Cartels Are Gangs.
Laissez faire markets and competition, by nature, and invariably deliver quality products all the while existing as the anthesis to oligolipolies.An oligopolistic market is a market where a few large firms have significant influence over industry and respective market idiosyncrasies .
Often, oligopolies lead to marketplace collusion- a function that offers firms the same benefits as a monopoly, but without single-member control. These outfits are known as ‘Cartels.’ And By stifling the competitive nature of free markets, these cartels become fixated on their company’s growth rather than serving those whom drive revenue — the clientel. With cartels controlling market forces, why would cartel members ‘waste’ capital innovation by delivering competitive pricing?
A collusion agreement, in most jurisdictions, is considered illegal and unethical. The deal is either an implicit or explicit understanding between cooperating firms aiming to maximize shareholder value through unfair economic forces.
Participant oligopoly firms are referred to as Cartels. These cartels stifle competition by creating economic barriers for organizations seeking market penetration. In doing so, cartels band together to leverage their combined resources to scale an organizational strategy: to stifle competitive markes and creates barriers to marketplace entry. The barriers propiaged by cartels induce a zero-sum industry where oligopoly shareholders reap higher than certain profits. The profits realized by cartel shareholders are the manifistations that ardent Libertarians call ‘Crony Capitilsim.’
Market restrictions, including having absolute control over industrial input/output, adversely affects the cost of capital and price of raw materials. To compound times, supply chain participants are under duress from Oligopolies, which furthermore inhibits new business development and supply chain integration. These restrictions, in turn, inhibit businesses from prospecting supply chain’s willing to accomidate (money saving) bulk-order purchase orders. The restrictions imposed by cartel members make it hard for competitors to produce/deliver products at the same price point as the said oligolipoly partners.
A zero-sum industry created a by an oligopoly is easier to maintain when profits occupy organizational hindsight; hence the enticement for businesses to amalagate as cartels. Notwithstanding legality and ensuing issues, cartel members find it is easier to crush competition through malfeasance rather than innovate through free markets.
Given the economic forces of oligopolies, one can expect a stark contrast between marketplace winners and losers — with the prevailing often being the cartel members.
Part 2 — By extension, how have global oligopolies benefited from the decrease in local competition?