Moral panic,moral regulation and essentialization of identities: Discursive struggle over unethical business practices in the Finnish national media

The study sheds light on the language of moral panic and moral regulation in the Finnish news media over a 9-year period on the subject of cartels and cartel agreements. What makes the case particularly interesting is that the object of the most explicit moral panic was the introduction of new laws (leniency programmes) designed to regulate illegal cartel behaviour. The main argument is that the construction of both moral regulation and moral panic in news media takes place through essentializing discursive claims that contribute to national identity construction. The study contributes to current literature on moral panics as ideologico-discursive phenomena and throws some light on the power-laden discursive processes that work to reconstruct, essentialize and stabilize identities. In addition, there are some suggestions as to why some moral panics fail to develop.     

ECONOMIC WELFARE, PRICE AND PROFIT: THE DETERRENT EFFECT OF ALTERNATIVE ANTITRUST REGIMES

This paper critically examines the deterrent effect of price-fixing statutes under alternative antitrust regimes. A regime is defined by the litigation strategy which the antitrust agency employs in detecting cartels and in determining whether prosecution is warranted and by the basis upon which courts estimate damages. The results of the analysis suggest that antitrust policy may actually induce cartels to further restrict output, increasing welfare loss above the level imposed by an unthreatened, perfect monopoly. Litigation strategy and damages should be founded upon consideration of welfare loss measures to avoid this possibility.     

THE DYNAMICS OF A STABLE CARTEL: THE RAILROAD EXPRESS 1851–1913

The railroad express was probably the most successful cartel in U.S. business history. The key to its stability lay in the fact that collusion was largely an effort to create a cost-reducing distribution network. Because cost was dependent on collusion, the five cartel members could both underprice entrants and punish defectors. It is shown that in a Bertrand-type price war, colluding firms could effectively drive a defector into bankruptcy. As a result, the express controlled its market and remained a stable organization for more than half a century.     

Sociopsychological Analysis of Japanese Industrial Policy: The Sumitomo Metals Incident

Abstract:  In the 1960s, the former Japanese Ministry of International Trade and Industry (MITI) controlled key industries through its industrial policy. It is commonly believed that this policy was based on an economic rationale. In particular, the MITI justified what are known as recession cartels on the grounds that reducing production volume would prevent destructive competition. Our purpose is to go beyond this current economic understanding via a sociopsychological analysis. We focus on the so-called Sumitomo Metals incident of 1965 when the Sumitomo Metals Company refused to follow the MITI guideline demanding a reduction in steel production. This was the first such incident in which a private company explicitly refused to abide by MITI administrative guidance. We hold that the industrial policy was not necessarily based on an economic rationale. Sumitomo was alone enjoying profit while all other companies were suffering loss. The MITI and major steel manufacturers insisted, without economically sound reasoning, that Sumitomo should reduce its steel exports. On an economic basis, however, steel exports should have been promoted, not restricted, to counterbalance the domestic recession. The whole incident was a sociopsychological battle disguised as an economic debate, and the economic argument of the MITI and other steel manufacturers was actually an elaborate scheme of psychological rationalization. Their severe denouncement of Sumitomo is best explained by the psychological defense mechanisms of projection and displacement. Furthermore, the recession cartel in this case was essentially a ritual of collective suffering under the orchestration of state authority.     

Network similarity and collusion

This study focuses on how collusive construction industry cartels structure their bidding patterns to increase their market shares, while preserving an illusion of competition. Using past research on the economics and social organization of bid-rigging and collusion, we examine a key issue related to similarities within bidding structures that are likely tainted by cartels. The study is empirically based on public procurement data to recreate the structure of interactions between construction industry firms in the province of Quebec (Canada) over a 12-year period (2002–2013). Cross-level multivariate analyses demonstrate that our indicator of similarities in bidding patterns, the Jaccard coefficient, is a positive factor of market shares, but particularly in cities that are targeted for collusive practices. We also emphasize the need to develop a monitoring system that allows researchers and analysts to track collusion patterns in various ways so as to prevent an increase of more sophisticated schemes and cartels.     

