ABSTRACT
This chapter discusses how the leadership of Swedish timber association in collaboration with the continental timber export interests ousted the League of Nations of the European timber cartel negotiations and led the European timber exporting countries in a loose gentlemen’s agreements concerning regulation of output in 1934 and 1935. The tacit cartel agreements were ineffective, however, because of lack of implementation and clear rules and organisation. Empirical material from the Nordic countries, discussed in this chapter, shows that the motivation of firms to set up international cartels in the 1930s did not always come down to stability, private profit, and predictability, as the mainstream cartel theories in economics teach. Sometimes cartels were built from an understanding that if the firms do not form some sort of a regulation scheme, the government or intergovernmental actors might deliver it for them. In timber industry, a regulation scheme brought about by the League of Nations was an inferior option for the firms and it was because of diplomatic and trade political interests were involved in it.
