APPENDIX

PRICE CONTROL EXPERIENCES IN INDUSTRIALIZED COUNTRIES

PRICE CONTROL AS COUNTERINFLATIONARY POLICY

115

The aim of this appendix is to briefly present experiences of price control carried out in industrialized countries since the end of World War II.

The book has mainly devoted itself to the analysis of the impact of public price control on the industrial structure of the same industry in four countries; but several countries, as mentioned above, constrained price increases of various goods, as counter inflationary policy.

In the past, there have been many experiments of price control by governments.1 The first well-known price control act was the Diocletian's Edict in 301 AD, when the Roman Emperor fixed the maximum prices of 900 goods?

Governments have usually introduced a price ceiling in high-inflation periods, especially in time of war, when the supply of raw materials and foodstuffs tends to fall while increasing expenditure on the defense program, supported by money-supply expansion, brings about an increase in aggregate demand for goods and services. Governments thus fix a maximum price level to curb consumers' expenditure, especially on basic foodstuffs, and thus regulate public expenses. In order to avoid shortages and discourage the black market, governments must introduce rationing as well as legal measures to punish infringements of price contro1.3

As a matter of fact, final price control, as counterinflationary policy, is an ambiguous means of ruling the economy: the basic assumption is that prices can be fixed regardless of the specific market condition of supply and demand, whereas the aim is to induce adjustment in order to reach a new market equilibrium. Public price fixing is therefore a shock imposed

1. A good survey of price control experiences in the past has been made by R. L. Schuttinger, 'A Survey of Wage and Price Controls over 15 Centuries', in The Illusion of Wage and Price Control, ed. M. Walker (Frazer Inst, Vancouver, 1976).

2. H. Mitchell, 'The Edict of Dioc1etian', Canadian Journal of Economics and Political Sciences (February, 1947).

3. Concerning price control in time of war, see F. W. Taussig, 'Price Fixing as Seen by a Price-Fixer', The Quarterly Journal of Economics (February, 1919); H. C. Sauvain, 'The Problem of Price Control', in Economic Problem of War, ed. G. A. Steiner (New York, 1942); and, of course, J. K. Galbraith, A Theory of Price Control (Cambridge: Harvard University Press, 1952).

116

upon the market forces on the assumption that prices can be fIxed without intervening 'ex ante' on the quantities subject to transactions, but also with the realistic expectation that this shock is bound to bring about changes 'ex post' in the conditions of supply and demand.4

Experiences in the following countries will be discussed: Belgium, Holland, West Germany, France, Italy, the Republic of Ireland, the United Kingdom, Austria, Sweden, the USA, Canada, Australia, New Zealand, and Japan. In the most recent experiments, all of these countries have frozen the prices of nearly every commodity for a defInite period, followed by stages of more flexible controls and wage policies. Some countries have recently abolished price control and enforced commissions promoting competition.

CHARACTERISTICS OF PRICE CONTROL

There is no doubt that the initial stage (price freezing) produces positive effects in the short run. The initial hypothesis is based on the possibility of diluting through time the inflationary impact of exogenous increases in raw material prices, thus preventing the development of self-fostering inflationary expectations. After this stage, however, the maintaining of control hinges on the possibility of translating the increasing costs of production into productivity increasing rationalization processes - while fInal prices are frozen; thus, by defInition, price control becomes a long-term instrument designed to influence the production structure and alter behaviour patterns steadily.

The restriction of control to the large corporations, as most of the experiments have done, is based on the assumption that such corporations are actually the price leaders of their respective markets and that, therefore, by controlling their behaviour patterns, it is also possible to influence the behaviour patterns and the structural changes of all other businesses operating in the relevant markets. But, in fact, if no suitable measures are taken in order to ensure the continuity of the control action when passing from the initial short-term stage (which focuses on expectations) to the long-term stage (where the focus is on the rationalization of behaviour patterns and, therefore, on the structural changes), this leads to the apparent freezing of the behaviour of large corporations themselves, and to the creation of a strong dynamic thrust above and beyond the boundaries set by the law (for instance, creation of smaller companies in order to avoid control). 5

Thus, as time goes by, the goal of price control changes. In fact, the fIrst

4. J. Backman, "Direct Price Fixing", Southern Economic Journal, October 1936, and J. Backman, "Government Control of Prices", Planned Society: Yesterday, Today, Tomorrow, (F. MacKenzie, New York, 1937).

5. J. R. Gould - S. G. Henry, "The effects of Price Control on a Regulated Market", Economica, February, 1967.

117

goal, i.e., reshaping expectations, can be achieved because it entails a decision or an act of will on behalf of goverment authority to undertake a definite control action. The consolidation of this result, however, requires careful control of individual behaviour patterns so as to reach a structural arrange­ment capable of engendering collective behaviour patterns better suited to the preestablished economic policy goals.

Price control must become, then, an integral part of government's economic policy action: (a) because the behaviour adjustment set off by price control cannot be implemented by acting on prices alone, but requires the adoption of other tools as well, and (b) because the orientation that is to be given to the behaviour patterns can only be established in advance by referring to the overall economic policy.

The degree to which the tools are congruous with the actual stage of price control becomes, therefore, the corner-stone in order to guarantee successful government action designed to regulate individual behaviour patterns dynamically.

The frame of reference of such action, however, can be neither an indi­vidual product nor an individual business enterprise because both items are too limited to provide us with a description of the entire economic structure. The frame of reference can be supplied only by the production cycle itself, within which products are transformed and in which businesses may operate on the basis of a number of different mutually integrating relationships. It is obvious, then, that the focus of control can no longer be final price alone, but that control must instead be applied to the pricing process itself in the wider framework of the production cycle. The British Price Commission 1977-1979 is the best example of switching from price control to pricing control.

Failure to view price control in all its complexity, and hence to adapt goals and means to a constantly changing reality in the framework of the rules established by government authority, could result in the progressive weakening of the very authority of the government.

The bitter fruit borne by the Italian experience of general price freezing (1973-1974) is today represented by the widespread lack of confidence in the ability of the government and public administration to carry out effectively an action as complex as an articulate price interventi~n.

PRICES CONTROL EXPERIENCES

This analysis deals with 14 countries: nine in Europe (seven EEC members) and two in North America, as well as Australia, New Zealand, and Japan. Most of the present price policies derive from the legislation passed during World War II and reviewed in the early 1950s.6 Much of this legislation

6. See OEeD, "Le contr6le des prix, applications nScentes",Perspectives Economiques, (Paris, July 1972).

118

was changed and strongly reenforced in 1973, during the period of the spectacular price increase in oil products.

