Cartels as a Form of Concentration in Industry: The Example of the International Dyestuffs Cartel from 1927 to 1939

Concentration in the economy is one of those fundamental themes which need to be taken up periodically, and are. A similar process is evident in the writing of economic history.1 Helmut Arndt and Günter Ollenburg defined concentration as “a concentration of economic forces”.2 This definition was adopted by historians3 and it also forms the basis of this article. That cartelisation is closely related to concentration is stressed by all sides, but even the views on the nature of the relation diverge. Wolfram Fischer saw the degree of cartelisation between the wars as furthering concentration.4 Hans-Heinrich Barnikel also saw “cartels in all their variety and with all their surrogate forms” in one of their variants as a form of concentration.5 Hans Otto Lenel pointed out that cartels generally increase concentration.6 But from the Marxist view Helga Nussbaum reaches a conclusion that is in some ways the opposite: the merger of existing companies is prevented, while the companies in the cartel show above-average growth.7 These statements are to be examined in this article, using the dyestuffs cartel as an example. However, the main focus will be somewhat different: Lenel and Nussbaum see cartelisation and concentration as two different things, while describing one set of causes and effects. Their considerations are based on concentration of ownership, while in this article the cartel is examined as a concentration of market power, as in the above definitions. From the perspective of the buyer the concentration of market power could certainly seem the most important and relativise the differences that persisted, no matter what they were.