For an understanding of multinational enterprise it is necessary to include an analysis of international cartels. Between the wars they formed an important structural characteristic of the world economy. According to contemporary reckoning in the 1930s between 30% and 50% of world trade was controlled or influenced by international agreements or ‘loose associations’. Up until the early years after the Second World War they held the attention of scholars, journalists and politicians in the same manner as the multinational concerns have since the 1960s. And like the latter they have been judged in highly differing, or contradictory manners.

International cartels performed a number of functions, which are fulfilled today by multinational enterprises. In individual cases an international cartel could even become a multinational concern; occasionally it is described as a ‘forerunner’ of multinational enterprise. International cartels are generally less stable and their resources more limited than those of multinational concerns or national cartels, although they can, as Alice Teichova has pointed out, react to changes swiftly and with flexibility, and represent a more effective instrument of economic penetration than direct investment. Mainly – although not always – large enterprises were the driving force in the formation of international cartels. They preferred, according to region and product, to secure the market by direct investment or an agreement with competitors.