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A compulsory cartel or forced cartel is a cartel that is established or maintained by an administrative order or by a legal directive. The interference of policies on these associations of entrepreneurs of the same trade varied. It ranged from a mere decision to establish a cartel or to maintain an existing one, to a strict state control. [1]
The understanding of “compulsory cartels” as “cartels” has always been disputed. [2] While the older cartel experts before the 1930s usually insisted in the free entrepreneurial will that constituted a “cartel”, later authors were more tolerant and accepted forced cartels as an exception. In recent times (2007), the economic-historian Jeffrey R. Fear took this stance of the “exception to the rule” that would not contradict the general nature of these organizations. [3] The cartel-historian Holm Arno Leonhardt has positioned himself more differentiated in 2013: Forced cartels that were embedded in a totalitarian planning economy or were by other means unable to realize their own will, should be regarded as organs or appendages of another system. [4] Thus, “compulsory cartels” without a permanent political influence could indeed constitute real “cartels”, while others being under strict control acted mainly as servants of an alien will.
A compulsory cartel is a group of businesses that collude together with the government to limit competition within an industry or market, by installing a cartel agreement, which is directly or indirectly enforced by the government. The cartel agreement regulates the means of production or the distribution of goods and services in a goods and services category (market segment), which is a form of economic interventionism. For example, a directly enforced cartel of workers is created when a minimum wage is established by law, which eliminates the market economy only to workers with a productivity below the minimum wage, like starters.
There are also cartels that eliminate the market economy for a category of goods or services. An example is the corona vaccination program in The Netherlands. The government may sets a mandatory basic health care 'insurance' policy implementing a Marxist egalitarian distribution of medical goods and services according to a necessity scheme. An example is the British NHS. But a market economy in healthcare was maintained that implicitly makes the patients to renounce NHS health care, when contracting for private health care. No market economy for basic health care insurances and basic medical goods and services was ultimately left in the Dutch healthcare system which is a form of 'welfare-state capitalism'. These insurance companies are privately owned and receive enormous amounts of tax money from the government as part of the 'cartel agreement' that resulted in the creation of the public insurance cartel and the health care provider cartel.
Note that the former cartel has to accept all patients and competes to reduce spending on reimbursements, which can be achieved when the later cartel becomes subject to a cartel agreement negotiated between the insurance companies and the health care providers. This agreement resulted in the elimination of a market economy in health care goods and services distribution, i.e. patients cannot buy health care, including preventive healthcare like blood tests, colonoscopies and MRI scans. In this case the cartel agreement was the indirect result of regulation and set by the insurance cartel instead of directly by the government.
The Dutch medical welfare state cartel is an example of a welfare state cartel that eliminated the market economy. In the spirit of Milton Friedman, economic totalitarianism is the elimination of the market economy, in goods and services category, by state regulation and against the free-market. [5]
'Economic totalitarianism' is a term used by Milton Friedman in Capitalism and Freedom :
History suggests only that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition. Fascist Italy and Fascist Spain, Germany at various times in the last seventy years, Japan before World Wars I and II, tzarist Russia in the decades before World War I -- are all societies that cannot conceivably be described as politically free. Yet, in each, private enterprise was the dominant form of economic organization. It is therefore clearly possible to have economic arrangements that are fundamentally capitalist and political arrangements that are not free. Even in those societies, the citizenry had a good deal more freedom than citizens of a modern totalitarian state like Russia or Nazi Germany, in which economic totalitarianism is combined with political totalitarianism. Even in Russia under the Tzars, it was possible for some citizens, under some circumstances, to change their jobs without getting permission from political authority because capitalism and the existence of private property provided some check to the centralized power of the state. - Friedman, 1962
A money or banking cartel is usually enforced by legal tender laws and anti money-laundering (AML) and counter terrorism financing (CTF) regulation. For example, in the Netherlands, the Dutch AML law bans any cash transactions above 3000 euros. A further development of the banking and money cartel are the Central bank digital currency's (CBDC). Online banking being already digital, CBDC's distinguish in their ability to control users, to make it easier for state's to stop financial transactions and to fight crime.
The monopoly on violence or force (MOF), defined as a (sovereign) states ban on the use of physical force by natural persons outside of another states territory and excluding agents of another state e.g. legitimately defending soldiers of another state. The MOF doctrine denies natural persons fundamental rights, ultimately because it denies the right to self-defense of inhabitants, also characterized as the right to resist, right to revolution or right to revolt. Human rights are not actually fundamental rights because they are inter partes law (treaties) and not erga omnes, and according to the MOF cannot directly be enforced by natural persons. The non-aggression principle (NAP) is often formulated as the right to do whatever with your property (sovereign territory), except aggression defined as the initiation of the 'application or threat' of 'physical force or fraud (contract breach)'. Within the NAP, the installation of a violence ban on property by the owner is not a MOF, because the rule would cease to hold when aggression is applied by the owner.
