The title of this chapter seems to contain a contradiction in terms: one of them is associated with strength (cartel), the other with weakness (periphery); nonetheless, they are used in conjunction. The aim of this chapter is to resolve this contradiction, to explain its particularities, and by so doing to highlight certain structural features of the early modern Atlantic economy. To do so, I will first discuss the two terms – cartel and periphery – and then secondly present findings from a case study of the seemingly peripheral Atlantic World, before thirdly drawing some conclusions about the incorporation of ostensibly peripheral regions into Atlantic trade and into the Atlantic World in general.

The terms: (1) cartel

A cartel is commonly defined as a group of independent producers who strike an agreement, either in writing (a contractual cartel) or orally (a ‘gentleman’s agreement’), to increase their collective profits by means of price-fixing, limiting supply, or other restrictive measures. Cartels usually occur in oligopolies, where there is a small number of suppliers offering a homogenous product. The effects of cartels are commonly described as the following: cartels change the relations between supply and demand in the economy by providing the supply side with greater market power. Competition is curtailed as suppliers harmonize their production and investment policies, as well as their course of action against intruders or newcomers; prices are determined by the supply side, which means they are flexible upwards but are seldom or never cut; consumer choice is limited and the guiding principle of prices is suspended.

In the early modern economy, price-fixing was a well established practice, most famously (or infamously) used by privileged trading companies such as the Dutch and English East India companies. Adam Smith, the father of modern economics, was one of the first to deliver a fundamental critique of such merchants’ conspiracies against the public, in his major work The Wealth of Nations. Systematic theorizing about cartels and their economic effects emerged only towards the end of the nineteenth century. Contrary to Smith’s critique and to current notions, at that point in time members of the legal and economic professions rather advocated the regulating and rationalizing possibilities of cartels, highlighting their stabilizing effects.