisations are reflected upon in the motivations and form of the historical evolution of cartelisation in Scotch whisky.…”

Business-government relations and national economic models: A review and future research directions in varieties of capitalism and beyond

“…As Shanahan and Fellman observe, these do not conform to existing, typically static, VoC conceptual frameworks, due to their dynamic and changing nature. Similarly, their article throws into relief questions of how multinationals working across national economic systems fit into such static conceptualisations, raised within the 2010 roundtable, as a number of single transnational and historical industry studies have sought to show in relation to cartels (Storli, 2014;Ingulstad et al, 2014;Bertilorenzi, 2015).…”