So, assuming the NAP, the usage of non-aggressive physical force defense is allowed. So natural persons do have the right to self-defense against a government that initiates force. The state, in the statist definition, is a government that has the right to initiate force against natural persons outside the borders of other states. [6] States usually do acknowledge a ban on aggression against other states. The monopoly on violence is also characterized by the right to ultimate arbitration, also called jurisdiction, in disputes with natural persons, because if the state holds the MOF then it will under no circumstances deprive itself from its inviolabilities, i.e. the laws it created, and if the state holds jurisdiction its judges can decide so. Examples of such disputes are (a) the state violates the law that binds itself (fraud), e.g. a coup d'etat or (b) the state invades (phsycal force) the property of settlers outside territories owned by other governments or natural persons. In such cases the state can rule in favor if itself, and usually will if it would be in jeopardy otherwise. This is usually accepted by other states because they acknowledge the monopoly on violence and reject the NAP. According to the NAP a government may have to be desolved in such case, leading to secession of some constituents. Therefore, all states together form a compulsory state cartel of illegitimate use of forceful action, i.e. aggression. Usually when inhabitants are pulling in protection from outside of a state, this is considered a form of treason by that state also when the state itself was guilty of aggressing upon natural persons.
Anarcho-capitalism is an anti-statist, libertarian political philosophy and economic theory that seeks to abolish centralized states in favor of stateless societies with systems of private property enforced by private agencies, based on concepts such as the non-aggression principle, free markets and self-ownership. Anarcho-capitalist philosophy extends the concept of ownership to include control of private property as part of the self, and, in some cases, control of other people as private property. In the absence of statute, anarcho-capitalists hold that society tends to contractually self-regulate and civilize through participation in the free market, which they describe as a voluntary society involving the voluntary exchange of goods and services. In a theoretical anarcho-capitalist society the system of private property would still exist, as it would be enforced by private defense agencies and/or insurance companies selected by property owners, whose ownership rights or claims would be enforced by private defence agencies and/or insurance companies. These agencies or companies would operate competitively in a market and fulfill the roles of courts and the police, similar to a state apparatus. Some anarcho-capitalist authors have argued that slavery is compatible with anarcho-capitalist ideals.
A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market. A cartel is an organization formed by producers to limit competition and increase prices by creating artificial shortages through low production quotas, stockpiling, and marketing quotas. Cartels can be vertical or horizontal but are inherently unstable due to the temptation to defect and falling prices for all members. Additionally, advancements in technology or the emergence of substitutes may undermine cartel pricing power, leading to the breakdown of the cooperation needed to sustain the cartel. Cartels are usually associations in the same sphere of business, and thus an alliance of rivals. Most jurisdictions consider it anti-competitive behavior and have outlawed such practices. Cartel behavior includes price fixing, bid rigging, and reductions in output. The doctrine in economics that analyzes cartels is cartel theory. Cartels are distinguished from other forms of collusion or anti-competitive organization such as corporate mergers.
Health economics is a branch of economics concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and healthcare. Health economics is important in determining how to improve health outcomes and lifestyle patterns through interactions between individuals, healthcare providers and clinical settings. In broad terms, health economists study the functioning of healthcare systems and health-affecting behaviors such as smoking, diabetes, and obesity.
Economic interventionism, sometimes also called state interventionism, is an economic policy position favouring government intervention in the market process with the intention of correcting market failures and promoting the general welfare of the people. An economic intervention is an action taken by a government or international institution in a market economy in an effort to impact the economy beyond the basic regulation of fraud, enforcement of contracts, and provision of public goods and services. Economic intervention can be aimed at a variety of political or economic objectives, such as promoting economic growth, increasing employment, raising wages, raising or reducing prices, promoting income equality, managing the money supply and interest rates, increasing profits, or addressing market failures.
A theory of capitalism describes the essential features of capitalism and how it functions. The history of various such theories is the subject of this article.
The non-aggression principle (NAP), also called the non-aggression axiom, is the legal or moral rule that states that any person is permitted to do everything with his property except aggression, which is in turn defined as the initiation of forceful action, which is in turn defined as 'the application or threat of' 'physical interference or fraud ', any of which without consent. The principle is also called the non-initiation of force. The principle incorporates universal enforceability.
Left-libertarianism, also known as left-wing libertarianism, or social libertarianism, is a political philosophy and type of libertarianism that stresses both individual freedom and social equality. Left-libertarianism represents several related yet distinct approaches to political and social theory. Its classical usage refers to anti-authoritarian varieties of left-wing politics such as anarchism, especially social anarchism, communalism, and libertarian Marxism, collectively termed libertarian socialism. A portion of the left wing of the green movement, including adherents of Murray Bookchin's social ecology, are also generally considered left-libertarian.
