Limitation of the Vend

The Limitation of the Vend was a historic price fixing cartel of coal mine owners of north east England. The immediate buyers in this market were ships' captains who aimed to resell their cargoes in other parts of England; but chiefly in London which, by becoming the planet's first large mineral-fuelled city, had escaped a natural constraint on the growth of urban areas and was a voracious consumer of coal. Often dated 1771-1845, the Limitation of the Vend can be traced back much earlier.

The cartel appears to have operated openly and without concealment, being administered by a well-organised secretariat which could usually detect any significant cheating. It seems participants thought their cartel was not strictly legal, but were convinced it was morally justified all the same. Never successfully prosecuted by the law, they were investigated at least five times by Parliament, twice at their own instigation. Some of its most powerful members were women.

Despite their relatively high prices, the cartel's coals captured nearly the whole of the lucrative London market. Other prolific coalfields, some much closer to the capital, could rarely undercut. This was because the north east mines were near tidal rivers with excellent sea-transport links. Their conveniently-located coal deposits were soon exhausted; even so, they kept up their competitive advantage by investing heavily in innovative deep mining, rail transportation and bulk material handling technologies. The region has been called the Florence of the Industrial Revolution, the Silicon Valley of its day, and the native land of railways.

The Limitation of the Vend has left meticulous records; hence scholars can study the behaviour of a real cartel in cliometric detail. To what extent it really enjoyed monopoly profits is still debated, however. Unlike most price-fixing business combinations, which soon collapse e.g. because members start cheating, the Limitation maintained itself for an exceptionally long time, albeit with occasional outbreaks of cut throat competition, being perhaps the most durable cartel that has ever existed. It has been described as one of the most fascinating problems in economic history.