QUANTIFYING THE DETERRENT EFFECT OF ANTICARTEL ENFORCEMENT

This paper presents a rare attempt to quantify the deterrent effect of anticartel policy. It develops a conceptual framework, which establishes the sort of information necessary for such quantification. This is then illustrated and calibrated by drawing upon existing literatures and using evidence from legal cartels to approximate what would be observed absent policy. Measuring impact by the proportion of all potential harm that is deterred, our best estimate is two‐thirds and, even on conservative assumptions, at least half of all harms (or seven times the detected harm) is deterred. (JEL H11, K21, L44)     

Kein Kartell, kein Monopol, keine Oligarchie?

In the framework of the excellence programme designed to promote science and research at German universities, a debate broke out as to whether the programme would strengthen existing tendencies toward structures of cartel, monopoly and oligarchy. A most recent study wants to prove that such structures do not show up in the German Research Foundation’s programme of funding individual research projects. This finding is, however, not appropriate to give the all-clear. Among crucial factors supporting structures of cartel, monopoly and oligarchy, the shift from block grants to individual grants based on competition can be identified, just as the shift from funding of single research projects to funding large-scale coordinated programmes and funding institutions, most recently along with the excellence programme. It is exactly these crucial factors that have been excluded completely from the study. Hence, it slips into the tracks of a science of affirmation. This aberration can be explained by the entanglement of interests in research, research funding and research evaluation, which works against free research and is an epistemological barrier to science research.     

THE BEHAVIOR OF REGULATORY ACTIVITY OVER THE BUSINESS CYCLE: AN EMPIRICAL TEST

This paper tests a prediction of the interest-group theory of regulation which suggests that regulators generally will not force any one group to bear the full adjustment costs associated with variations in the business cycle. That is, the interest-group model predicts that regulatory agencies will redistribute cyclical gains and losses by supplying more "producer protection" regulation during contractions and more "consumer protection" regulation during expansions; i.e., regulatory activity which reduces consumer welfare will tend to be countercyclical, intensifying when aggregate demand falls and abating as demand increases.
The empirical results show a countercyclical and statistically significant ceteris paribus relationship between Federal Trade Commission enforcement efforts under the Robinson-Patman Act and several alternative measures of general business conditions. Since the Robinson-Patman Act is viewed widely as anti-consumer, the findings suggest that in cyclical downturns the Commission moves to protect producers against losses by bringing more cases which limit the tendency for prices to fall. This result may be rationalized under the view that during recessions, the Federal Trade Commission is in the business of transferring wealth from consumers either to protect small business or to bolster cartels. On the other hand, during business expansions the Commission reduces its Robinson-Patman case load, and such a change in enforcement may serve to mitigate producer gains, transferring wealth to consumers at the margin. In any case the paper offers empirical support for the interest-group model by providing evidence that the business cycle plays an important part in explaining the level and pattern of regulatory activity.     

RACISM AS RENT SEEKING

Rules governing social and economic interactions among ethnic groups are modeled as public goods. The publicness of social rules can explain why race has been so consistently politicized. The potential gains from public provision attract political entrepreneurs into the field. In the absence of some constitutional restraints upon such rent seeking, race is bound to be politicized. In addition, the model can explain the existence of many government policies concerning race that are not apparently motivated by economic gain. Finally, government enforcement of ethnic economic cartels can explain some of the persistent differences in earnings across ethnic groups.     

MARKET POWER AND COLLUSION IN THE OCEAN SHIPPING INDUSTRY: IS A BIGGER CARTEL A BETTER CARTEL?

The regulatory structure of the ocean shipping industry allows carriers to enter into joint pricing agreements (conference agreements) that are free from antitrust scrutiny, and requires freight rates to be published and policed by a government agency. We test whether this regulatory structure leads to the exercise of market power, and identify whether that market power resides with conferences themselves or requires the participation of carriers outside the conference. The results suggest that liner conferences are not particularly effective cartels although some market power may exist in ocean shipping. Market concentration may be a contributing factor to this market power. (JEL L12, L43, L92, K21)     

Whatever happened to the monopoly theory of labor unions?

