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The Princeton Economic History of the Western World #119
The Corporation and the Twentieth Century: The History of American Business Enterprise
A definitive reframing of the economic, institutional, and intellectual history of the managerial era
The twentieth century was the managerial century in the United States. An organizational transformation, from entrepreneurial to managerial capitalism, brought forth what became a dominant that administrative coordination by trained professional managers is essential to the efficient running of organizations both public and private. And yet if managerialism was the apotheosis of administrative efficiency, why did both its practice and the accompanying narrative lie in ruins by the end of the century? In The Corporation and the Twentieth Century , Richard Langlois offers an alternative a comprehensive and nuanced reframing and reassessment of the economic, institutional, and intellectual history of the managerial era.
Langlois argues that managerialism rose to prominence not because of its inherent superiority but because of its contingent value in a young and rapidly developing American economy. The structures of managerialism solidified their dominance only because the century’s great catastrophes of war, depression, and war again superseded markets, scrambled relative prices, and weakened market-supporting institutions. By the end of the twentieth century, Langlois writes, these market-supporting institutions had reemerged to shift advantage toward entrepreneurial and market-driven modes of organization.
This magisterial new account of the rise and fall of managerialism holds significant implications for contemporary debates about industrial and antitrust policies and the role of the corporation in the twenty-first century.
The twentieth century was the managerial century in the United States. An organizational transformation, from entrepreneurial to managerial capitalism, brought forth what became a dominant that administrative coordination by trained professional managers is essential to the efficient running of organizations both public and private. And yet if managerialism was the apotheosis of administrative efficiency, why did both its practice and the accompanying narrative lie in ruins by the end of the century? In The Corporation and the Twentieth Century , Richard Langlois offers an alternative a comprehensive and nuanced reframing and reassessment of the economic, institutional, and intellectual history of the managerial era.
Langlois argues that managerialism rose to prominence not because of its inherent superiority but because of its contingent value in a young and rapidly developing American economy. The structures of managerialism solidified their dominance only because the century’s great catastrophes of war, depression, and war again superseded markets, scrambled relative prices, and weakened market-supporting institutions. By the end of the twentieth century, Langlois writes, these market-supporting institutions had reemerged to shift advantage toward entrepreneurial and market-driven modes of organization.
This magisterial new account of the rise and fall of managerialism holds significant implications for contemporary debates about industrial and antitrust policies and the role of the corporation in the twenty-first century.
816 pages, Hardcover
Published June 27, 2023
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Displaying 1 - 2 of 2 reviews
April 28, 2024
This is a wonderful book, if a bit long.The story is the history of the American Business Enterprise - the large corporation - in the 20th century. The story starts back in the 19th century and continues into the present.
Readers of business history will quickly realize that Langlois’s book is following the path of Alfred D. Chandler’s massive and hugely influential 1977 volume “The Visible Hand”. In that book, Chandler establishes the multidivisional corporate form as a key contribution to the world and a standard of business organization for large firms capitalizing on scale and scope economies and selling / distributing their good to mass markets. These are the firms like General Motors that Chandler chronicled in “Strategy and Structure” and “The Visible Hand”, along with his later works. The key to this broad story is how the “visible hand” of professional management, aided by well developed management structures and technologies, supplanted the indivisible hand of the market and were fundamental to the growth to dominance of the US in the 20th century.
This is only the roughest of summaries, of course. If you want to learn about US history there are few better books to read that those of Chandler — or Langlois.
Professor Langlois presents an argument that directly takes aim at Chandler - not to refute him but to present a more nuanced view of the history that suggests that the visible hand-invisible hand was not as sharply drawn as one might think. Politics, regulation, collusion, and technology/innovation affect firms outside of firm boundaries and seem removed from simplistic notions of the market and of competition more generally. The pressures of war and depression prove highly influential for how firms grow and compete and prosper. Government policies established in preparation for war or for depression can end up influencing industries long after their initial period of initiation has passed. Government regulation of competition, collusion, antitrust, and related activities lead to whole patterns of firm and industry development that remain influential even though the initial economic and legal rationales are no longer relevant.
So Chandler’s arguments are still relevant but they need to be supplemented by the recognition that the internal dimensions of large firms are sometimes not as stable and predictable as one might think initially think. At the same time, the external dimensions of how firms develop, compete, and innovate have complex historical roots that are not always clear to even informed observers.
