User:Ttocserp/Limitation of the Vend
Historic cartel in the coal industry / From Wikipedia, the free encyclopedia
The Limitation of the Vend was a cartel of coal mine owners of north east England. Its purpose was to limit sales and keep up prices. The immediate buyers in this market were ships' captains who aimed to resell in other parts of England; but chiefly in London which, by becoming the planet's first mineral-fuelled city, had escaped a natural constraint on the growth of urban areas and was a voracious consumer. Often dated 1771-1845, the Limitation of the Vend can be traced back much earlier.
The cartel's coals, despite their enhanced prices, captured nearly the whole of the lucrative London market. Those mined in other parts of Great Britain, though geographically closer, could seldom compete. Members of the cartel kept up their competitive advantage by heavy investment in transportation and deep mining technology. The region has been described as the Silicon Valley of its day.
The cartel operated openly and without concealment, being supervised by a well-organised secretariat, who could detect significant cheating. Apparently, members thought their behaviour was illegal, but morally justified. Never successfully prosecuted by the law, they were investigated at least five times by Parliament, twice at their own instigation.
The Limitation of the Vend has left meticulous records, enabling scholars to study the behaviour of a real cartel in cliometric detail. Unlike most price-fixing business combinations, which soon collapse e.g. because members start cheating, the Limitation maintained itself for an exceptionally long time, albeit with occasional outbreaks of cut throat competition, being perhaps the most durable cartel that has ever existed. It has been described as one one of the most fascinating problems in economic history.