This paper argues that unions act in accord with the conventional cartel or monopoly model. The basic premise is that it is useful to ask what a “union maximizes” because if more wealth is available, union decision-makers have an incentive to capture it for themselves or their membership. In the formal model, unions negotiate wage rates which maximize the monetary surplus above the supply price of labor, providing an endogenous answer to the questions of how union employment and wages are simultaneously determined. Comparative static analysis yields empirical predictions about the behavior of union employment, wage rates, and union-nonunion wage differentials. I would like to acknowledge helpful comments by Richard Anderson, Ray Battalio, Hugh Macaulay, Michael Ormiston and Akira Takayama on earlier drafts of this paper. The usual caveat applies.     

TRANSACTION COST, TWO-PART TARIFFS, AND COLLUSION

When two goods exhibit demand complementarity, the sellers would generally charge lower prices under collusion than under rivalry–a cartel internalizes cross effects that independent firms ignore. For the particular case of "two-part" tariffs consisting of entrance fees and per-unit prices, this paper shows that entrance fees are indeed lower under collusion than under rivalry, but that per-unit prices are unaffected. The demand complementarity arises from transaction costs borne by consumers who enter the market. The policy implication is that collusion can be socially preferable to competition in the presence of such transaction costs.     

Recent ASA Presidents and ‘Top’ Journals: Observed Publication Patterns,Alleged Cartels and Varying Careers

It has been common for studies presented as about American sociology as a whole to rely on data compiled from leading journals (American Sociological Review [ASR] and American Journal of Sociology [AJS]), or about presidents of the American Sociological Association [ASA], to represent it. Clearly those are important, but neither can be regarded as providing a representative sample of American sociology. Recently, Stephen Turner has suggested that dominance in the ASA rests with a ‘cartel’ initially formed in graduate school, and that it favors work in a style associated with the leading journals. The adequacy of these ideas is examined in the light of available data on the last 20 years, which show that very few of the presidents were in the same graduate schools at the same time. All presidents have had distinguished academic records, but it is shown that their publication strategies have varied considerably. Some have had no ASR publications except their presidential addresses, while books and large numbers of other journals not normally mentioned in this context have figured in their contributions, as well as being more prominent in citations. It seems clear that articles in the leading journals have not been as closely tied to prestigious careers as has sometimes been suggested, and that if there is a cartel it has not included all the presidents.     

The 3×1 Programme and criminal violence in Mexico

Are levels of criminal violence lower where emigrants collaborate with the state authorities in the funding and provision of public goods and services? In this article, I examine the causal effect on violence levels in the municipalities participating in Mexico's Three‐for‐One (3×1) Programme for Migrants. Using municipal‐level data for the period between 2001 and 2010, the analysis shows that the implementation of this programme led to an increase in violence in the municipalities in question, and that this effect is driven by the ‘war on drugs’ initiated by the Mexican government in 2006. Because cartels splinter when kingpins are captured, they look for sources of revenue other than drug smuggling. The budgetary gains obtained via the 3×1 Programme inadvertently increased the returns of extortion and directed the attention of organized criminals to the participant municipalities. The evidence highlights some of the unintended effects that the leveraging of emigrants' money may have in home countries where governments make the so‐called ‘kingpin strategy’ a centrepiece of their security strategy.     

THE 1985-86 OIL PRICE COLLAPSE AND AFTERWARDS: WHAT DOES GAME THEORY ADD?

This paper focuses on the strategies used by OPEC to generate cartel profits over the period 1983-90. The evidence supports the hypothesis that OPEC adopted a swing producer strategy from 1983 to 1985. But when Saudi Arabia's profits fell below the level of Coumot profits in the summer of 1985, it abandoned the role of swing producer, driving prices to the Cournot level. Subsequently, Saudi Arabia appears to have adopted a tit-for-tat strategy designed to punish excessive cheating by other OPEC members. Based on these findings, the strengths and limitations of game theory are assessed.     

Powers and Limits of Transnational Corporations: The Case of ADM

Abstract This analysis employs the case of lysine price fixing involving the food‐processing transnational corporation (TNC) Archer Daniels Midland (ADM) and Asian‐based firms. In an “economy and society” conceptual framework grounded in the sociology of agriculture and food, we investigate the powers and limits of TNCs in the global era. We argue that TNCs maintain significant powers which allow them to avoid the laws and regulations of nation‐states. ADM was able to organize an illegal global cartel to control the world production and price of the feed supplement lysine. In addition, TNCs' actions in the global arena are limited by their inability to trust business partners and to organize and maintain systems of social control; these roles historically have been played by the nation‐state. We conclude that despite their significant powers, TNCs' contradictory position in the global arena provides opportunities that can be used to democratize society.     

