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Such a cartel would still be possible even without patent protection (the article doesn't go into enough detail on whether patents where still only available th
by jcfrei 12y ago
Such a cartel would still be possible even without patent protection (the article doesn't go into enough detail on whether patents where still only available through GE after WWI). Cartels are always possible when you have massive economies of scale. The (mass) production of light bulbs in this case is sufficiently difficult and expensive, so that any cartel could easily thwart new competitors - even without patent protection. The expertise in the production of light bulbs doesn't lie within the schematics of the light bulbs themselves - it lies within the exact production process, the selection of the suppliers, refinement of materials, etc. Those are enough hurdles to make an entry into this market very difficult and the establishment of a cartel so easy.
In my eyes this article is a very good argument against a pure laissez-faire economy.
- dublinben 12y agoCorporate cartels are incredibly unstable though, because it is always in a single company's best interests to defect. They tend to last much less time than a patent, and are obviously not legally enforceable.