chapter  8
26 Pages

Further Dynamic Factors

Kurt Rothschild first presented the view that powerful monopolies would arise in an integrated area and that the increased degree of monopoly would create inefficiencies in resource allocation.2 Kindleberger also declares that cartel agreements are likely to be reached in a customs union and adds that, if competition actually did increase, potential large-scale economies would be forgone.3 Finally, Perroux maintains that the common market is "the fruit of the capitalism of monopolies," and that the abolition of customs barriers will inevitably

result in a strengthening of monopoly positions, accompanied by the formation of international cartels.4