CARTELS AS INSTRUMENTS OF INTERNATIONAL ECONOMIC ORGANIZATION

Publication Date01 Jul 1945
AuthorF. E. Koch
DOIhttp://doi.org/10.1111/j.1468-2230.1945.tb02706.x
I30
MODERN
LAW
REVIEW
Jul;!,
1945
does not correspond with the realities it is supposed to deal with, idealists
are always encouraged by the hope that facts will be adapted to the law,
realists by the belief that
law
will be adapted to the facts. In the occu-
pied Rhineland, the realists triumphed over the idealists.” But
at
a
great
cost
in missed opportunities. The opportunities of the next years are not
the same, but they are fundamentally similar; and in order that they
may
not
again be lost, those responsible for policy, and those charged with
its
execution. might well do worse than to make
Mr.
Fraenkel’s book
a
vade-mecum.
R.
S.
T.
CHORLEY
CARTELS AS INSTRUMENTS
OF
INTERNATIONAL ECONOMIC
ORGANIZATION
PUBLIC
AND
PRIVATE LEGAL ASPECTS
OF
INTERNATIONAL CARTELS
I
ISING standards
of
living, full employment, social security
and economic development” are the social objectives
of
the
R
post-war world1 and
it
is generally recognised that “the
fullest collaboration between all nations in the economic field will be
essential to this achievement.”i
The general acceptance of these
“five
major objectives of post-war
preparation and planning
does not imply acceptance of any particular
methods for their achievement. This applies especially to International
Cartels which, in the past, have been important instruments
of
economic
co-ordination. International Cartels have been the object
of
widely
differing opinions since the very beginning
of
their activities. While
they are hailed by some
as
the pillars of international economic
co-operation, they are condemned by others
as
social evils which must
be destroyed in the post-war world.
In order to find
out
whether and
on
what conditions international
cartels are acceptable as instruments
of
international economic collabor-
ation, it is necessary to analyse their economic and public and private
legal aspects.
International cartels are cartels either between Governments
or
between private parties which do not belong to one and the same
1
International Labour
Otfice.
The
Common
Iitiersst
ivt
Iniernalional
Econonizc
Organisation
by
J.
B.
Condlr.‘fe and
A.
Stevenson, hlontreal,
1944.
(subs.
cited
as
Condli’c)
p.
126.
a
Ibid.,
p.
7,
and
Ailantic
Charter.
CARTELS
131
country, or between both Governments and private parties. Private
parties may be individual enterprises or cartels3
Cartels belong to one
of
several types of industrial or commercial
combinations whose “main object is to replace individual and com-
pletely free competition by a collective organisation intended to regulate
and rationalise production and to influence prices with
a
view to their
stabilisation.”4 They are contractual agreements between independent
undertakings (individuals or firms or associations or companies) in
the same or similar branches of indu~try.~
The legal form of
a
cartel may
be
that
of
simple tacit agreements,
of gentlemen’s agreements, or of a proper contract, or again it may be
that of an association or a company with a separate legal personality.
Such agreements are concluded “for a specified or unspecified period
between a certain number of hitherto competing firms which agree,
for example, to fix their quotas of production, delimit their respective
markets
either in the home country or
on
the export market, regulate
market zones and selling prices, communicate to each other new
processes, standardise types of manufacture, make uniform terms for
the purchase
of
raw materials or the sale of finished products or, again,
to
restrict certain special factories to specified manufactures with
a
view to eliminating unnecessary transport and reducing cost of
production.
‘’6
Cartel agreements are obviously in restraint of trade. Restrictions
of freedom of trade are their purpose and the very foundation of their
existence. The laws
of
different countries differ in their attitude as to
whether and
on
what conditions cartels are to be recognised as legiti-
mate means of concerted economic action or
to
be regarded as an
illegal conspiracy and therefore null and void or even punishable.’
The legal aspect of cartels varies with the economic views and position
held by the legislative powers of the respective state.
It
is evidently not within the province of the lawyer as such to take
sides
in
the discussion about the economic effects of cartels, whether
they are beneficial or detrimental to the community
of
consumers, and
whether they should be encouraged or exterminated. It will, however,
be necessary to consider very carefully if this question arises at all.
If
it did arise in this form and had to be answered by a death sentence
Tagung der
International Law Association
in
Budapest,
1934,
in
Kartell-Rundschau, Berlin,
1934, pp. 579
ff.;
The International Business
ConJerence.
Rye, New York. 1944.
,loinl
Reporf
of
the
British
Delegations,
p. 4.
Must
American
Business Join in International Cartels,” in
Harper’s Magazine,
Nov.. 1944.
*
League
of
Nations, Economic arid Financial Section.
Review
of
the Legal
A
spects
of
Indusfrial Agreements.
Prepared for the Economic Committee
by
Decugis (France), Olds
(U.S.A.)
and Tschierschky (Germany). Geneva 1930,
p.
5.
League
of
Nations; General Report
on
the
ECO?KWI~C
:lspecfs
of
Infernational
Indusfvial ,Agreements.
Prepared for the Economic Conferctlce by Benni (Italy),
Lammers (Germany), Marlio (France), and Meyer (1,uxcniburg). Geneva, 1931,
Review o/fhe
Legal
Aspects
o/Indusfrial
Agreet?ients,
etc.
(see
footmite
4).
p.
b,
Cf.
on
Rule
o/
Reason, ibid.,
pp,
93
ff.;
Koch.
Grt6nd:iigc
lip.$
eu,nlisclrrrr
Karfellrerhfs.
1927,
pp.
14
ff.;
Nevietu
o/
the
I.rgol
.-lbpecfs,
etc.. which gives
a
survey of various national cartel laws.
Callmann.
Die Lage der infernafionalen Kartelle
auf
der
38.
Milo Perkins.
pa.

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