Cartels in 19th century Germany: On the economic analysis of (legal) cartels in historical perspective

• Applicant: Professor Dr. Felix Höffler (†)
• Subject Area: Economic and Social History ; Economic Policy, Applied Economics
• Term: from 2016 to 2019
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 281766073

One of the main tasks of competition policy is to counteract collusive agreements. The better our understanding of cartels, the easier it will be to accomplish this task. However, the fact that nowadays cartels are mostly illegal makes it hard to observe and understand cartels. Therefore, economic research has developed an (increasing) interest in legal cartels. Since contemporary cartels are usually illegal, this implies an increasing interest in historical periods in which cartels were legal. To create insights from historical cartels for the current antitrust discussions, it is crucial to understand the historical context of these cartels. At the same time, modern economic analysis can contribute to the understanding of historical cartels. For such an economic history research project, the German cartels before 1914 offer ample and rich material. Since cartels were officially legal at least since 1897 - though there still was considerable public debate about them - cartels, their behavior and even their contracts are often well documented for this period. In particular, the Denkschrift über das Kartellwesen (Memorandum on cartels) of 1905 includes the contracts of the majority of the most important cartels in Germany for this period. Based on these historical documents (though not confined to it), the aim of the research project is to investigate the internal organizational structure of cartels, and the institutions they created. These insight will be used to improve our understanding of how cartels work, how and when they are created, and what their impact is. The research project is embedded in a larger research program on Konkurrenzkulturen (Cultures of competition), which will facilitate interdisciplinary exchange with historical research and ensure that the economic discussion of historical cartels will be adequately put in historical perspective.

• DFG Programme: Research Grants