The economic performance of cartels: evidence from the New Deal U.S. sugar manufacturing cartel, 1934-74
Benjamin Bridgman (),
Shi Qi and
James A. Schmitz
No 437, Staff Report from Federal Reserve Bank of Minneapolis
We study the U.S. sugar manufacturing cartel that was created during the New Deal. This was a legal-cartel that lasted 40 years (1934-74). As a legal-cartel, the industry was assured widespread adherence to domestic and import sales quotas (given it had access to government enforcement powers). But it also meant accepting government-sponsored cartel-provisions. These provisions significantly distorted production at each factory and also where the industry was located. These distortions were reflected in, for example, a declining industry recovery rate, that is, the pounds of white sugar produced per ton of beets. It declined from about 310 pounds in 1934 to 240 pounds in 1974. The cartel provisions also distorted the location of industry. For example, it kept production in California and the Far West. Since the cartel ended in 1974, California's share of sugar production has dropped dramatically.
Keywords: Cartels; Productivity; Competition (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-eff and nep-his
References: Add references at CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmsr:437
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in Staff Report from Federal Reserve Bank of Minneapolis Contact information at EDIRC.
Bibliographic data for series maintained by Jannelle Ruswick ().