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Abstract
But for the reciprocity garnered early by the New Zealand Shipowners’ Federation, its organisational life-chances would have been curtailed. Reciprocity-based cooperation sustained the Federation until member bonds gelled and strong membership incentives could be offered. Although the Federation subsequently fixed prices and spawned a shipping cartel, forceful external constraints limited its ability to extract economic rents from shippers and prompted it to enhance member efficiency. While this end state is not uncommon, the Federation's atypical developmental pathway affords two insights. Firstly, reciprocity can function as a ‘starting mechanism’ for industry associations with few selective incentives. Secondly, government regulations can evoke cartel-like behaviour by an association at the same time as they limit its ability to raise prices.
Notes
1. Schneiberg, ‘Political and Institutional Conditions’; Berk and Schneiberg, ‘Varieties in Capitalism’; Doner and Schneider, ‘Business Associations’; Ville, ‘Rent Seeking’; Merrett et al., ‘Industry Associations’; Reveley and Ville, ‘Enhancing Industry Association Theory’.
2. On these two factors specifically, see Merrett et al., ‘Industry Associations’; Reveley and Ville, ‘Enhancing Industry Association Theory’.
3. Gintis et al., ‘Moral Sentiments’, 8 (emphasis omitted).
4. On direct (‘strong’) versus ‘indirect’ reciprocity, see Smith and Bird, ‘Costly Signaling’.
5. Reciprocity in this sense is qualitatively different from Oliver Williamson’s use of the term to denote explicitly negotiated agreements, consciously created to increase the commitment level between buyers and suppliers. Williamson cites George Stigler’s point that these ex ante bargained-over bilateral deals can reduce market imperfection, for instance, by mitigating the power of cartels. In contrast I argue that norm-based reciprocity increased NZSF’s internal strength, empowering it subsequently to act in a cartel-like manner. For the point of difference between normative reciprocity and Williamsonian ‘reciprocal trading’, see Williamson, ‘Credible Commitments’, 531.
6. Olson, The Logic, 51.
7. On cartel and shipping conference formation, respectively, see Levenstein and Suslow, ‘What Determines Cartel Success?’; Deltas et al., ‘American Shipping Cartels’.
8. On associations in these different markets, see Traxler, ‘Theoretical and Methodological Framework’, 24–5.
9. Fowler and Christakis, ‘Cooperative Behavior’, 5337.
10. For a summary of institutional work on associations, see Reveley and Ville, ‘Enhancing Industry Association Theory’, 839–42.
11. Ville, ‘Rent Seeking’.
12. Berk and Schneiberg, ‘Varieties in Capitalism’.
13. For a comprehensive review of the collective action field, see Poteete et al., Working Together.
14. Traxler, ‘Theoretical and Methodological Framework’, 15.
15. North, Institutions, chapter 2.
16. Ville, ‘Rent Seeking’, 299 (emphasis omitted); Doner and Schneider, ‘New Institutional Economics’.
17. Traxler, ‘Introduction’, 5.
18. Kahan, ‘Logic of Reciprocity’, 339.
19. Ostrom, ‘Policies’.
20. Merrett et al., ‘Industry Associations’.
21. On the relative importance of social capital versus incentives, see Reveley and Ville, ‘Enhancing Industry Association Theory’.
22. Benkler, ‘Law, Policy, and Cooperation’.
23. Camerer and Fehr, ‘Measuring Social Norms’, 56.
24. Fehr and Fischbacher, ‘Economics of Strong Reciprocity’, 153.
25. For an overview, see Gintis et al., ‘Moral Sentiments’, 22–6.
26. Gouldner, ‘Norm of Reciprocity’, 171.
27. Kahan, ‘Logic of Reciprocity’.
28. For a discussion of indirect reciprocity, see Poteete et al., Working Together, 182–3.
29. Smith and Bird, ‘Costly Signaling’, 117.
30. Benkler, ‘Law, Policy, and Cooperation’, 316.
31. Fehr and Fischbacher, ‘Economics of Strong Reciprocity’.
32. Gouldner, ‘Norm of Reciprocity’, 177.
33. Ibid., 176.
34. Bowles and Gintis, ‘Social Capital’, 382.
35. On the strength of normative behavioural controls, see Etzioni, A Comparative Analysis.
36. For a discussion of what promotes employer cooperation within associations, see Gospel, Markets.
37. For a comprehensive review, see Levenstein and Suslow, ‘What Determines Cartel Success?’.
38. Levenstein and Suslow’s strongest example of a cartel emerging from an association is Lundqvist’s study of Swedish breweries, which also makes the point about transaction costs (Levenstein and Suslow, ‘What Determines Cartel Success?’, 74). Notably the Swedish Brewers’ Association emerged to combat not trade unions but rather the local temperance movement and political moves to tax beer (Lundqvist, ‘Making of a National Cartel’, 46).