In that period, in order to curb expectations of extraordinary inflation, price freeze and control was initiated in all Western countries. This emergency intervention belonged to a framework of recurrent statutory control of prices and incomes, enforced by governments in order to stabilize economic fluctu­ation. Developments of price control policies are summarized in Table 1.

ITALY

Italy's experience in the indusfrial price control area has developed over several decades, which can be divided into the following four periods: mid-1930s-1944; 1944-1973; July 1973-July 1974; after 1974.

Up to 1944, price control was thought of as a wartime economic instru­ment. Through its bureaucratic structure, the State controlled the final price of a number of scarce products. In 1944, the Comitato Interministeriale Prezzi (CIP) and an administrative apparatus were established in order to achieve permanent control over the price of a limited number of goods and services. In summer 1973, in the wake of the events triggered by the oil crisis, the government decided to freeze prices for a number of consumer goods and products of the larger companies. The following summer, however, such action - which had by then partially developed into a scheme allowing for specific increases through due authorization - was abandoned altogether; this meant reverting to the 'price administration' situation that had already been tried in the past.

In July 1973, supported by widespread consensus, the government decided to enforce a 'general' price freeze in order to cope with the exceptional inflationary pressure exerted by the oil crisis. Decree n.425 provided for a control of prices recommended by big concerns only; indeed, this decree stated that only 'business enterprises producing or distributing goods, whose turnover exceeded 5 billion lire in the first semester of 1973, must register their price lists with the CIP office.' Decree n.427 froze the retail prices of 21 basic goods. This action was based on an initial 90-day freeze; sub­sequently, controlled prices could vary 60 days after any authorization of the CIP granting an increase on registered price lists.

Following the impact of the first stage, which undoubtedly led to positive results, the effectiveness of government action declined rapidly. The two decrees provided for an intervention spectrum that did not go as far as covering the entire economy, and in particular did not cover all the various production stages that lead to the determination of final list prices. Businesses did, in fact, get around such provisions by selling their products through the mediation of other concerns that were not subject to the decree, and by replacing the listed goods with other goods not subject to the freeze.

Tab

le 1

. P

rice

con

trol

exp

erie

nces

in s

ome

OE

CD

cou

ntri

es.

Obj

ect

of

cont

rol

Sta

rtin

g po

int

Leg

isla

tion

Pro

per

auth

orit

ies

Con

trol

led

good

s

Con

trol

led

subj

ects

Pre

noti

fica

tion

Exe

mpt

ions

San

ctio

ns

Fra

nce

Pric

es a

nd m

argi

ns

1945

Ord

ers

n. 4

5.14

83

n.4

5.1

48

4

of

30/6

/194

5

Dir

ecti

on G

ener

ale

de la

C

oncu

rren

ce e

t de

s P

rix

(unt

il 1

978)

. C

omm

issi

on d

e la

C

oncu

rren

ce

Gen

eral

con

trol

S

ecto

rial

agr

eem

ents

Man

ufac

ture

rs,

reta

iler

s, s

ervi

ces

Pri

ce l

ists

mus

t be

re

gist

ered

wit

h D

irec

tion

G

em:r

ale

des

Pri

x

Adm

inis

trat

ive

fine

s

Bel

gium

Pric

es a

nd m

argi

ns

1945

Ord

ers

22.1

.194

5 A

ct.

30.7

.197

1 2

2.1

2.7

1-2

4.1

2.7

5

Min

iste

r o

f E

cono

mic

A

ffai

rs; P

rice

Con

trol

O

ffic

e

Gen

eral

con

trol

S

ecto

rial

and

fir

m

agre

emen

ts

Man

ufac

ture

rs,

reta

iler

s, s

ervi

ces

The

lar

gest

fir

ms

mus

t gi

ve p

reno

tifi

cati

on

wit

hin

3 m

onth

s

Sm

all

firm

s

Adm

inis

trat

ive

fine

s

Ital

y

Max

imum

pri

ces

1944

Act

. 19

.10.

1944

n.

347

23.

4.19

46 n

. 36

3 22

. 4

.l9

47

n.

83

24.

7.19

73 n

. 42

5 24

. 7.

1973

n.

427

Pri

ce c

ontr

ol c

omm

itte

e (C

IP)

Con

trol

on

som

e go

ods

('4

4-'

73

) (1

974)

. G

ener

al c

ontr

ol (

VII

-197

3/

VII

-197

4)

Man

ufac

ture

rs (

adm

inis

tere

d pr

ices

); la

rges

t pr

ices

and

ba

sic

good

pro

duce

rs

Fir

ms

mu

st g

et e

xpli

cit

adju

dica

tion

of

pric

e ri

ser

by C

IP,

for

the

con

trol

led

sect

ors

Ger

man

y (F

RG

)

Pri

ces

and

serv

ices

1936

It s

tem

s fr

om t

he f

reez

e de

cree

of

Nov

embe

r 2

6th

19

36

Ant

itru

st A

ct 1

95

8-1

97

3

Min

iste

r o

f F

eder

al E

cono

my

who

dec

entr

aliz

es h

is a

utho

rity

in

Lan

ders

; F

eder

al C

arte

l O

ffic

e

'Str

ateg

ic g

oods

'

Eve

ry c

ontr

olle

d su

bjec

t is

as

ked

for

info

rmat

ion

Fin

es

- -\0

Tab

le 1

. co

ntin

ued

Obj

ect

of

cont

rol

Sta

rtin

g po

int

Le g

isla

ti 0

ns

Pro

per

au th

orit

ies

Con

trol

led

good

s

Con

trol

led

subj

ects

Pre

noti

fica

tion

s

Exe

mpt

ions

San

ctio

ns

The

UK

Pri

ces,

wag

es m

argi

ns, s

hare

s an

d re

nts

1965

Whi

te p

aper

196

5. C

ount

er­

infl

atio

n A

ct 1

972.

Whi

te p

aper

19

73, C

ount

er-i

nfla

tion

(P

rice

an

d P

ay C

ode)

Ord

er 1

973,

C

ount

er-i

nfla

tion

(P

rice

Cod

e)

Ord

er 1

977

Pri

ce C

omm

issi

on '

73

-'7

9

Gen

eral

con

trol

Man

ufac

ture

rs, w

hole

sale

rs

prof

essi

onis

t' in

do S

ervi

ces

prod

.

