The Economic and Business History of Cartels in Australia
Professor David Round is working with Professor Martin Shanahan, also from the Centre for Regulation and Market Analysis at the University of South Australia, examining several aspects of cartels and their history in Australia.
The research is now in its early stages into a topic that, to date, has largely been ignored by economists, historians and political scientists. That cartels were rife in Australia's early history is not in doubt. Indeed Australia passed an antitrust law, the Australian Industries Preservation Act, in 1906 to deal with monopolies and monopoly-like conduct. Early government action against a strong horizontal and vertical cartel of coal mining companies and shipping companies was taken in the High Court. Isaacs J in a masterly decision found against the cartel, but his decision was successfully appealed to the Full High Court, and this was confirmed on appeal to the Privy Council in 1913. From that date on, until the 1960s, collusion and the whole spectrum of restrictive trade practices proceeded relatively unchecked in Australia.
A paper on this case has already been produced. Entitled "Serious cartel conduct, criminalisation and evidentiary standards", it was presented to the European Business History Association Conference in Bergen in August 2008, and is now being rewritten for submission to a leading international business history journal. A formal economic analysis of the decision is also under way, and a paper on the various political and social attitudes to collusion in the first half of the twentieth century is being written for presentation to a group of European cartel researchers based at the University of Helsinki in June 2009. The research fits into a widespread research program across several universities in Europe on the international history of cartels. For a link to the paper, see below.
The research will look at reasons for, and outcomes of, the cartels in Australia, and will assess the failure of policy to deal with them (despite several referenda being held over two decades up to the 1940's seeking control over monopolies and cartels, all of them were defeated. It turns out that there has been research on these referenda by political scientists, but the reasons for defeat is uncertain in all cases. They will be the subject of further research. The investigations will consider the industries that were most characterised by cartel activity, and whether this behaviour was imported, or ‘home-grown'. Reasons for the gradual swing in attitudes towards doing something about cartels in the late 1950s (culminating in the so-called Barwick proposals of 1962) will be investigated, and the move from these, towards the prohibitions in the Trade Practices Act 1967 and its cumbersome registration process, will be researched in some detail.
It is anticipated that an application will be made in 2010 for ARC funding into the research area.
Publications
- Serious cartel conduct, criminalisation and evidentiary standards: Lessons from the Coal Vend Case of 1911 in Australia, (Martin Shanahan and David Round), (forthcoming Business History, 2009 vol 51, no. 6, pp 875-906)