Patents as a Measure of Technology Shocks and the Aggregate U.S. Labor Market

In a market-clearing labor market model, cointegration arises between labor services, real wages, and I(1) technology shocks with two cointegrating vectors in the error correction VAR from the market. Using patent data to measure technology shocks, patents are found to be I(1), they are cointegrated with aggregate measures of labor services and real wages, and there are two cointegrating vectors in the estimated VAR as implied by the model. Parameter instability is observed in estimated cointegrating vectors. The model's assumptions and implications are supported in data prior to the formation of the OPEC cartel but not in other subsamples studied.     

Necropolitics, narcopolitics, and femicide: gendered violence on the Mexico-U.S. border

In 1993, a group of women shocked Ciudad Juárez, Chihuahua, with the news that dozens of girls and women had been murdered and dumped, like garbage, around the city during the year. As the numbers of murders grew over the years, and as the police forces proved unwilling and unable to find the perpetrators, the protestors became activists. They called the violence and its surrounding impunity "femicide," and they demanded that the Mexican government, at the local, state, and federal levels, stop the violence and capture the perpetrators. Nearly two decades later, the city's infamy as a place of femicide is giving way to another terrible reputation as a place of unprecedented drug violence. Since 2006, more than six thousand people have died in the city, as have more than twenty-eight thousand across the country, in relation to the violence associated with the restructuring of the cartels that control the production and distribution of illegal drugs. In response to the public outcry against the violence, the Mexican government has deployed thousands of troops to Ciudad Juárez as part of a military strategy to secure the state against the cartels. In this essay, I argue that the politics over the meaning of the drug-related murders and femicide must be understood in relation to gendered violence and its use as a tool for securing the state. To that end, I examine the wars over the interpretation of death in northern Mexico through a feminist application of the concept of necropolitics as elaborated by the postcolonial scholar Achille Mbembe. I examine how the wars over the political meaning of death in relation both to femicide and to the events called "drug violence" unfold through a gendering of space, of violence, and of subjectivity. My objective is twofold: first, to demonstrate how the antifemicide movement illustrates the stakes for a democratic Mexican state and its citizens in a context where governing elites argue that the violence devastating Ciudad Juárez is a positive outcome of the government's war against organized crime; and second, to show how a politics of gender is central to this kind of necropolitics.     

Schengen's Soft Underbelly? Irregular Migration and Human Smuggling across Land and Sea Borders to Italy

La migration illégale à destination de l'Italie ou passant par ce pays est généralement associée dans l'esprit des gens à l'image de centaines, voire de milliers de migrants traversant la Méditerranée entassés dans de vieux rafiots se maintenant tout juste à flot. On considère souvent que les traversées de ce type sont la preuve de l'existence de cartels criminels qui seraient structurés hiérarchiquement, centralisés, extrêmement bien organisés et actifs au niveau mondial. Le seul problème avec de telles idées reçues est qu'elles ne concordent absolument pas avec les faits dont on dispose et n'ont pas grand chose à voir avec la réalité concrète des systèmes de migration illégale. Cette étude passe en revue un certain nombre de dossiers de tribunaux italiens concernant diverses organisations qui opèrent aussi bien au travers des frontières terrestres que maritimes. Elle montre comment de telles organisations opèrent en tenant compte de diverses spécificités locales et contraintes structurelles.     

TOWARD A THEORY OF FRAMES AND REFRAMING: THE SOCIAL NATURE OF FRAMES*

The therapeutic use of reframing is fundamental to strategic therapy, yet we lack an adequate conceptual scheme for understanding the critical elements of effective reframings. Some background for the concepts of frame and reframing are provided, along with clinical examples. Much of the existing literature links reframing to what has been termed “radical constructivisim,” a theory that knowledge is a personal construction, a creation, rather than a discovery. Both the contribution and the limitations of radical constructivism are noted. It is criticized for minimizing the extent to which individuals' construction of their predicaments are social in nature and an adaptation to influences that are independent of individual cognitive activity. Clinical imlications of this perspective are explored.