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Comment by renewiltord | Hacker News Reader

Certainly not.

But consider an actual hypothetical cartel that is explicitly defacto and dejure price fixing. Suppose the members of this cartel instead create a new LLC. Suppose that new LLC now performs the role of price-fixing with the condition that not conforming will lead to expulsion from the price feed system. Has this transformation taken a cartel that is explicitly colluding and made it into one that is not colluding?

If so, we now have a mechanism to turn every cartel into a non-cartel via the umbrella LLC. And the latter costs $300 to set up in Delaware. So the anti-cartel law has a $300 bypass. Reasonable, I suppose if you believe that that law has reached the end of its utility.

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The trouble with colluding is that if everyone agrees to set the price at $300, another seller can undercut them with a price of $290 and take their business away.

Or one of the members of the cartel can agree to sell at $300, and then offer a kickback under the table to get the business, or offer some other cash equivalent incentive.

Cartels only work if the government is used to make it illegal to cheat on the cartel.

except this isn't the case. there have been many examples of cartels and collusion in the past.

As many examples of failed cartels and collusion, too. That's why they always seek the government to force cooperation. This is how unions operate, for example. Taxis and the AMA are other examples.

> That's why they always seek the government to force cooperation.

you're talking about labor cartels, but the article (and op) are talking about real estate cartels. one operates with government involvement, the other does not.

edit: my original point was that simply the threat of someone undercutting a cartel is not enough to be able to state that cartels cannot exist without government involvement/coercion.

The real estate cartel has no means of enforcement, so its ability to hold the line on prices fails the moment one of its members decides it is in their personal best interest to lower the price to undercut the competition.

I see. Your position is that cartels only exist because governments ensure they exist. I think that is a tautology (in that everything exists because governments ensure they exist since governments enforce law so things exist in society depending on whether they enforce or don't) or wrong, so we have a fundamental disagreement here and unifying will take so long that there's probably no point discussing further.

> Your position is that cartels only exist because governments ensure they exist

Not exactly. Cartels based on voluntary cooperation are unstable and tend to not last very long. Stable cartels are based on coercion of some sort - some mechanism to keep the members in line. The law is the usual means to achieve that.

Thats called a monopoly, and monopolizing intentionally is illegal for the same reasons.

The LLC owns no product to sell. It's merely a price feed service. You are welcome to use other price feed services. In fact, for the fee of a few hundred dollars, unaffiliated people will happily set up other price feed services.

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