Germany before the Great Depression 4/12/06 1. Before the Great Depression a. Cooperative capitalism – various players work together i. Institutional traditional in cartels 1. US a. Had suspended these with anti-trust laws 2. Germany a. Getting together to ward off too much competition, fluctuations of business cycle b. Every degree of formal organization c. Coal and steel were huge, coal was an epitome of this trend d. Compare to the former US oligopolies which was concentrated in a few large firms. Greater number of German firms with vertical integration e. Problem of incentive to cheat and break rules of cartels. f. Does not kill fluctuations of the market g. Seen as children of necessity – saves people form the horrors of competition h. German imperial court upholds the legality of cartels i. Claims that it is in the interest of the whole that incredibly low prices do not exist in any industry ii. Justifies cartels as a form of cooperative self help for business iii. Cartel agreements were legal and enforceable
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