I an

d II

cla

ss f

irm

s m

ust

give

re

port

s to

Pri

ce C

omm

issi

on e

very

3

mon

ths,

III

cla

ss f

irm

s d

on

't h

ave

to g

ive

any

pren

otif

icat

ion

Exe

mpt

ion

very

muc

h li

mit

ed

to c

oal

and

stee

l

Adm

inis

trat

ive

fine

s

USA

Pri

ces,

wag

es a

nd p

rofi

t m

argi

ns

of

firm

s

1970

Def

ence

pro

duct

ion

Act

A

men

dmen

ts 1

970

Cos

t o

f liv

ing

Cou

ncil

, P

ay B

oard

197

1

All

basi

c go

ods

Man

ufac

ture

rs, T

rade

com

pani

es

I an

d II

cla

ss f

irm

s m

ust

give

re

port

s to

Pri

ce C

omm

issi

on

ever

y 3

mon

ths,

III

cla

ss f

irm

s d

on

't h

ave

to g

ive

any

pre­

noti

fica

tion

Exe

mpt

ions

for

agr

icul

t. s

ecto

r

Infr

inge

men

ts a

re f

ined

by

redu

cing

pri

ces

and

repa

ying

cu

stom

ers

Hol

land

Pri

ces

and

wag

es

1945

Spe

cial

pow

ers

decr

ee 1

97

4-

1977

ord

inan

ce 'g

ood

and

serv

ices

pri

ces'

Min

iste

r o

f E

cono

mic

Aff

airs

Mai

n go

ods

and

serv

ices

in

the

dom

esti

c m

arke

t

Man

ufac

ture

rs, d

istr

. pr

od.

serv

ices

Th

e la

rges

t fi

rms

mus

t gi

ve

pren

otif

icat

ion

wit

hin

a m

on

th;

deal

ers

are

exem

pted

fro

m

pren

otif

icat

ion

N o

Tab

le 1

. co

ntin

ued

Obj

ect

of

cont

rol

Sta

rtin

g po

int

Leg

isla

tion

s

Pro

per

auth

orit

ies

Con

trol

led

good

s

Con

trol

led

subj

ect

Pre

noti

fica

tion

s

Exe

mpt

ions

San

ctio

ns

EIR

E

Goo

ds,

serv

ices

and

mar

gins

1970

Pri

ce A

ct.

1958

. Pr

ice

(am

endm

ent)

Act

. '7

2. P

rice

(S

tabi

lisa

tion

of

Pro

fit

mar

gins

o

f re

tail

ers)

ord

er 1

973

Min

iste

r o

f In

dust

ry a

nd T

rade

, N

atio

nal

Pri

ce C

omm

issi

on

Con

trol

on

basi

c go

ods

Man

ufac

ture

rs, w

hole

sale

rs

The

larg

est

firm

s m

ust

give

2

mon

ths'

pre

noti

fica

tion

, oth

ers

21 d

ays'

pre

noti

fica

tion

Sm

all f

irm

s; a

gric

. pr

oduc

e,

bank

int

eres

t an

d ex

port

ed g

oods

pr

ices

Aus

tria

Goo

ds,

serv

ices

an

d w

ages

1962

'Gen

tlem

en's

Agr

eem

ents

'

Par

itii

tish

e K

omm

issi

one

Gen

eral

sup

ervi

sion

Man

ufac

ture

rs

Aut

hori

ties

can

ask

for

in

form

atio

n o

n e

ach

cont

roll

ed

subj

ect

Imp

ort

ed g

oods

and

ser

vice

s an

d ne

w p

rodu

cts

are

exem

pted

Sw

eden

Goo

ds s

ervi

ces

and

mar

gins

1956

Pri

ce c

ontr

ol d

ecre

e in

196

8.

Res

tric

tive

reg

ulat

ions

dec

ree

in 1

968

Nat

iona

l S

wed

ish

offi

ce f

or

pric

es a

nd t

rust

s

Par

tial

con

trol

on

each

pro

duct

Man

ufac

ture

rs, w

hole

sale

rs

Cof

fee

and

mar

gari

ne p

rodu

ce

mus

t gi

ve p

reno

tifi

cati

on

Win

e-sp

irit

s an

d pu

blic

ex

pend

itur

es

..- N

Tab

le 1

. co

ntin

ued

-N N

Can

ada

Aus

tral

ia

New

Zea

land

Ja

pan

Obj

ect

of

con

tro

l G

uide

-lin

es f

or w

ages

G

ross

pro

fit

mar

gin

Pri

ce a

nd p

rofi

ts

Ric

e pr

ice

and

prod

ucti

on

pric

es, s

hare

s an

d re

nts

Sta

rtin

g p

oin

t 19

69

1973

1

94

8

1971

Leg

isla

tion

s A

nti-

infl

atio

n pr

ogra

m

Pri

ce J

usti

fica

tion

Act

. C

omm

erce

Act

. 19

75

19

69

19

73

Sta

bili

sati

on o

f P

rice

R

egul

atio

n o

f 19

74

Pro

per

auth

orit

ies

Ant

i-in

flat

ion

Boa

rd

Pri

ce J

usti

fica

tion

Tri

buna

l D

epar

tmen

t o

f T

rade

M

inis

ter

of

Pub

lic

Fin

ance

19

75.

Pri

ces

and

1973

in

com

es C

omm

issi

on

'69

Con

trol

led

good

s G

ener

al c

ontr

ol

Gen

eral

con

trol

C

lass

A a

nd B

goo

ds

Ric

e as

bas

ic g

ood

Con

trol

led

subj

ect

Man

ufac

ture

rs, w

hole

-M

anuf

actu

rers

an

d w

hole

-M

anuf

actu

rers

, who

lesa

lers

sa

1ers

sa

lers

uni

t 19

76

and

serv

ice

prod

uce

Pre

noti

fica

tion

s A

nnua

l rep

orts

for

all

T

he la

rges

t fi

rms

mus

t gi

ve

Pre

noti

fica

tion

cri

teri

a fo

r fi

rms;

tri

mes

tria

l fo

r pr

enot

ific

atio

n to

th

e b

oth

cla

sses

goo

ds s

imil

ar

the

larg

est

ones

. pr

ices

Jus

tifi

cati

on T

ribu

nal

to U

.K.

ones

.

