Tied Houses, Taxes, and Technology: Concentration in the Brewing Industry of New South Wales, 1882 to 1932

The brewing industry in New South Wales reached its numerical peak of about eighty breweries in the 1880s, and then declined to five breweries by the 1930s. Three of these, controlled by two firms, supplied virtually the whole state. This numerical ebb represents a process of industry concentration, driven by the necessity to maximize efficiency through economies of scale. This article examines increased concentration through cost pressures which encouraged it, and transport and other improvements which facilitated it. The former included: restrictive licensing, licence reduction, and diminishing demand, and the consequent need to tie hotels to secure markets; the colonial beer duty, the federal beer excise, and related government supervision; and the introduction of new technology to the brewing industry to satisfy changing fashions. Accompanying its numerical decline went a spatial contraction, the result of market expansion by Sydney breweries, facilitated by rail transport and by improvements in the chemical stability of beer.     

Missed the starting gun! Wage compression and the rise of the Swedish model in the labour market

A central aspect of the Swedish model was the labour market, distinguished by an egalitarian wage structure and by the particular configuration of two institutions: a centralised wage bargaining that followed upon the Saltsjöbad Agreement in 1938 and the solidaristic wage policy implemented in 1956. The literature argues that these institutions produced an outstanding compression of the wage structure from the late 1960s onwards. In contrast, we argue that this narrow post–World War II focus overlooks the historical dimension of the wage structure. The evidence presented here shows that a compression of the wage structure occurred in the late 1930s and 1940s. Previous research attributes this early episode of compression to market factors. In public investigations and periodicals of the 1940s, however, contemporary observers reckoned that special agreements between SAF and LO during World War II caused wage convergence. These agreements anticipated the solidaristic wage policy of the 1950s. We subject the market-factor view to a statistical test and show its explanatory insufficiency. We thereby corroborate the contemporaries’ view and conclude that the coexistence of the centralised agreements, the solidaristic wage policy, and wage convergence configured the rise of the Swedish model during World War II.     

Profits,dividends and industry restructuring: the Swedish paper and pulp industry between 1945 and 1977

This paper explores the role of profit distribution in the restructuring of the Swedish paper and pulp (P&P) industry between 1945 and 1977. In addressing this issue, we will draw on the life-cycle theory and market imperfection arguments to examine whether the less profitable firms shared more of their profits as dividends, or remained on the market longer by reinvesting the majority of the profits. Our study shows that an increasing share of the profits was distributed to owners over time, and thus less profit was reinvested in industrial renewal. We find that the observed general upward trend in dividends can be attributed to the decline in profit and firm legacy, as firms in the Swedish P&P industry kept dividends up while reducing reinvestment as their profit margins decreased over time. Our study shows that the market imperfections related to capital taxation and investment funds increased rather than decreased dividends.     

A survey of the public records system in Sweden

Abstract

The public records system in Sweden consists of the National Archives (Riksarkivet) in Stockholm, the provincial archives (landsarkiv) at Lund, Uppsala, Vadstena, Gothenburg and Härnösand, the county archives (länsarkiv) at Visby and Ostersund and the municipal archives (stadsarkiv) of Stockholm and Malmö, the National Archives being the supreme authority for this system. The military archives system has its own authority: the Royal Archives of the Army and Navy (Krigsarkivet) in Stockholm. Some of the central administrative boards (centrala ämbetsverk) have also archives administered by their own staff, e.g. the Royal Survey Board (Lantmäteristyrelsen) and the Central Bureau of Statistics (Statistiska Centralbyran). There are, of course, also a great number of private archives outside the public records system, e.g. the archives of the Royal Family (Bernadotteska familjearkivet) in the Royal Palace in Stockholm and the archives of the de la Gardie Family kept in Lund University Library. With the two exceptions mentioned above (Stockholm and Malmö) the municipal archives are also regarded as private and so are, of course, the business archives the most important of which are those of Stora Kopparbergs Bergslags AB, Falun, Holmens Bruks AB, Norrköping, Uddeholms AB, Uddeholm, and Svenska Gellulosa AB, Sundsvall.     

Regulatory fallacies in global telecommunications: the case of international mobile roaming

International mobile roaming cartel agreements prompted the EU to intervene, firstly encompassing competition law measures by a cartel exemption, then initiating several competition proceedings based on the accusation of abuse of a dominant market position, and finally applying price regulations of increasing scope. The paper exposes the temporary market power regulations, including the designated local break out measures, as insufficient and misleading. The solution is to solve the cartel problem at its root, permitting visiting customers the freedom of choosing between their home operator and alternative carriers from the visited country by the implemention of carrier portability.     

