Abstract: Cooperation and Competition: Interfirm Relations in Iron and Steel Cartels, 1886-1931: The Case of Austria, Czechoslovakia, and Hungary

Ágnes Pogány

Abstract

In the Austro-Hungarian Monarchy there were two periods of cartelization before 1914. In the first period until 1900, low levels of interfirm cooperation hindered effective protection of the internal and export markets. In 1902 new iron and steel cartels were formed in the Monarchy. Institutions were established in order to inspire confidence and better cooperation. Both Austrian and Hungarian cartels were made on the same principles and had the same organizational structure, which made joint functioning possible. The newly formed common iron cartel reached significant results. Price decline was stopped and a compromise concerning the protection of the domestic markets could be signed with Germany and other major European producers. After World War I iron and steel producers of the successor states revived the former cooperation relatively early. Long personal contacts and common interests helped to alleviate serious problems caused by war and the peace treaties. Cartels aimed to stabilize steel production and prices by reconstructing market structures of the period before 1914. These efforts were not successful. A changed institutional and political environment, the resulting lack of confidence, and economic depression made well-functioning interfirm cooperation impossible.