The French Nitrogen Industry during the Interwar Period: The Ambiguous Relationship between the State and Manufacturers

At the end of the First World War, the French government seized the opportunity to acquire the chemical processes of the German firm BASF, including the Haber-Bosch process. This patent made it possible to synthesize nitrogen from the air and thus produce nitrogen fertilizers in large quantities. French industrialists, however, refused to acquire these patents, and to make up for this lack of private sector involvement, the French Parliament decided in 1924 to create a national plant (ONIA), which became the first state-owned plant to be exposed to market competition. The intention was for the ONIA to supply the army with nitric acid in times of war, and, in peacetime, to sell fertilizers at the lowest possible prices in order to curb the monopoly of the private industry cartel. The purpose of this article is therefore to study the establishment and organisation of the French market for nitrogen fertilisers during the inter-war period by raising a number of questions about the ambiguous and complex relations between the state and private industry in this strategic sector. Why was the state policy initiated with the ONIA not successful at first? From 1927-1928, once the ONIA was operational, why and how did the public and private players jointly organise the marketing of fertilisers even though their interests were partially divergent? From the economic crisis of the 1930s onwards, how did the regulation of this mixed market evolve and how were public/private tensions overcome? In the French case, why did French producers leave the international cartel very early on in favour of state protectionism? And finally, to what extent can it be said that this “managed economy” framework succeeded in satisfying all the players in the French nitrogen industry?

CARTELS AND THEIR ROLE IN THE ORGANIZATION OF PRODUCTION AND INTERNATIONAL TRADE

In the modern world economy, an extremely important role is played by large international holding-type companies, often referred to as transnational corporations, financial, financial-industrial and other groups. The enterprises of such companies are located and operate in most countries of the world and have a significant impact on the main parameters of the functioning of a wide variety of markets for goods and services. With their economic potential, which often exceeds the corresponding potential of individual states, these companies are able to influence the development of market relations in both positive and negative directions. The so-called international cartel agreements, which generally mean mutual agreements between companies that often contradict the current legislation of countries, in order to establish a monopoly on certain goods (services) produced, control and capture markets, have a particularly acute negative impact on markets. In this regard, the article presents a brief history of the activities of international cartels and law enforcement practice to restrict their activities. The forms and key provisions of cartel collusion of enterprises of various industry orientations and spheres of activity are characterized. Some compensation schemes and forms of punishment for suppressing fraudulent actions of cartel participants are outlined. At the same time, there are shown situations when cartel agreements have a positive impact on the development of production, international trade and market relations. Despite strict antitrust laws, international cartels are created and operate in the markets, which should be taken into account by domestic companies when planning the results of work for them