Methods and sources for the study of Swedish standards of living

Abstract

Recent studies of trends in Swedish standards of living raise questions of principle. Are the trends best measured in terms of individuals or of households, in monetary units or by the acquisition of goods and services? How ought income to be defined for this purpose? Is it better to investigate a cross-section of the population or occupational groups, and which years ought to be studied to obtain a valid series over time? Some of these problems have been elucidated by two dissertations published in the course of the inter-university research project on Swedish living standards 1925-1960, M. Järnek's study of household incomes in the city of Malmö between 1925 and 1964 and the present author's investigation of certain occupational groups in Gothenburg from 1919 to 1960.¹ This article is an attempt to continue and expand the discussion.     

Market structure and the coal cartel in early nineteenth‐century England1

Using counterfactual competitive prices, the effect of the north‐east coal cartel on prices is estimated at 13–17 per cent between 1816 and 1845. Non‐cartel producers were highly responsive to price changes, and their threat to the cartel was made credible by market integration facilitated by canals. The spread of railways had little impact on the cartel's market power. Highly inelastic demand and responsive supply from other regions meant that deadweight losses from the cartel were insignificant throughout this period.     

Mark och människor. Befolkning och försörjnings-resurser i väslra Småland 1800–1850

Abstract

This dissertation is chiefly about land reclamation, redistribution of holdings and population change in two south Swedish län (counties)—Jönköping and Kronoberg—during the period 1800-1850. These were wooded areas with relatively little arable land, their economy being supplemented by cattle farming, handicraft production for the market, and forestry. Selfsufficient farms predominated, but increasing integration into the market economy provided the background to the changes described by Karlsson.     

How brinkmanship saved Chadbourne: Credibility and the International Sugar Agreement of 1931

Theories of cartel stability assume detection is uncertain, but also unambiguous. Recent empirical studies find that cartel agreements are contractually incomplete. If so, whether an action constitutes violation may be ambiguous. While theory emphasizes the ineffectiveness of agreements that are not fully specified ex ante, recent research shows that stable cartels may often renegotiate terms to eliminate loopholes caused by incompleteness. Naturally, renegotiations can lead to breakdowns, but sometimes threats of breakdown are resolved. This paper examines the strategy adopted by Cuban negotiators to resolve a near breakdown in the International Sugar Agreement of 1931. Cuba made a threat of retaliation credible by using a strategy of brinkmanship. The paper contributes to recent empirical work, such as Levenstein [Explorations in Economic History 33 (1996) 107; Journal of Industrial Economics 45 (2) (1997) 117] and Genesove and Mullin [American Economic Review 91 (3) (2001) 379], which uses the economics of organization to interpret cartel behavior.     

Sources of Capital and Capitalization in the Scottish Brewing Industry, c. 1750—1830

T he formative years in the development of the Scottish brewing industry coincided with the classic Industrial Revolution between 1770 and 1830. The industry was well established by the middle of the eighteenth century, a number of important firms being founded about 1750. Capital found its way into Scottish brewing from various sources, mainly from agriculture and commerce. Merchants were among the leading groups of investors, which also included lawyers, accountants, and excisemen. Related trades, like malting, distilling, and corn-milling also provided capital. Brewing maintained close contact with the countryside, for many farmers invested in the industry in a modest way; and the waste products of the brewery (called "draff" in Scotland) were returned to the farm for fattening purposes. Most breweries were small, serving only local markets. But in the cities and growing towns, where a more concentrated market existed and transport was a lower proportion of costs, larger units quickly emerged. Urban brewers began to make inroads into country markets during the Industrial Revolution, and also to sell further afield by developing coastal and foreign trades. At the close of the period with which this study is concerned the Scottish brewing industry was becoming increasingly urban in character, dominated by large-scale production units, such as those in Edinburgh, Alloa, Falkirk, and Glasgow. This article examines two aspects of the Scottish brewing trade during the century 1750-1850 through, (i) an analysis of the main sources of capital, and (ii) a breakdown of the size of firms from legal records and insurance valuations.     

Yankee Doodle went to London: Anglo‐American breweries and the London securities market, 1888–92

The enthusiasm of British portfolio investors for US industry in the late 1880s has been seen as evidence of the liberalism of the London Stock Exchange and the conservatism of the New York Stock Exchange. Based on a study of Anglo‐American brewing issues on the London market between 1888 and 1892, in this article it is argued that such an interpretation cannot be sustained. For these issues, securing access to the London market proved more demanding than accounts of its liberalism would lead us to expect: in fact, Anglo‐American brewing companies submitted to strictures from London that were more constraining than those of the New York market. Promoters accepted London's constraints to take advantage of the high valuations assigned to Anglo‐American brewing securities there, which reflected the city's success in building demand based on financial machinery that did not exist in New York. That machinery included underwriting syndicates, accounting standards, and the London Stock Exchange's listing rules, although, from this perspective, it was the rigour of the exchange's rules that was important. Still, vetting securities for quotation was not the same as for investment, as the disappointing performance of the Anglo‐American brewing securities soon revealed.     

