[cartels] free trade or restraint of trade

In the wake of the largest fine in Australian corporate history handed out to packaging giant Visy, Australian Competition and Consumer Commission chairman Graham Samuel said cartels were "a cancer on the Australian economy" and an "insidious attack on consumers" and said criminal penalties should be imposed on those found guilty.

History has been punctuated by attempts to control them such as the 1890 Sherman Act:

The Sherman Act provides: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal".[2]

The Act also provides: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony [. . . ]"

But it could be equally argued that the legislation is restraint of trade in itself. And at what point do mergers and takeovers become illegal? The whole thrust of business is to combine and strengthen and though asset strippers are a scourge, resulting in cries to ban the practice:

In an interview with the BBC, Northern Ireland Secretary Peter Hain said he shared the concerns of Britain’s general trade union GMB which voiced fears over a growing number of venture capitalists investing in UK firms only to strip them. "We want policies that make sure the objective of investment by private equity fund, for example, is to rescue them, to maintain as many jobs as possible, not to asset strip them," he said. This is ironic as Labour has been the recipient of donations from equity specialists that have been criticised by unions for their approach to certain businesses.

What happens when the government, e.g. the NHS, gets into the practice?

The government has been accused of orchestrating a £345m sell-off of former hospitals in one year in an attempt to balance the NHS budget. The value of the sales is 14 times the previous year's total.

Tough call, this one because should their be constraint on capitalism? This is not covered by the Free Trade/Fair Trade argument. Even if one argues for Free Trade, are we referring to cross border tarrif reduction and if so, what would be the effects?

The Congressional Budget Office says:

… the arguments for and against FTAs extend beyond their net economic effects on the United States to considerations of foreign policy and tactics for achieving multilateral free trade …

and:

Critics worry, however, that the pursuit of free-trade agreements could divert the world from multilateral negotiations and lead to the development of rival trading blocs centered on the United States, the European Union (EU), and Japan. Indeed, the EU has negotiated a number of FTAs in recent years.

In a world of outsourcing, how can legislation from national assemblies have any jurisdiction over those of outsourced countries? There seems to me to be very much a move towards blocs and this has political ramifications, especially regarding the EU.

How could the Sherman Act operate in the context of more globalized trade? And what relevance does a corporate affairs fine have on a major operator - surely it's window dressing?

Example of the thrust against the survival of small businesses was my screenprinting business. It was in a healthy state, orders were coming in and it looked rosy until some I was asked to tender for an indoor sports centre's team shirts.

My little firm could only do the job at near cost and still a large international printing firm undercut it by half by not only mass printing but supplying the shirts as well from one branch of their operation.

Diddums, you might say - that's just business and it certainly put me out except with customers who weren't aware they could approach this company to get their shirts for half the price. That was one of the key reasons I dropped it - it was unsustainable.

Should the small to medium businessman have any protection and if so - isn't this restraint of trade? Isn't this propping up unprofitable enterprises, as with CAP?

Still pondering on this one.