39. Deltas et al., ‘American Shipping Cartels’.
40. Gao, ‘State and the Associational Order’.
41. On NZSF’s origins as an actor within New Zealand’s maritime labour market, see McLean, Voice for Shipping. The four main unions were the Federated Seamen’s Union (FSU), the Cooks’ and Stewards’ Union, the Marine Engineers’ Union, the Merchant Service Guild, and the Waterside Workers’ Union (WWU). The FSU and WWU were the largest and most militant.
42. Museum of Wellington (hereafter MOW), NZSF Domestic, Box 5. This information is from subscription fees paid by each member.
43. McLean, Voice for Shipping, 26.
44. Ibid., 7. The four Conference Lines were the Commonwealth and Dominion Line, Shaw Savill and Albion, the New Zealand Shipping Company, and the Blue Star Line.
45. The classic example is the Vestey family’s Blue Star Line. On the Vesteys’ connections, see Knightly, Vestey Affair.
46. For an example, see Reveley and Ville, ‘Enhancing Industry Association Theory’, 848–9.
47. MOW, NZSF Minutes 1911–1931, Box 1, NZSF Executive Committee Meeting Minutes, 9 May 1912.
48. On how these differ from ‘personal social capital’, see Merrett et al., ‘Industry Associations’, 785.
49. On meetings and media richness, see Burton and Obel, ‘Technology as Contingency Factor’, 241.
50. See MOW, NZSF Minutes 1911–1931, Box 1, NZSF Executive Committee Meeting Minutes, 9 May 1912.
51. McLean, Voice for Shipping, 31.
52. MOW, NZSF Minutes 1911–1931, Box 1, NZSF Annual Report and Balance Sheet, 25 October 1912.
53. For details of this dispute, see Grant, ‘Missing in Action’.
54. The Federated Seamen’s Union refused to affiliate with the United Federation of Labour (UFL). Union Co.’s founder Sir James Mills and his Conference Line counterparts were more willing to consult with UFL to end the dispute (given it drew in UFL-affiliated waterside workers of which Union Co. was the main employer) than were NZSF officials representing the interests of the coasters who vehemently opposed UFL (see Grant, ‘Missing in Action’, 197).
55. MOW, NZSF Minutes 1911–1931, Box 1, NZSF Annual Report and Balance Sheet, 15 October 1913.
56. McLean, Voice for Shipping, 36.
57. These details are from Walsh, ‘Seamen on Strike’, 94–5.
58. Walsh, ‘Seamen on Strike’, 98–9.
59. McLean, Voice for Shipping, 39.
60. MOW, NZSF Domestic, Box 5, Membership Dues.
61. Smith and Bird, ‘Costly Signaling’, 117.
62. Kahan, ‘Logic of Reciprocity’, 340.
63. See Ostrom, ‘Collective Action’.
64. Kahan, ‘Logic of Reciprocity’, 343.
65. The earliest, most complete set of rules is from 1924. They only specify procedures for cancellation of membership due to non-payment of fees (NZSF, Rules, 1924, clause 5e). The 1956 rules also have just that provision.
66. Ville, ‘Rent Seeking’, 311–12.
67. MOW, NZSF Domestic, Box 5, Memorandum, NZSF Secretary to F.K. Macfarlane, 8 March 1956.
68. On this organisational structure’s general contours, see Benkler, ‘Law, Policy, and Cooperation’, 331.
69. MOW, NZSF Minutes 1911–1931, Box 1, NZSF Wellington Branch, Minute Book 1911–1914.
70. MOW, NZSF Minutes 1911–1931, Box 1, NZSF Annual Meeting, 29 November 1917, Minutes.
71. NZSF, Rules, 1924, clause 5c.
72. MOW, NZSF Minutes 1911–1931, Box 1, NZSF Annual Report 1923; Minutes 1960–1981, Box 4, Annual Report, 27 May 1965.
73. MOW, NZSF Domestic, Box 5, Financial Matters Generally. Dues information is from assorted NZSF correspondence and documents.
74. MOW, NZSF Domestic, Box 5, Rules of Federation.
75. MOW, NZSF Domestic, Box 5, Rules of Federation. This vote allocation is from a list based on 1955 payments.
76. NZSF, Rules, 1924, clause 3i.
77. For example, see MOW, NZSF Minutes 1931–1948, Box 2, Executive Meeting, 15 September 1942.
78. MOW, NZSF Minutes 1911–1931, Box 2, NZSF Executive Committee Report, 30 September 1919.
79. North and Thomas, Rise of the Western World, 93.
80. For instance, in 1919, NZSF sent out a detailed memo to members about amended regulations for shipping petroleum. MOW, NZSF Minutes 1911–1931, Box 2, Memo.
