MARKTSPALTUNGEN a

SUMMARY The term “division of the market”, which frequently recurs in specialist literature, has as yet acquired no clear definition. It is suggested that it be used to cover those processes and situations which result in a diminution of the mutual substitution potential of goods in trade. This definition avoids the difficulties arising from the fact that the markets themselves, on account of the innumerable existing potentialities for substitution, exhibit no clearly marked boundaries. Divisions of the market can bring about the diversion of a demand from a quarter with high purchasing power into split‐off part‐markets (example: monopolistic price discrimination) or the withholding of such a demand from these split‐off part‐markets (example: rationing). Private enterprise and national‐political divisions of the market are distinguished and divided into numerous sub‐groups. A significant proportion of the division of markets in private enterprise is the expression of a legitimate competitive situation (considerable proportions of quality competition, numerous periodic divisions of the market such as long‐term supply contracts and trading in futures). It is nevertheless apparent that, contrary to a widespread assumption, trading in futures has a purely economic stabilising function, unless it is accompanied by speculation based on correct forecasts. Doubt is cast on the feasibility of damping the oscillations of a freely moving exchange rate by means of future exchange deals. Monopolistic divisions of the market are considered in most cases to involve hazard. National‐political divisions of the market (protection of demand by price ceilings and rationing; protection of supply by trade restrictions, restrictions of incoming stocks, minimum prices and minimum wages, prescription of admixture in certain products, state raw materials agreements) are adjudged critically. Attention is drawn above all to the increased crisis susceptibility of regionally isolated part‐markets.