TRADE CARTELS

Wairarapa Times-Age, 15 January 1944, Page 4

TRADE CARTELS

AND POST-WAR ECONOMY

POSSIBLE. ADAPTATIONS,

1 n terha Uonal cartels —by another name,probably, and Government instead of privately controlled, but cartels just the same-may be one of the means by which the United Natiohs will meet the Atlantic Charter’s promise of equal access to raw materials for all nations, an American Associated Press correspondent in New York wrote recently. . The teem “cartel” has been given an odious connotation both by some politicians out to “get” big business and by big businesses which have misused non-competitive agreements. But, after this war, there are going to be a lot of non-competitive agreements if there is to be peace in our, of ahybody else’s, time.

Basically, a cartel is a simple thing.

Before the war there was a worMi tin cartel operated by private Bolivian, British and Dutch producers. The Dutch East Indies, producing tin more cheaply than anyone else, might have put eight producing areas in America, Africa and Europe out of business. So they all got together and decided that Indies tin would be sold at prices which the others could meet. Crossownership had a part ’in making the agreement possible. That is a simple cartel. DIVISION OF MARKETS. Another simple form has been the territorial agreement, under which companies producing under the same formula agree not to compete in certain fields: in other words, they divide up the market. Sometimes this, or a combination of the two, has been used merely to keep prices jacked-up. In other cases, despite what the politicians say, it has prevented uneconomical competition. Agreements between hations, father than c ompanids, are now being proposed. It is a nebulous thing so far, only a thread running through the attempts of individual students of World affairs to find the means of implementing those Atlantic charter words: \ “ to further the enjoyment by al states, great or small, victor or vanquished, of access, on equal terms, to the trade and raw materials of the world ” But the thread is very definitely there.

Coupled with it is free trade—possibly to be attained through very gradual tariff reductions permitting long-term adjustment of domestic economies, so that, for instance, the standards of India’s 'cotton growers could be pulled up, rather than those of America pulled down. Tartff-less trade, rather than free trade, probably is a better description of what some of these students are heading for. What would a cartel-controlled, tar-iff-less world look like? If the individual students held a convention and, with all the good will in the world, mixed the portions of their ideas which would mix at all, here is one individual’s impression of what they would find themselves driving for:

WORLD ORGANISATION. An international organisation of experts representing first, world regiofis. secondly, individual nations; these experts to operate as nearly as humanly possible on a basis of pure economic science, just as pure researchers work in biology or chemistry; io determine what the world has to offc? its population as a whole, which regions should concentrate on production of individual materials, which nations. should cease more or less artificial, or forced, production in fields for which others are better fitted; to fix the prices of .free exchange with, where necessary until the system has shaken down as it has among the commonwealths of the United States, subsidies to bring “cheap labour” to a high level rather than permitting it to drag “high” labour down. These students do not foresee twocar garages all over Malaya and China in the immediate future. Some of them do foresee Chinese and. Malayan farmers getting modern tools with which to help themselves while Americans are getting another automobile. Whether such an experiment in pure economic science could maintain, say, the American standard, while at the same time making the bottom a Io higher, is uncertain. But there ait those who, in the composite, are working and hoping for that very thing.