Exe

mpt

ions

O

nly

for

firm

s op

erat

ing

Ver

y fe

w

unde

r pa

rtic

lar

con-

diti

ons

San

ctio

ns

Adm

inis

trat

ive

fine

s F

ines

In

frin

gem

ents

are

fin

ed

123

Indeed, new distribution companies sprang up everywhere, the demand for services of smaller businesses grew, and goods formally subject to con­trol were exported and subsequently reimported at free-market prices. Since no clear definition of the subject of control was available, there was evasion in the form of production-cycle-destructuring processes. While inflationary expectations concerning the postcontrol period grew, the price control experiment was drawing to a close by spring 1974.7

The 1973-74 program was an addition to a longstanding pricing policy implemented by government authority, the CIP, concerning a large number of industrial prices and service rates. The CIP fixes, directly or through the local boards, the rates of most services (e.g., water supply, telephone, rail­ways, hotels, and transportation) and the prices of a number of industrial products (oil products, fertilizers, pharmaceuticals, detergents, pasta, milk, sugar, and, of course, cement). Thus, up to 1973 and after 1974, a 'public price administration' situation characterized the pricing of several industrial products. In these cases, price control - or better price 'administration' -by public authority resulted in a market-regulating action at a time when demand was growing; this action was designed to prevent (or at least to reduce) sectorial growth from producing structural changes that might have altered the existing balance among the various businesses competing in the sector at that particular stage. After 1974, soaring inflation and a fall in the demand added elements of uncertainty and instability to the basic picture, which external regulation could no longer control.

BELGIUM

In Belgium, the present price control legislation dates back to the wartime and has been changed frequently.s The Minister of Economic Affairs has the power to control prices of goods and services. He can forbid the sale of a product if the price is considered too high in terms of cost, market condition, and 'reasonable' profit (the so-called 'normal' price).

Most prices are controlled by the Minister of Economic Affairs, who uses a highly discretionary power to accept or delay the preindicated price increases (not beyond six months). Importers and manufacturers have to give a three-month notice before they can increase their prices. Maximum prices and margins are fixed for some goods and services, particularly basic products; these prices are fixed for six months, but this can be prolonged.

An industry as a whole can reach an agreement with the government to regulate price increases; since 1971, firms are allowed to reach individual

7. The best analysis on the Italian experience of price control is F. Gobbo, Il controllo dei prezzi industriali industriali in Italia, Il Mulino, Bologna, 1982.

8. Ministere des Affaires Economiques, La politique des prix en Belgique (Bruxelles, 1977).

124

agreements with the government. Retail prices are directly related to whole­sale prices in manufacturing industry and import through specific margin controls. Maximum prices and margins are fixed for meat, milk, potatoes, pasta, fruit, vegetables, and fertilizers. However, from 1969 on, only seven 'contract programs' have been agreed upon between industrial associations and the government, five of which are still working, the most important concerning oil products. The domestic price is fixed according to a pre­agreed formula based on exogenous costs and fixed margins. Maximum prices and margins for individual firms have been more frequent: in three years (1976-78), there have been 154 procedures against specific firms, and the Minister has fixed a maximum price in 97 cases.

A permanent Board for Price Regulation has been established to give informal advice to the Minister of Economic Affairs, who makes the formal decisions for each case. This technical committee has several representatives in charge of each industrial or related field. Recently 'ad hoc' commissions have been appointed to control prices and supervise pricing of strategic goods, such as petrolium products, gas and electricity, medical treatment, and pharmaceutical products.

The Belgian price legislation is on the whole quite confused; because of this, it can be variously enforced in periods of inflation. The intervention system is really working dependent upon the general economic situation. Recently, the Planning Office estimated that the price control policy introduced by the government has contributed positively (about 2%) to reduce the impact of raw material price fluctuations on the domestic economy; this is considered positive, since the country is small and quite open to international trade and, therefore, to the erratic movement of international prices.

FRANCE

In France, the price control experience dates back to 1945, and only recently has the government substituted competition policy for the more traditional approach based on price surveillance.9 As mentioned in chapter 5, from 1945 to 1965 governments alternated between price freezing and the relaxing of control; At the beginning of 1965, a new system of price control based on agreements with industrial associations on behalf of firms was tried.

Since 1971, the government has countered price increase tendency by enforcing stricter contracts according an annual price increase plan. After a short period of relaxation, at the end of 1976 a price freeze was imposed for three months; afterward a progressive liberalization was promoted.

9. J. Sheahan, "Problems and possibilities of industrial price control, postwar French experience",American Economic Review, 1961.

125

The Direction Generale de la Concurrence et des Prix was abolished and replaced by the Commission de la Concurrence appointed by the Minister of Economic Affairs to promote competition and supervise pricing methods in oligopolistic markets.

Price control has been a very important feature of French economic policy for decades. It has become a permanent economic policy, enforced differently depending on the general aim of governments for both the short term and the long term.

WEST GERMANY

In West Germany, price control is supposed to be connected with compe­tition policy, which means that in the long run it is impossible to affect prices without regarding market structure. According to the Second Cartel Act (1973), mergers are controlled as well as monopolistic conduct. All of this aims at protecting the consumer against unfair trading.

Natural monopolies and dominant positions are regulated by anti-trust authority through price-fixing methods; i.e., transports, insurances, health services, electricity, energy, water, etc., are regulated. Although the law should allow government to control the prices of every sector, except wages, in West Germany price control is considered as an uncommon means to deter oligopolistic price fixing. In fact, the abuse has to be proved in order to enable public price fixing by the antitrust authority. Legal actions against oil companies (1974) and Hoffman-La Roche (1980) were rejected by the Federal Appeals Court because the Federal Cartel Office was considered slow in proving the abuse of price fixing.

THE UNITED KINGDOM

In the United Kingdom, price and income policy dates back to the time of war. In the late 1960s, a National Board of Income and Price Policy was set up in order to supervise wage and price tendencies.to

In 1973, after a brief period of price freezing, a Price Commission was established with its chairman appointed by the Secretary of State for Industry and Trade, and six part-time members appointed by industrial associations and unions.

This Commission had the power to enforce price codes, hold enquiries, and freeze or require prenotification of price increases. In the beginning, the aim of the Price Commission was to control price increases in term of

10. R. Evely, "The Effects of the Price Code", National Institute Economic Review, August, 1976, and D. J. Gribbin, "The United Kingdom 1977 Price Commission Act and Competition Policy", The Antitrusf!Bulletin, Summer 1978.

126

cost increases and to compel price reductions as a result of productivity gains. To implement its goal, the Commission had specific and proper powers, both over firms and sectors. These powers were enforced by a series of very precise mechanisms agreed upon between government and social groups, i.e., to absorb partial labor cost increases.

However, general control regulations have changed since 1973, according to different stages of inflation, to such an extent that recently (1977) price and cost control was abolished, and a wider system of enquiry into enter­prises and industries was established in light of the previous experience, e.g., the Monopolies and Mergers Commission, established since 1948.