Right-libertarianism, also known as libertarian capitalism, or right-wing libertarianism, is a libertarian political philosophy that supports capitalist property rights and defends market distribution of natural resources and private property. The term right-libertarianism is used to distinguish this class of views on the nature of property and capital from left-libertarianism, a type of libertarianism that combines self-ownership with an egalitarian approach to property and income. In contrast to socialist libertarianism, right-libertarianism supports free-market capitalism. Like most forms of libertarianism, it supports civil liberties, especially natural law, negative rights, the non-aggression principle, and a major reversal of the modern welfare state.
Ultra-imperialism is a potential, comparatively peaceful phase of capitalism, meaning after or beyond imperialism. It was described mainly by Karl Kautsky. Post-imperialism is sometimes used as a synonym of ultra-imperialism, although it can have distinct meanings.
The Market for Liberty is a significant anarcho-capitalist book written by Linda and Morris Tannehill. It was preceded by the self-published Liberty via the Market in 1969. The work challenges statutory law and advocates natural law as the basis for society. It also argues that society would not be lawless in the absence of the state. The Market for Liberty spends a great deal of time outlining how different businesses and organizational structures would interact in a laissez-faire society and how these interactions would create checks which would ultimately keep the tendency for crime low. In keeping with radical free-market principles, the book is skeptical about the potential for violent anarcho-capitalist revolution to bring about good outcomes.
A private defense agency (PDA) is a theoretical enterprise which would provide personal protection and military defense services to individuals who would pay for its services. PDAs are advocated in anarcho-capitalism as a way of enforcing the system of private property.
The Servile State is a 1912 economic and political treatise by Hilaire Belloc. It serves primarily as a history and a critique of capitalism and socialism. The "servile state" that Belloc describes is a state in which the proletariat, a majority of civil society dispossessed of the means of production, is compelled by positive law to work for those possessed of the means of production. Belloc believed that capitalism was a fundamentally unstable and transitory state of affairs, viewing it as the usurpation of the natural development of property and societal norms. While Belloc states that socialism – which he generally refers to as "collectivism" – is an alternative to capitalism, he contends that it will also necessarily lead to the servile state, albeit in a different manner.
State cartel theory is a new concept in the field of international relations theory (IR) and belongs to the group of institutionalist approaches. Up to now the theory has mainly been specified with regard to the European Union (EU), but could be made much more general. Hence state cartel theory should consider all international governmental organizations (IGOs) as cartels made up by states.
Health care rationing refers to mechanisms that are used for resource allocation in health care.
The Rhenish-Westphalian Coal Syndicate was a cartel established in 1893 in Essen bringing together the major coal producers in the Ruhr.
Progressive capitalism is an approach to capitalism that seeks to improve the current neoliberal American capitalism that emerged in 1980. Progressive capitalism aims to improve economic results through four defining beliefs, namely the vital role businesses play in the economy by creating jobs, fostering innovation, enabling voluntary exchange, and providing competitive goods and services; the recognition of the important role public goods, public institutions, public services and public infrastructure play in supporting businesses including: research, schools, health care, social insurance, taxation, labor law and regulation of markets; the need for the state to be involved in design and oversight of the playing field; and the integration of social justice, stewardship of natural resources and responsibility to all major stakeholders. It is being advocated by Ro Khanna and Joseph Stiglitz.
Holm Arno Leonhardt is a German scientist in the fields of International Relations and economic history, especially in the realm of cartel history and theory. He was born in Manila (Philippines) the son of Brigitte and Arno Leonhardt. Arno became a German expatriate since 1930, moving up the career ladder from accountant to vice director in the branch office of an American paper machine company in Manila. Brigitte came from a liberal merchant family in Saxony (Germany) holding critical distance to the Nazi regime.
Transaction Man: The Rise of the Deal and the Decline of the American Dream is a non-fiction book which chronicles the role of corporations in relation to the American economy and shifts in public policy by Nicholas Lemann, who is a veteran journalist and a The New Yorker staff writer.
Cartel theory is usually understood as the doctrine of economic cartels. However, since the concept of 'cartel' does not have to be limited to the field of the economy, doctrines on non-economic cartels are conceivable in principle. Such exist already in the form of the state cartel theory and the cartel party theory. For the pre-modern cartels, which existed as rules for tournaments, duels and court games or in the form of inter-state fairness agreements, there was no scientific theory. Such has developed since the 1880s for the scope of the economy, driven by the need to understand and classify the mass emergence of entrepreneurial cartels. Within the economic cartel theory, one can distinguish a classical and a modern phase. The break between the two was set through the enforcement of a general cartel ban after Second World War by the US government.
Cartel seats as monuments were the headquarters or other premises of historical, no longer existing cartels in the sense of a group of cooperating, but potentially also rival enterprises. Often, these associations had been syndicate cartels, being an advanced form of entrepreneurial combination because of their tight organization with a common sales agency. The cartel buildings had been used for secretariats, meeting rooms, sales offices, advertising agencies, research departments and further more. Many such historical buildings can still be found in Europe and the United States.