Private Planning: The International Chamber of Commerce’s Promotion of International Cartels and 'Industrial Self-Government' in Between the Wars, 1919-39

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 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 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, constituted a third-way to disordered free markets and state intervention. Founded in 1919, the ICC gathered the leaders of industry, commerce and finance from across Europe and America. Its “Cartel” and “Europe” committees closely collaborated with the League of Nations to promote cartels. The ICC especially championed international cartels as the path to maintaining cross border trade and supply-chains, modernizing industry, and building an economic “United States of Europe” which could secure peace and match American Fordist mass-production. The paper concludes by highlighting how following World War II, the ICC would embrace competition without shedding much of its support for cartels nor its advocacy for private enterprise over state planning.