As described in chapter 3, the New Price Commission (1977-1979) has an innovative approach to price control, based on the assumption that price increases depend on increases in exogenous commodities price or inefficiency level and market power increases. Price control concerned the so-called 'possible cost', fixed on the basis of the most efficient production system, on margins of enterprises playing a dominant role in the industry and market. In fact, price control became an intervention to orient industrial structural adjustments.

THE NETHERLANDS

In the Netherlands, there have been different stages of price control: years of strict price regulation followed by complete-release price periods followed by voluntary schemes. Since 1965, the Minister of Economic Affairs himself has been regulating prices according to the development of wage policy.

These price interventions concern the economy as a whole. Moreover, maximum prices of some commodities, manufactured goods, and services are individually controlled. As far as a general regulation of the entire economy is concerned, prices can be raised only because of exogenous cost increases. There is a profit margin regulation for retailers, but the Minister of Economic Affairs can advise firms to freeze profit margins under specific circumstances. Large firms are compelled to give the Minister prior notification of price increases. This is compulsory for food suppliers and some public services.

All of this implies that the price control system aims at introducing a cooling-off in price increase within an income policy scheme.

THE REPUBLIC OF IRELAND

In Ireland, the present price control system dates back to 1958, but it was revised and adjusted in 1965 and in 1972. At present, a National Price

127

Commission that was established in 1971 consists of five members appointed by firm associations, trade unions, and consumets. The chairman is an independent member appointed by the government. This commission reviews price and cost developments, and has wide powers such as freezing prices, fixing maximum prices, requiring prenotjfication of price increases, and holding inquiries into market structure.

Bread, dairy products, sugar, cigarettes, and some other goods are subject to maximum retail prices. Large firms have to give prenotification of price increases for most goods and services. Medium-sized and small firms must inform the authorities within three weeks, while the very small ones need not. Service suppliers, importers, and wholesale dealers are also compelled to give prenotification of price increases.

AUSTRIA

Austria has had price and wage control since 1962 that is based on 'gentle­men's agreements'. There is a Liaison Committee whose members are appointed by trade unions, entrepreneur and retailer associations, and chambers of commerce. The methods used by this Committee include a specific price for a list of commodities considered of strategic importance year by year, maximum price fixing for other commodities according to government suggestions, and a voluntary scheme to apply controls to residual goods.

According to control methods, price increases are to be justified by firms and accepted by proper subcommittees and, if there is no agreement, by the Liaison Committee. If the members of Liaison Committee fail to agree, the Minister of Trade himself fixes the price. Firms might refuse this price, but they seldom do because of the long procedure required.

The system is formally 'unregulated', but a series of widely accepted rules compels the trade unions and industrial associations to reach an agreement.

SWEDEN

The authority in charge is the National Price and Cartel Office (SPK) , set up in 1956, which has used several price regulations. Some prices are con­trolled (i.e. beef, pork, bread, dairy products and some building materials); for others it is compulsory to give prenotification of an intended price increase.

The SPK is in charge of price policy and promotes competition. Thus, the National Swedish Price and Cartel Office analyzes not only the short­term cost fluctuation, but also the industrial structure according to the consumer's defence.

128

The SPK watches over the price development of the whole economy by frequent investigations into retail prices and profit margins. If production structure is considered inefficient or collusive conduct is recognized, the SPK advises firms to move toward a price policy more favorable for con­sumers.

CANADA

In Canada, price control was established in 1969 with a special Price and Income Commission, which has the power of controlling the matter in the long run. Price control is considered, however, part of the income policy. Guidelines for prices, wages, shares, and rent are suggested by the govern­ment through the advice of an antiinflation office.

Controls and compulsory prenotification of increases concern mainly the output of the 300 largest firms. Both prices and margins, for which it is compulsory to refer to a certain period, are subject to control. Controls and intervention have been slowing as the inflation decreases.

THE USA

In the USA, there were significant experiences in price control during and after the First and Second World Wars. Afterward, the authorities tried to curb inflation by monetary and fiscal policies. They continued to intervene in industrial division and particularly in firms through antitrust legislation that dates back to the end of the last century.

Only in 1971, as inflation increased after the failure of voluntary agree­ments between producers and unions did the authorities decide to intervene directly through a price control program that developed until 1974 in four stages: (a) freezing, (b) maximum price control, (c) releasing, and (d) lib­eralisationY The first stage was a general price freeze for a very short time. During the second stage of price control (1972), there was the following regulation: - Firms had to justify the cost transferring on prices, deducting the positive

effects of productivity gains. - Large-scale firms had to reach particular agreements about their price

lists, fixing maximum increases. - Price increases, even if allowed according to a previous agreement, were

not accepted when they caused an increase in profit margins. - Increases in labor cost were only partially (5.5%) allowed to be applied to

prices. 11. "Price and Wage Control: An Evaluation of Current Policies". Hearings before the

Joint Economic Committee - Congress of the U.S., Wash. DC. 1972, in particular papers by W.G. Shepard; R.H. Haveman, T.W. Mirer, G.E. Brandow.

129

At this stage, there were exceptions, particularly for imports, exports, and agricultural products. The firms with a turnover of over 100 million dollars had to obtain authorization before raising prices; those with a turnover of between 10 and 100 million dollars had only to give prenotification, without having to get authorization; and the smallest firms were controlled by the appropriate commissions.

Even if the controls were compulsory, their effectiveness mostly depended on the voluntary agreement of the concerned parties. Violations were fined by reducing prices and repaying customers rather than by administrative sanctions.

AUSTRALIA

In Australia, price control started in 1973, when a Price Justification Tribunal was set up. His responsibility is to examine prices of goods offered by the largest firms which must notify price increases. The decision, made by the tribunal within a few weeks time, must consider also the market power of the firms and their previous conducts concerning prices. Bargains between firms and the tribunal are frequent. If no agreement is reached, inquiries are made and public meetings are called in which trade unions', consumers', and firms' representatives are allowed to put forward their views. The tribunal has no legal power to enforce the decisions taken during these meetings; the tribunal's decisions have to rely on the pressure of the public and the trade unions.

NEW ZEALAND

Price control dates back to 1948, but the subject was completely settled in the early 1970s in order to control prices and margins in the face of inflation. The control, ruled by the Minister of Trade and Industry, concerns the whole economy. Prenotification for each price change is compulsory. Goods and services are listed in two classes:

(1) Prices of some goods are controlled directly by the public authority; if firms do not agree, an independent commission makes the final decision.

(2) Prices and profit margins of the residual goods and services can be increased according to a guideline approved by the authority.

