Page 11 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 2, 2014, pp. 5-20

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 2, 2014, pp. 5-20

These specifications of free competition arebased on relatively low level monopoly of

production on leading sectors of industry. For example, the average number of employees was 19

in manufacturing industry enterprises in England in the middle of XIX century [Nikitin S.M.

1993.p.51].The low level of monopoly in industry is expressing the impossibility of formation

of monopolies which is dominating in the most part of any sector.

At the same time free competition system gradually created material conditions for

ignoring itself historically and for transition to another development stage which is characterized

already by the ratio of monopoly and competition. Competition created conditions for gradually

monopolisation in production and capital sector. In certain level of development this process lead

to creation of monopoly coalitions.

The transformation of big coalitions to dynamics of economic life took off in the result of

horizontal coalitions and strong wave of absorption in the end of XIX century. That’s why, for

example the first such wave took place in USA in 1898-1903 resulted with high level of

monopoly intra-sphere production.

For example, oil production and oil-refining industries were accumulated in 400 company

which had no relationship with each other. Oil trust connected all these companies into one

single company which captured 95 % of oil production in USA in 1903. This trust owned 12000

railway cistern, 60 ocean tanker, 8000 oil tank for transporting the produced oil in 1909.

American trusts controlled 81 % of chemical, 77% of metal, 61% of steel, 60% of sheet & print,

85 % of lead production and etc. in the beginning of the XX century.

During the I World War there were more than 400 unions in Germany. For example, Rein-

Best fall coal syndicate produced 93% of all Rur coal and 54 % of German coal in 1913. Essen cast

iron syndicate which owned 43-44 % of all cast-iron production played an important role too. Also,

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