81. Arrow, Essays, 152.
82. McLean, Voice for Shipping, 61.
83. For an account of this period, see Reveley, Registering Interest, chapter 3.
84. MOW, NZSF Minutes 1960–1981, Box 4, NZSF Annual Report, 31 March 1961.
85. MOW, NZSF Minutes 1931–1948, Box 2, NZSF Annual Report, 7 June 1932.
86. MOW, NZSF Unlabelled Box, Railway Competition and Freight Rates, 1934. The commodities are as follows: general cargo, sugar, produce, manure, benzine, wool, butter, cheese and timber. No less than five were shipped at each port.
87. Furniss, Servants of the North, 149.
88. MOW, NZSF Unlabelled Box, Railway Competition and Freight Rates, 1934.
89. MOW, NZSF Various, Box 15, Report of Rail and Coastal Shipping Committee, 1945.
90. Rimmer, ‘Changing Status’, 50.
91. Hawke, Making of New Zealand, 264.
92. MOW, NZSF Various, Box 15, Report of Rail and Coastal Shipping Committee, 1945.
93. MOW, NZSF Minutes 1911–1931, Box 1, NZSF Meeting, 14 August 1933.
94. Commission of Inquiry, New Zealand Shipping, 9–10.
95. Baker, New Zealand People at War, 400.
96. Archives New Zealand (hereafter ANZ), IC4, 244, 48/2/3. S. Greenberg and L.G. Durbin, Memorandum for the Economic Stabilisation Commission, 10 September 1947. As disclosed in this document, Union Co. discussed its proposed ‘rebuilding programme’ directly with the prime minister in 1946.
97. ANZ, T72, 133, Economic Stabilisation Commission, Minute Book, Minutes of Meeting, Decision 3738, 22 October 1947. In existence from 1942 until 1950, the Commission regulated prices in conjunction with the Price Tribunal.
98. ANZ, IC4, 244, 48/2/5, New Zealand Shipowners’ Federation Acting Secretary to Director of Price Control, 29 May 1953.
99. For an example, see MOW, Minutes 1948–1960, Box 3, NZSF Freight Subcommittee, Meeting 36, 17 September 1958.
100. NZSF still had 20 members in 1957, including the largest coasters. Aside from the international lines, its non-members comprised ferry and barge owners (such as Devonport Steam Ferry Co.), companies that dabbled in shipping (such as Gisborne Lightering and Stevedoring) and tiny single-port operators. For a full membership list, see ANZ, IC1, 1007, 22/5/2.
101. By 1962, 91.2% of cargo carried by the Conference Lines was discharged, and 56.8% was loaded at these ports. Reveley, Registering Interest, 46.
102. Doner and Schneider, ‘Business Associations’, 277.
103. MOW, Minutes 1960–1981, Box 4, NZSF Annual Report, 31 March 1971.
104. MOW, NZSF Box 19, Trans-Tasman Conference Meeting, 3 December 1948.
105. MOW, NZSF Box 19, Trans-Tasman Conference Draft Constitution.
106. Laxon, Huddart Parker, 96.
107. Ibid.
108. MOW, NZSF Box 19, Trans-Tasman Conference Draft Constitution.
109. The Conference continued to pay NZSF an administrative fee for ‘secretarial duties’. MOW, NZSF Box 19, Trans-Tasman Conference, Financial Statement, 31 March 1960.
110. MOW, NZSF Minutes 1948–1960, Box 3, Executive Meetings, 20 June and 19 September 1957.
111. Doner and Schneider, ‘Business Associations’, 275.
112. MOW, NZSF Minutes 1948–1960, Box 3, NZSF Executive Meeting, 23 March 1959.
113. MOW, NZSF Minutes 1948–1960, Box 3, NZSF Annual Report, 21 May 1959.
114. Rimmer, ‘Changing Status’, 82.
115. See Royal Commission, Containers, 8; Reveley, Registering Interest, 94.
116. Reveley, Registering Interest, 93.
117. Producer Boards’ Shipping Utilisation Committee, New Zealand Overseas Trade, 135.
118. MOW, NZSF Minutes 1960–1981, Box 4, NZSF Annual Report, 31 March 1964.
119. Runciman, Theory of Cultural and Social Selection, 4.
120. See Berk and Schneiberg, ‘Varieties in Capitalism’.