Codes of Fair Competition: Industrial Planning and Collusion under the NIRA
Codes of Fair Competition: Industrial Planning and Collusion under the NIRA
This chapters highlights the vast heterogeneity found within the NIRA’s industry-specific codes of fair competition. Some codes, such as those of rayon yarn and photographic manufacturing, were just a couple of pages long and contained nothing more than the required maximum hour and minimum wage provisions—there is no reason to think that such codes would have effectively fostered collusion. On the other hand, codes for industries such as lumber and steel were dozens of pages long and contained scores of detailed provisions restricting prices, output, and productive capacity. This chapter presents empirical evidence suggesting that the simple presence of an NIRA code did not lead to collusive outcomes in an industry. However, those industries with long and complex codes experienced declines in output and rising prices under the NIRA—a finding consistent with the achievement of cartel outcomes. The presence of a trade association appears to have helped industries build and pass codes that were more likely to lead to collusive outcomes.
Keywords: Codes of Fair Competition, collusion, trade association, cartel
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