JAPAN

Since the early 1970s, there have been some kinds of price control. Price control is applied to agricultural products, and particularly to rice. An

130

authority regulates the price of rice in order to balance supply and demand in a basic field characterized by irregular overproduction. The aim of the government is to stabilize and promote farmers' income and improve efficiency of agricultural production. An Antistrust Commission strictly prohibits collusive conduct in domestic makets, and the Minister of Trade and Industry promotes export cartels to increase export.

EXPERIENCES WITH PRICE CONTROL AND THE AUTHORITY OF THE STATE

If we look at the articulate experiences that industralized countries have had with price control, we may conclude that it has proved to be an ambiguous measure. A basic contradiction appears when we look at price control as an antiinflationary measure: since they are unable to undertake any action regarding the elements that influence the pricing process - namely, the real causes of inflation - government authorities tend to bind the companies' final decisions, Le., the final price of their products, thus assuming that this belated intervention may lead to the desired adjustments that were not achieved in a preceding stage.

Price interventions thus lend themselves to several weaknesses and ambi­guities, which may easily result either in the discredit of any economic policy undertaken in this field or, or the contrary, in the implementation of more and more rigid and complex administrative constraints based on the con­viction that inflation may be somehow controlled only through a stricter and tigh ter regulation of the economy.

On the other hand, where price control is employed as a market-regulating measure, it proves efficient in controlling the pricing process under monopoly conditions. Where monopoly conditions exist, an official intervention designed to depress administered prices leads to increases in the supply that undoubtedly appear to be made in the interest of the public. Similarly, under such conditions, cost reductions obtained through technical improvements may be shifted onto final prices by virtue of some kind of official price control action. These positive effects relate, however, simply to strict monopoly conditions; where oligopoly is concerned, price control leads to collusive behavior that must then be subjected to continual controls so as to prevent such behavior from turning against the public interest.

This last type of action, however, can only take place in a situation where both production factor prices and demand growth are steady. Where con­ditions arise such as those of the 1970s - continual increases in the price of raw materials and in labor costs, coupled with a static demand - this kind of action regarding controlled prices interferes with the demand to undertake action with regard to final prices for antiinflationary purposes, and thus results in an unmanageable situation unless the theoretical foundations on

131

which the intervention is based are upset radically and, at the same time, available instruments are changed considerably. In other terms, one should bear in mind that the economic system resulting from the merging of less­than-perfect markets is itself a means through which inflationary processes are multiplied. Therefore, price control should not be restricted to freezing final prices, but should become the tool for supervising and controlling the pricing processes, a pricing control action where public intervention may prove its ability to make the entire economy more dynamic.12

Price control should be based on production-cycle analysis, by inquiring into how costs are created within the production processes themselves. The tasks and the goal of price control must, therefore, be that of destroying unearned income positions, thus driving the prices of the individual markets toward the levels established by the most innovative business. These are tasks that pertain to a Competition Board. In small countries open to international trade, and 'American-style' antimonopoly intervention policy is hindered by the very size of the market; some important markets are larger than the whole territory subjected to the authority of a single government; on the other hand, the limited size of the domestic markets may involve the existence of just a few or, perhaps, a single plant that is technically sufficient to fulfill the entire home demand. Under such conditions, action based on the 'a priori' prohibition of collusive actions is not feasible. Instead, it is necessary to be capable of managing the industrial structure development processes even where conditions and settings differ from one another. A price control inter­vention conceived as a measure designed to regulate the nature of the markets may succeed in performing this task in a small, open country.

This goal must be set into the wider framework of an economic and industrial policy, and one must supply whomever undertakes such inter­vention with suitable tools.

12. Franco Modigliani wrote an article in 1937 on price control as industrial policy: F. Modigliani, "Controllo dei prezzi ed economia corporativa", Commercia, August 1937, quoted by H.S. Miller,Price Control in Fascist Italy, Columbia, New York, 1938

Author Index

Allen, G.C., 3 Angelier, J.P., 25,73,81 Aspidin, J., 1, 34 Associated Portland Cement Manufac­

turers-APCM Lim., 47 Associazione Italiana Societa per Azioni,

68 Associazione Tecnico Economica del

Cemento-AITEC, 54, 55, 57,58,59, 67

Backman, J., 116 Battara, P., 3,50,60,62 Beacham, A., 24, 39 Bianchi, P., 25 Brandow, G.E., 128 BundesKartellamt (Federal Republic of

Germany), 85 Bundesverband der deutschen Industrie,

98 Bundesverband der deutschen Zement­

industrie, 87,95,97 Burns, A.R., 11

Carlson, B., 3,4 Cembureau, 8, 15, 17, 18, 30,41,54,58,

71,80,89 Cement and Concrete Association (UK), 1 Cement Makers' Federation-CMF (UK),

38,41 Cesareni, C., 57 Ceyrac, F., 73 Chamberlin, E.H., 105,111,114 Clark, J.M., 11 Comitato Interministeriale Prezzi-CIP

(Italy), 64 Commons, J.R., 11 Cook, P.L., 35 Council on Wage and Price Stability (US),

40 Cova, F., 57

Dafsa,65 Davis, A.C., 35 Dyckerhoff Zementwerke, 98

Economist, The, 36

133

European Community Commission of Restrictive Practices, 106

Evely, R., 125

Federal Energy Administration (US), 2, 4, 5,7,58

Federal Trade Commission (US), 40 Francis, A.T., 34

Galbraith, J.K., 115 Gobbo, F., 49, 123 Gould, R.R., 24, 39, 46 Greenhut, M.L., 11 Gribbin, D.J., 125

Hambidge, J., 108 Hauptverband der deutschen Bauindustrie,

86 Haveman, R.H., 128 Hay, D.A., 111 Heath, J.B., 24, 39 Heidelberger Zement, 98 Hemy, S.G., 116 HoIsted, P.E., 34 Hoover, E.M., 11 Hyton, W.P., 11

Jaeger, F.M., 108 Joint Economic Committee (Congress of

the US), 128

Loasher, S.M., 3, 11,22 Lenel, 0., 88 Lenz Wagner, K., 25, 90

Machlup, F., 11,23,69 Mader, F., 77,81 Manas, A.T., 25 Mangel, S., 87 McAvoy, P.W., 46 Mediobanca,64 Metzner, M., 85 Miller, H.S., 49,131 Miller, J.P., 86 Ministere des Affaires Economiques, 123 Mirer, T.W., 128 Mitchell, H., 115

