le 28 avril 2022
More about Liane M. Hewitt
Title:
“Private Planning”: The International Chamber of Commerce’s Promotion of International Cartels & “Industrial Self-Government” between the Wars, 1919-39
Abstract:
In the wake of World War I, many European economists and industrialists proclaimed the end of laissez-faire capitalism. Structural imbalances between production and consumption shattered the pre-war, liberal faith in the power of markets to regulate themselves and naturally restore equilibrium between supply and demand. Economic historians have well-documented how the violent price fluctuations and chronic mass-unemployment of the 1920s, followed by the Great Depression of the 1930s, encouraged states to abandon free trade, embrace economic nationalism, and pursue varieties of planning (whether fascist in Italy & Germany, communist in the USSR, or democratic in New Deal America & Popular Front France). But how did private business leaders and thinkers respond to the failure of markets? This paper argues that the great question of interwar economic reconstruction was not, whether, but who should plan?
Cartels, I argue, offered an attractive alternative to statist planning. Drawing on the archive of the International Chamber of Commerce, the paper demonstrates how the golden age of international cartels during the 1920s-30s was predicated on the promise that private planning, or "industrial self-government" via producer agreements on prices and output (i.e. cartels) constituted a third-way to disordered free markets and state intervention. Founded in 1919, the ICC collaborated closely with the League of Nations.
At the World Economic Conference of 1927, the two institutions championed international cartels as the path to maintaining international trade in the face of mounting tariff barriers, rationalize industry, widen markets, and build a “United States of Europe” which could compete with America and secure the continent’s fragile peace. But this vision was illusory. Instead, the fall-out of the Great Depression encouraged all industrial states to mandate, and even to participate directly in cartels: something the ICC saw as anathema to industrial self-government. Then the world descended into a second cataclysmic war. International cartels had failed to deliver on their promise of peace and stability. The new post-WW2 world order would therefore be founded on very different principles than the post-WW1 settlement. Cartels were now deemed a fundamental obstacle to peace, trade growth and prosperity.
The paper concludes by highlighting how following World War II, the ICC would transform its image for this new era. It embraced the new creed of competition, but without shedding much of its implicit support for cartels nor its more fundamental advocacy for private enterprise over state planning.