A method for estimating the volume of Baltic timber products exported through the Sound and its application to Portugal, 1669–1815

Abstract

In this article, the conventional wisdom on German trade policies during the interwar and the wartime years are examined from the Swedish experience. The conventional view, represented by, for instance, Hirschman, Child and Ellis, is that Germany adopted exploitative trade policies during the 1930s. By forcing bilateral agreements onto its smaller trading partners, the bargaining power was biased towards Germany's advantage – that is, Germany gained the market position of a monopolist-monopsonist. According to the conventional view, this was reflected in the cash flows, export and import prices and the commodity structure of the trade. In this article, German trade policies are analyzed with respect to the design and practice of the Swedish-German bilateral exchange clearing agreement; the commodity structure of the trade; and the price trends in Swedish-German bilateral trade. In the analyses, no evidence was found that would suffice to confirm the conventional view on German trade policies. Instead, it seems more likely that the Germans aimed for long-term cooperation, as has been claimed by, for instance, Milward, Neal and Ritschl. This does not mean that German trade policies were not exploitative, but since bilateral arrangement leveled the asymmetric power relations, Germany could not make use of its relatively stronger position.     

Networks and Scientific Integrity: Eli Heckscher and the Construction of Economic History in Sweden, 1920–1950

Abstract

This article deals with the US government's efforts to curb the Swedish ball bearing producer SKF's exports to the East early in the Cold War, 1950–1952, and interprets this process within the framework of hegemony theory. In doing this, the article makes use of previously unutilised US archival material. The period up to mid-1951 saw increasing US pressure upon Sweden and SKF to consent to US hegemony by abiding by the Coordinating Committee for Multilateral Export Controls (CoCom) embargo. To achieve its objectives US policymakers developed a flexible ‘carrot and stick’ approach, and the article adds considerable detail regarding the US government's handling of SKF. US tolerance and flexibility was dependent upon Swedish consent to American hegemony in Western Europe, which was received through the signing of the Stockholm agreement – a hegemonic apparatus through which Sweden's abidance by the embargo was handled – in mid-June 1951. A small amount of exports was accepted by Washington as long as the main US objective – to deny the Eastern Bloc strategic technology – was adhered to by SKF. The article also reveals the lack of policy coordination in the Swedish government, and the conflicts between the government and SKF regarding the responsibility for adhering to the embargo.     

A HISTORY OF THE PAN‐PACIFIC COAL TRADE FROM THE 1950S TO 2011: EXPLORING THE LONG‐TERM EFFECTS OF A BUYING CARTEL

Since the early 1960s, the Pan‐Pacific coal trade has underpinned East Asia's industrial development. While the genesis of this trade lay in investment decisions by United States‐based companies that pioneered exports from Australian and western Canadian mines, its development was largely shaped by the strategies of the Japanese steel mills who acted as a buying cartel. By the early 1980s, this cartel had engineered an oversupplied market characterised by constantly falling prices. By 2001, however, this strategy proved counterproductive, as exports of coking coal in particular were concentrated in the hands of an oligopoly of super‐efficient producers that drove up prices.     

Global competition and cooperation in the electronics industry: the case of X-ray equipment, 1900–1970

The electronics industry is often regarded by scholars as an example of a sector driven by endless technological innovation and major competition between a few large companies, thus embodying the common view whereby the free market leads firms to innovate. On the other hand, some business historians have also emphasised that, since the beginning of the twentieth century, most of these companies were engaged in various international cartel agreements. The business and economic history literature on this industry reveals a clear-cut divide between the inter-war years and the post-war era. In this paper, however, we argue that technical and commercial cooperation between large electronics companies continued in various forms despite the spread of anti-trust policies after 1945. In this case study, we explore the global X-ray equipment industry from its beginnings around 1900 to the advent of the CT scanner in the early 1970s. The paper focuses on Siemens and Philips, the two largest manufacturers of radiological equipment. It demonstrates that both companies pursued their commercial and technical cooperation at least until the 1970s, although it was much less overt as during the interwar years.     

THE CLUSTERING OF IPO SPREADS IN KOREAN IPO MARKET: COMPETITION OR COLLUSION?