134

Modigliani, F., 131 Monopolies and Mergers Commission, The

(UK),44 Monteel, H.T., 73 Morris, D.J., 111

National Board for Prices and Incomes-NBPI (UK), 3,29,31,42,47

Nickell, S.J., 103 Nicolle, J., 108 Norman, G., 3,4,41

Organization for Economic Cooperation and Development-OECD, 12, 15, 16, 19,20,25,26,27,30,41,42,54,71, 81,117

Orr, D.,46

Phlips,L., 11,25,77 Pratten, C.F., 3 Price Commission, The (UK), 4,5, 6, 7,

24,29,31,32,42,43,47

Redgrave, G.R., 34 Restrictive Practices Court, The (UK), 37,

38,39,47 Robinson, J., 111 Roll, L., 88, 93 Rowley,C.K., 31, 32, 109, 111

Sauvain, H.C., 115 Scitovsky, T., 112 Scherer, F.M., 3,4,9

Schuttinger, R.L., 115 Shaw, R.W., 21,41 Sheahan, J.B., 72,124 Shepard, W.G., 128 Sherman, R., 112 Smith, A., 110 Soulie, D., 73 Spackman, C., 34 Steiner, G.A., 115 Stevens, R.B., 24, 39 Stigler, GJ., 106,109,111 Sutton, C.J., 21,41 Syndicat National des Fabricants de

Ciment et Chaux-SNFCC, 74, 76

Taussing, F.W., 115

United Nations (Monthly Bullettin), 6

Vasseur, M., 73 Vernon, R., 102, 110 Voltaire, 111 Voight, F., 86

Walker, M., 115 Weiss, L.W., 3 Weyl, H., 108, 111 Wied-Nebbeling, S., 88, 93 Willmot, F.G., 34

Yamey, B.S., 24, 39 Yarrow, C.K., 31, 32

Company Index

Aberthaw (UK), 30, 31, 32 Adom, Cim.de, (F), 77,78 Aktienselskabet (Den), 17 Alsen-Breitenburger (FRG), 88 Annelise (FRG), 88 APCM-Blue Circle Group (UK), 4, 16,17,

21,23,24,29,30,31,32,33,35,36, 38,39,42,43,44,45,47,65,83,109, 113

Anic (1),54 Asland (E), 17 Atlas (US), 23

Barletta, Cem.di (1), 88 Bianche, Cim.de (F), 77,78,79 Bonner (FRG), 88 Bosenberg (FRG), 88, 89 BPCM Lim. (UK), 35 Breisgauer PZW (FRG), 88 Buderus (FRG), 90, 97 Buechl (FRG), 89 Bundner (CH), 17 Buzzi-Presa (1), 54

CBR (B), 17,65 CCB (B), 17 Cement Limited (Ireland), 17 Cementa (Sw), 17 Cementir (1), 17, 52, 53, 54,57,64,65,

69 Cemij (Ne), 17 Champagnole, Cim.de (F), 78 Chiron, Cim.de (F), 77 Ciment Franliais (F), 17,65,71,75,76,

77,79,83,108 Cimpar (Par), 17

Dennes et Lavocat (F), 77 Donopo (FRG), 88 Dotternhausen (FRG), 89 Dyckerhoff Zementwerke (FRG), 17, 65,

83,86,88,89,90,92,94,97,98,99, 108

Eerste (Ne), 17

General (Gr), 17 Gmuder (Au), 17

Hannoverische PZW (FRG), 88 Haut-Plin (F), 78

135

Heidelberger Zement (FRG), 17,83,86, 88,89,90,92,94,97,98,99,108

Helkis (Gr), 17 Hellbak (FRG), 88 Holderbank Group (CH), 17,50,86,88,

89,90,108

ICI (UK), 30, 31, 37 lise (FRG), 88 Italcementi (I), 17,50,52,53,54,64,65

Ketton (UK), 30, 31, 32 Klopstein (FRG), 77

Lafarge (F), 17,65,71,75,76,77,79,83, 108

Lafarge F.l. (F), 77,78 Lambert (Lambert-Lafarge) (F), 77, 78 Lavaziere (F), 77 La Dernoise, (F), 78 Lehigh PCC (US), 99 Loire, Cim.de la (F), 77, 79 Loisne (F), 77 London Bricks Co. (UK), 45 Lone Star (US), 65 Lorraine, Cim.de (F), 77

Marienstein (RG), 89 Marker (FRG), 89, 97,99 Marseille, Chim.de (F), 77, 79 Mediterraneenne (F), 77 Merone, Cem.di (I), 54, 65, 88 Mieback (FRG), 86, 88,90,97 Milke H. (FRG), 86, 88, 97,99 Moccia (I), 69

Nocem (No), 17 Nord, Cim.du (F), 77, 79 Nordcement (FRG), 88

Obergimpern (FRG), 89 Obourg (B), 17 Origny (F), 76, 77,78,79,88 Oy Lohiya (Fin), 17

Parlmooser (Au), 17

136

Perenstein (Fin), 17 Phoenix (FRG), 88 Poliet et Chausson (F), 71, 76, 77, 79 Pont a Vendin (F), 77 Porte de France (F), 77

Rambas d'Hagondange (F), 77,79 Readimix (FRG), 97,99 Red Triangle Group (UK), 36,44 Ribblesdale (UK), 30, 31, 32 Rosemberg (Ne), 17 Rugby (UK), 17,24,29,30,31,32,39

Saeci (1),54,69 Sehunch (FRG), 89 Schwenk (FRG), 17,89,90,92,97 Sedil (Por), 17 Segni (I), 50, 5 3,54,64,65 Seibel (FRG), 86, 88, 90, 97,99 Sementsverkemidie (leel), 17 Sippental (CH), 17 Solnhofer (FRG), 89 Spenner (FRG), 86, 88, 90 Sud-Ouest, Cim.de (F), 77, 79

Teutonia (FRG), 88 Thionvilloise (F), 77,79 Thos. W. Ward (UK), 30, 31, 32 Titan (Gr), 17 Tuborg (FRG), 88 Tunnel (UK), 17,30,31,32

Unicem-Marchino (1),17,50,52,53,54, 64,65

Uniland (E), 17

Valenciana (E), 17 Vicat (F), 17,71,75,76,77,79 Villeneuve (F), 77 Voreppe (F), 77

Weisbock (FRG), 89 Westdeutsche ZW (FRG), 88 Wiesenbock (FRG), 97,99 Wieterd (Au), 17 Wossingen (FRG), 89 Woton (FRG), 88 Wlilfratener Zement (FRG), 88 Wiirttembergische ZW (FRG), 89