Chandler’s firms continued their dominance after the two world wars of the 20th century and into the Cold War. Once the wars concluded and the USSR fell apart, the lynchpin of external support in the world changed. Then consider innovation that moved from tangible scale intensive manufacturing to digital products and services and much more intangible products. With the internet developing, the traditional bases of superiority for traditional M-form firms changed sharply and newer digital platform firms became the new industrial titans. All of the sudden, the traditional explanations for the dominance of the M-form seemed less persuasive. The details behind the current global competitive world need much more elaboration.
Both of these works are major projects and require much time to digest and comprehend. It is well worth the effort to do so.
Readers of business history will quickly realize that Langlois’s book is following the path of Alfred D. Chandler’s massive and hugely influential 1977 volume “The Visible Hand”. In that book, Chandler establishes the multidivisional corporate form as a key contribution to the world and a standard of business organization for large firms capitalizing on scale and scope economies and selling / distributing their good to mass markets. These are the firms like General Motors that Chandler chronicled in “Strategy and Structure” and “The Visible Hand”, along with his later works. The key to this broad story is how the “visible hand” of professional management, aided by well developed management structures and technologies, supplanted the indivisible hand of the market and were fundamental to the growth to dominance of the US in the 20th century.
This is only the roughest of summaries, of course. If you want to learn about US history there are few better books to read that those of Chandler — or Langlois.
Professor Langlois presents an argument that directly takes aim at Chandler - not to refute him but to present a more nuanced view of the history that suggests that the visible hand-invisible hand was not as sharply drawn as one might think. Politics, regulation, collusion, and technology/innovation affect firms outside of firm boundaries and seem removed from simplistic notions of the market and of competition more generally. The pressures of war and depression prove highly influential for how firms grow and compete and prosper. Government policies established in preparation for war or for depression can end up influencing industries long after their initial period of initiation has passed. Government regulation of competition, collusion, antitrust, and related activities lead to whole patterns of firm and industry development that remain influential even though the initial economic and legal rationales are no longer relevant.
So Chandler’s arguments are still relevant but they need to be supplemented by the recognition that the internal dimensions of large firms are sometimes not as stable and predictable as one might think initially think. At the same time, the external dimensions of how firms develop, compete, and innovate have complex historical roots that are not always clear to even informed observers.
Chandler’s firms continued their dominance after the two world wars of the 20th century and into the Cold War. Once the wars concluded and the USSR fell apart, the lynchpin of external support in the world changed. Then consider innovation that moved from tangible scale intensive manufacturing to digital products and services and much more intangible products. With the internet developing, the traditional bases of superiority for traditional M-form firms changed sharply and newer digital platform firms became the new industrial titans. All of the sudden, the traditional explanations for the dominance of the M-form seemed less persuasive. The details behind the current global competitive world need much more elaboration.
Both of these works are major projects and require much time to digest and comprehend. It is well worth the effort to do so.
September 2, 2023
This book was interesting, albeit long. It basically provides a mostly chronological telling of the 20th history of American enterprise. It seems no industry is forgotten, from media to automobiles to groceries to airplanes to shipping (do you know the story of McLean hitting on the idea of container shipping?).
And of course oil. Steel. Aluminum. Navy ships. Military aircraft. Then tech: IBM, Microsoft, Apple, etc.
The stories of the automobile industry and the deregulation of the airlines was interesting too.
Not one mention of Elon Musk, but of course he co-founded PayPal around the end of the 20th century, so it makes sense that he wouldn’t appear here. It’s a striking reminder how dramatically the world has changed just since 2000.
End notes are extensive! One wonders how many grad students helped with citations and research. Glad I didn’t have to do that bibliography!
And of course oil. Steel. Aluminum. Navy ships. Military aircraft. Then tech: IBM, Microsoft, Apple, etc.
The stories of the automobile industry and the deregulation of the airlines was interesting too.
Not one mention of Elon Musk, but of course he co-founded PayPal around the end of the 20th century, so it makes sense that he wouldn’t appear here. It’s a striking reminder how dramatically the world has changed just since 2000.
End notes are extensive! One wonders how many grad students helped with citations and research. Glad I didn’t have to do that bibliography!
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