The establishment of trust is quite difficult but for cartel it is comparatively easy.
What is the difference between trust and cartel?
Does the word "oligopoly" have a different meaning in comparison with both of the words above?
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4I think you meant to write "The establishment of a trust is quite difficult but for a cartel it is comparatively easy." Without "a", the "trust" makes sense but with a very different meaning, and the "cartel" doesn't make sense at all.– Colin FineMar 4, 2011 at 16:25
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A "trust" is what you call a "cartel" you like. (Though it used to be that folks didn't like trusts either.)– Hot LicksFeb 24, 2015 at 1:02
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3 Answers
A trust was a particular kind of oligopoly used in early 20th century America to prevent competition. Technically, it is a cartel run by a board of trustees not necessarily as a conspiracy to prevent competition. The word gained its connotations of illegality after the US anti-trust laws targeted trusts and defined them as "a conspiracy in restraint of trade."
As a completely irrelevant (and irreverent) aside, many libertarians find these laws slightly amusing since they define the federal government itself the same way. ;-)
Cartel and trust can both mean the same thing: a group of companies or organisations who (illegally) collude to fix prices/eliminate competition/etc. I hint at illegality, because in my country this behaviour would be illegal - but perhaps it isn't in other countries.
If there is a difference between the two, it might be that technically a trust would be run by a board of trustees (See 10a), whereas there is no specific organisational structure assumed with a cartel.
In my experience, cartel is most commonly used.
Oligopoly is different; it simply means that there are a small number of organisations dominating the market or industry - there is no inference that they are colluding or co-operating in any particular way.
Trust: a group of companies that illegally work together to reduce competition and control prices. As Yitchak mentions the word gained its connotations of illegality after the US anti-trust laws targeted trusts and defined them as "a conspiracy in restraint of trade."
Cartel: a group of people or companies who agree to sell something at a particular price.
Difference: The goal of a trust is to reduce competition and eliminate competitors. But in cartel the goal is to sell at a particular price and not necessarily eliminating competition. OPEC is an example of cartel.
answered Mar 13, 2011 at 23:22
