Thorstein Veblen
Review author to: 'Kartell und Trust: Vergleichende Untersuchungen 
über dem Wesen und Bedeutung'. By S. TSCHIEVSCHKY. 
Göttingen: Vandenhoeck & Ruprecht, 1903. 8vo, pp. iv + 129.
The Journal of Political Economy, Vol. 11, No. 4. (Sept., 1903), 
p. 657-658.
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To leave no doubt as to the drift of the following discussion, I 
wish to emphasize that to my mind the comprehensive organization 
of industry, whether in the form of cartells or of trusts, is a 
necessity growing out of the current individualistic business 
methods. More particularly, I regard the cartell as a form of 
organization that has the promise of a very large place in the 
future development, especially of continental industry (preface.)

The reason assigned for this favorable view of the cartell, as 
a practicable expedient for the industry of the continent, is 
the greater degree of identification of the business men of the 
continent with some one business concern. This gives the 
continental business concerns a quasi-personal character, in 
greater measure than the American or even the English, and so 
insures them a degree of initiative and consistent business 
policy such as the latter frequently lack. Hence the cartell, 
which leaves the corporate identity of the underlying concerns 
undisturbed, permits a larger net advantage to be gained from 
combination, since the advantage of combination is gained 
while that of particular initiative is not lost.
Dr. Tschievschky offers a very sane discussion of the bearing 
of [658] trust policy, especially as relates to the questions 
of capitalization and crisis (pp. 89-105). It is, as has been 
argued in detail by E. S. Meade in the case of the United 
States Steel Corporation, e.g., to the interest of the 
individual business men concerned to overcapitalize the 
corporation, in the sense that a large nominal capital will 
yield larger net gains to the promoters and to the former 
owners of the underlying companies; although the resulting 
corporation as such may not gain, or may not gain 
proportionately. Indeed, the high capitalization may place 
the corporation at a disadvantage. It may easily lead to a 
discrepancy between capitalization and earnings, and so may 
lead to cut-throat competition and eventual over-production 
and crisis. Particularly may the result be that, while the 
trusts succeed in securing their own ends, they do so at the 
cost of the rest of the industrial community, by throwing the 
pressure of competition on the rest, through price variations 
and the like, and so bringing on a general depression which 
may in the end spread even to the industries within the trust.
V.