As long as the right cartels are able to skim value, I could see this being successful regardless. Cartels are businesses at the end of the day- and they won't totally destroy an industry as long as it's making them money long term. The problems occur when smaller groups start fighting over access to the resources.
I think you've got this wrong. Any firm that defects from the cartel will tend to gain market share at the expense of all the firms that remain in the cartel. Thus, its really the firms in that remain in the cartel that die. So the whole thing looks a lot like a Prisoner's Dilemma game played between the firms looking to cartelize.
Now, they might do things like sign contracts between each other to prevent defection, or buy each other's stock to make defection less profitable than profitable than playing along, but then you have to worry about disruption from outside the cartel. Or you could forcibly cartelize industries like FDR tried to do with the National Recovery Administration if the government really wants an industry to be profitable when it wouldn't otherwise be.
And when I think of successful cartels in history I think of DeBeers and OPEC and... well, those are the only two I could name that lasted longer than a few years.
To be a cartel, you simply need to agree to limit supply to keep prices higher. So it sounds more like a cartel of survival rather than to make obscene profits.
reply