This paper examines whether the clustering of initial public offering (IPO) spreads in the IPO market occurs through competition or collusion, using the period from January 2000 to July 2006 as the analytical range. It finds that the Korean IPO market spread is clustered at 3.5% on moderately sized IPOs (i.e., IPOs between 9 (KRW billion) and 33 (KRW billion)), representing a 74% overall rate that increases gradually over time. Our empirical results refute the collusion theory. The Korean IPO market is characterised by low concentration. A 3.5% spread does not represent abnormal profits relative to other IPOs. Cost saving (i.e. an inverse U shape) is confirmed by the use of 3.5% offers. Our results also show that factors typically related to underwriters and issuers – such as proceeds, secondary sales, earnings and reputation – affect the 3.5% spread used both positively and negatively. Thus, consistent with the efficient contract theory, the use of a 3.5% contract becomes less likely as proceeds increase but becomes more likely for IPOs of over 35 (KRW billion). On the one hand, the use of a 3.5% contract becomes more likely the more insider shares an IPO contains and the higher the volatility of the stock return (an insignificant factor). On the other hand, the use of a 3.5% contract becomes less likely the higher the earnings and debt (insignificant factors) and the more reputable the underwriter. Underpricing in 3.5% IPOs is conditioned by proceeds and secondary sales, not reputation and IPO market concentration. Thus, we conclude – against the cartel theory – that there is no collusive conspiracy in the Korean IPO market and that underwriters do not reap excess profits from 3.5% IPOs.     

城市公用事业特许合同初探

长期以来,我国城市公用事业被排除在市场经济运行体制之外,不能有效地融入市场经济体制之中。政府在公用事业中角色的混乱也导致公用事业政企不分、政事不分,严重制约了我国城市公用事业的发展。20世纪90年代以来的市场化改革带动了城市公用事业的快速发展。但是,在发展的同时也带来了一些不可回避的问题。本文笔者从特许经营合同的角度,利用行政合同的相关知识,结合公共选择理论以及新公共管理的思想,在参考国外模式的前提下,列举相关实例,剖析我国公用事业特许合同中存在的相关问题并提出初步解决方案。     

Openness and total factor productivity in Swedish manufacturing, 1980–1995

Openness and Total Factor Productivity in Swedish Manufacturing, 1980–1995. — This paper studies the effect of openness on total factor productivity (TFP) growth. Using industry-level data for Swedish manufacturing from 1980 to 1995, the paper shows that integrated industries tend to be more engaged in R&D and have more entry and exit activity than other industries. The results show that domestic R&D intensity does not contribute to the TFP growth rate. Instead, openness to international markets, which helps facilitate technology spillovers, is an important factor. There is also some evidence that producers exiting the market are less productive, implying that such exits will increase the average productivity of the industry.     

Labour Market Dynamics in South Africa at the Onset of the COVID-19 Pandemic

This paper conducts an analysis of labour market dynamics in South Africa during the initial period of lockdown, from the end of March to the end of April 2020, using the first wave of the NIDS-CRAM (2020) survey. Within our sample of over 6,000 adults aged 18 to 59, we found that there was a very large decrease in employment. The fraction of the sample that was conventionally classified as employed decreased from 57% in February to 48% in April. If we further exclude temporarily absent workers, which we term “furloughed” employees, this fraction decreases further to 38%. Thus, about one out of every three employed people in our sample either lost their job or did not work and received no wages during April. This has extremely large implications for poverty and welfare. We further analyse the labour market by comparing across demographic groups as defined by race, by gender, by age groups, by geographic areas and by education levels. The over-arching finding from this analysis is that the job losses were not uniformly distributed amongst the different groups. In particular, groups who have always been more vulnerable – such as women, African/Blacks, youth and less educated groups – have been disproportionately negatively affected.     

Market Power of Domestic Marketers and its Influence on the Consequences of the Korea–US and Korea–Australia FTAs on the Beef Market

Domestic, US and Australian beef, which are differentiated by country of origin, are sold in Korea. In this differentiated product market, tariff reductions through Free Trade Agreements (FTAs) are expected to strengthen the competitiveness of imported beef and, therefore, to mitigate the effects arising from the market power of domestic marketers. The present study develops a simulation model that evaluates this mitigating effect by explicitly reflecting the market structure that domestic beef marketers constitute. The simulation results indicate that the farm-retail marketing margin would decrease by 10.59% or 6.79% due to the Korea–US and Korea–Australia FTAs, respectively, if domestic beef marketers formed a cartel or an oligopoly market (i.e. the degree of market power is 0.5), while the marketing margin under a competitive market scenario is simulated to have no change. The value of beef production would decrease by 1009 million dollars if the marketers form a cartel and hence exercise monopoly power. The FTAs are simulated to reduce the value of beef production by 564 million dollars under the competitive market scenario.