Subject Index

Administered Price, 35, 37,47,60, 61, 68, 69,73,74,83,118

Advertising, 46 Ancillary Agreements, 39 Antitrust Policy, 3,22,23,24,29,32,37,

38,39,47,71,73,85,114,125,130, 131

Barriers to entry, 35,45,46,50,56,60, 66,69,81,82,86,96

Basing-point System, 11, 12,23,24,37, 45,46,47,59,60,62,69,105

Capacity Utilization, 2, 6,18, 19,20,30, 32,34,35,39,41,44,45,46,47,50, 51,53,54,56,60,62,63,64,68,69, 71, 81, 84, 86,94,95,96,97, 101, 105,108,109

Capital Requirements, 4,5, 38,63 Cartels, 22,23, 24,25,43,44,45,46,85,

87, 88, 89, 97, 100, 101,108, 112, 113

Champion Firms, 73 Clayton Antitrust Act, 23 Competition, 21, 32, 38, 40, 45,46,47,

62,65,66,71,81,82,94,100,102, 107,109,110,111,112,113

Concentration, 15, 16, 17, 18,30,50,71, 73,77,85,86,98,102,108,112,113, 114

Consumption, 15,16,29,30,45,58,59, 71,81,92,95,108,114

Cost of Production 4,5,6,7,8,9,22,23, 35,38,39,40,60,62,63,66,68,78, 86,102,106,113

Demand, 13, 19, 25,31, 32, 46,50, 58, 63, 68, 82, 83, 84, 86, 88, 99, 102, 107,109,113,116,123,130

Differentiation (product), 8, 11, 12, 22, 32,46,53,58,59,62,63,78,81,90, 101

Early History, 1,2,34,35,36,37,38,49, 50,72,86

Economies of Scale, 2, 3, 4, 7,9, 10,21, 22,42,45,50,54,57,60,68,78,81, 82,108,113

137

Efficiency, 17,38,39,40,45,46,47,57, 63,68,83,90,94,96,113

Energy Consumption, 2, 4, 5,40,53,57, 63,74,80,81,94,95,97,113

Energy Crisis, 6, 34,41,47,58,80 Expectation, 63, 68, 69, 96, 107, 116,

118,123

Federal Energy Administration, 2, 4, 7, 58,81

Federal Trade Commission, 3, 22, 58 Firm Size, 16, 17, 18, 30, 35,46,50,56,

87,98,100,101,102,103,105,108, 109,110,117

Firm (Theory), 9, 10, 11, 12, 21,23,35, 39,41,44,46,59,60,61,62,69,92, 93,102,105,108,109,110,111,114, 116,130,131

F.O.B. Pricing, 9,11,45

Government, 23, 25, 36, 49, 53, 59,72, 73,115,117,125

Growth,19,29,49,66,71,86

Herfindal Index, 87 Homogeneity (product), 7, 8, 22, 45, 60,

69,82,107, 110

Inflation, 6, 25, 47,49,63,66,69,71,83, 106, 107, 109, 114, 118, 123, 128, 129,130

Information, 46,102 Industry Structure, 30,49,66,71,76,85,

88,102,106,107,115 International Trade, 12, 13, 34,35,47,

71,73,98 Investments, 3,4,6, 19,21, 24, 25,34,

40,41,42,62,71,78,82,83,96,99, 100,108,112, 113

Kinked demand curve, 106

Lags (in investment decision), 31,43,96

Market share, 17,31,35,36,50,53,54, 64,66,79,90,99,100,102,108

Market size, 15,17,29,32,44,45,46,69, 74,82

138

Market organization, 47,73,75,80,82, 84,85,87,88

Merger, 35,44,52,53,54,77,78,126 Monopolistic Competition, 73, 92, 111 Monopoly, 35,44, 47,90,92,93, 109,

125,130 Multiplant Operation, 9, 32,50,53, 75,

90,100,101,108

Objectives, 69, 83, 101, 102, 103, 107, 116,131

Oligopoly, 23, 74, 77, 81, 92,94, 105, 109,113,114,125,130

Ownership and Control, 30, 31, 32, 36, 50,53,54,63,65,76,77,82,86,88, 89,101

Patents, 1, 34 Performance, 64, 97,105,131 Plant Location, 33,52,53,56,60,69,75,

76,86,91,100,106 Plant Size, 17,22,42,50,53,54,56,60,

63,66,71,81,83,96,97,99,101 Price Commission, 4, 6, 7,24, 31,39,42,

47,117,120,125 Price Control, 21, 22, 23, 24, 25, 29, 36,

39,42,47,49,50,58,59,60,62,66, 68,69,71,72,73,78,82,83,84,106, 107, 109, 112, 113, 114, 115, 116, 117,124,125,126,130,131

Price Discrimination, 22, 23,35, 39, 45, 66, 69, 81, 87, 100, 102,106, 108, 113

Price Fixing Agreements, 22, 23, 24,25, 29,34,36,37,38,39,44,45,47,62, 86,105,109,129

Price Leadership, 92 Price Movements 25, 26, 27,35,39,59,

67,86,93

Pricing System, 9,11,12,21,35,36,38, 39,45,46,50,58,59,60,61,62,69, 71,74,86,92,94,123

Process Diversification, 2,5, 7, 10,42,43, 50,53,57,58,78,80,82,85,95,113

Production Index, 18, 19,29,30,51,72, 85

Production Techniques, 1, 6, 7, 34, 42, 57,78,80,95

Profit, 38,39,44,64,65, 102,106, 128 Public Firms, 50, 53, 56,64

Rationalization, 6,7,42,58,78,95 Restrictive Practices Court (The), 23, 24,

29,32,37,38,39,46,47,97,105 Risk, 24, 25, 38, 39,44,45,46,62,81,

100,107,113

Sales, 9, 29, 35,46,58,64,75,86,105, 106,109

Spatial Distribution (Production), 9, 10, 11,12,22,24,32,33,35,38,45,52, 56,59,60,66,74,75,76,85,90,106

Sherman Antitrust Act, 22 Supply, 20, 29, 35, 37, 53, 96,118 Symmetry, 101, 103, 108, 109,110,111,

112

Technological Progress, 4, 34, 40, 42, 43, 45,56,58,60,66,78,80,81,83,94, 95,100,105,·107,108,113,130

Transport Costs, 8, 9,10,11,17,21,35, 36,37,38,40,45,56,59,60,68,69, 74,92,105

Uncertainty, 69,102,110,112,123 Uniform delivery price, 11,22,45

Vertical Integration, 40, 53