The cartel is a monopoly of firms

A cartel is the union of several firms operating in the same industry with the aim of regulating prices, terms of sale, spheres of influence, production volumes, use of patents, hiring workers, and the conditions for selling the goods. It can be attributed to the simplest monopoly unions. Firms participating in the association retain their legal, industrial, financial and commercial independence.

The agreement of a large number of enterprises of one industry is what the cartel is in fact. The definition of this concept was known a few centuries ago. In Western countries, such activities of companies are considered an economic crime, therefore the antimonopoly legislation actively fights cartel participants, revealing illegal associations. But in some countries, such associations are flourishing and even encouraged by the government to standardize materials, restructure industry and restrict competition between small businesses.

In order to profitably distribute the sales market, raise prices for products, establish a minimum level of salaries, entrepreneurs and create a cartel. This agreement should be signed by as many participants as possible in order to eliminate possible competitors. Inside the cartels, large firms dictate their conditions more small and unprotected, do not allow the parties to the agreement to lower prices for the goods.

In market economies, such associations exist in a hidden form, because antitrust laws do not allow the emergence of such activities. There are import, export, domestic and international agreements. The simplest is the internal cartel. This is a union of enterprises of one industry within the country. International presupposes the joint activity of firms from different countries engaged in import and export of products. Import cartels are importers of foreign goods, and export cartels are associations of national exporting companies.

In order not to fall under the antimonopoly legislation, such monopoly associations were called gentlemen's agreements, conventions, rings or corners, but the essence remains the same. There are cartels in Russia in virtually every industry, and this negatively affects pricing. Experts note that if there were no agreements between manufacturers, the prices would have decreased by 2-2.5 times.

Most often, the monopoly can be traced among oil companies, in the telecommunications market, among producers of medicines, products, coal, etc. The government is doing everything possible to eliminate cartels, but to close all loopholes is very difficult and almost impossible. Therefore, the most effective method of fighting dishonest entrepreneurs is to encourage competition.

The cartel is a relatively short-lived association, because after a while, conflicts begin between the participants, the balance is broken. The sustainability of the agreement depends on the ability to include or eliminate outsiders, the lack of forces that undermine the cartel from within.