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in the social sciences and fully compatible with an evolutionary epistemology. It is ironic that Veblen chose to attack specifically the marginalist economist Carl Menger, whose theory did not actually rely on hedonism (or indeed on psychology at all) and who championed evolution- ary causal explanations in the spirit of the Scottish Enlightenment (Langlois 1989).

75. Veblen (1899).

Notes to Chapter 3 567

76. See Mills’s introduction to the 1953 Mentor edition of The Theory of the Leisure Class, p.vii.

77. Veblen (1901). Characteristically, Veblen didn’t actually turn up at the meeting to present the paper in person. The paper formed the basis of what became The Theory of the Business En- terprise (1904).

78. Veblen (1901, p. 210).

79. Veblen (1921). As Philip Mirowski (1987, p. 1022) puts it, Veblen “tended toward an in- creasingly pessimistic Manichaeism with sufficient reason as the darkness and efficient cause, now conflated with Peirce’s pragmatic maxim, as the light.” Mirowski thinks the problem is that Veblen got his Pragmatism from James and Dewey not really Peirce, but there is reason to think that Veblen was indeed channeling Peirce (Menand 2001, p. 366). For his part, John Dewey returned the favor. The economics of his Individualism Old and New, published the year after Veblen died, is unadulterated Veblen. “It is claimed, of course, that the individualism of eco- nomic self-seeking, even if it has not produced the adjustment of ability and reward and the harmony of interests earlier predicted, has given us the advantage of material prosperity. It is not needful to raise here the question of how far that material prosperity extends. For it is not true that its moving cause is pecuniary individualism. That has been the cause of some great fortunes, but not of national wealth; it counts in the process of distribution, but not in ultimate creation. Scientific insight taking effect in machine technology has been the great productive force. For the most part, economic individualism interpreted as energy and enterprise devoted to private profit, has been an adjunct, often a parasitical one, to the movement of technical and scientific forces” (Dewey 1930, pp. 86–87).

80. Here the stream of scientific management flowed back to Veblen, who became influ- enced by an uprising recently fomented within the American Society of Mechanical Engineers by some of the leaders of the scientific-management movement. As Edwin Layton (1962) ex- plained, however, Veblen got this all completely wrong: the uprising was not the work of the line engineers Veblen exalted but of consulting engineers—a far more pecuniary breed—who were protesting the reduced status they were suffering as more and more engineers were hired on as line employees of corporations.

81. Klein and Leffler (1981).

82. Young (1989, pp. 73–74).

83. Dupré (1999); Juma (2016, chapter 4). New Hampshire, Vermont, and West Virginia

required margarine to be colored pink. Despite the privations of depression and war, these regu- lations remained in place until the 1960s. Future Nobel Laureate Theodore Schultz resigned in protest from his position as head of economics at Iowa State College (now University) after the College suppressed a pamphlet he had written urging the use of margarine as a cheap source of fatty acids during World War II.

84. Olmstead and Rhode (2015).

85. Coppin and High (1999); Wood (1985); Young (1989).

86. Law and Libecap (2004).

87. Coppin and High (1999); Law (2006). Wiley apparently angered Teddy Roosevelt by

attempting to ban saccharine, which Roosevelt was in the habit of using. 88. Carpenter (2001).

89. La Porta, Lopez-de-Silanes, and Shleifer (1999); Morck (2010).

568 Notes to Chapter 3

90. For an authoritative discussion, see The Oxford Handbook of Business Groups, especially the synthetic essay by Colpan and Hikino (2010).

91. Granovetter (1995).

92. The term horizontal is from Almeida and Wolfenzon (2006).

93. Langlois (2013a).

94. Dalzell (1987).

95. By contrast, the much larger textile system of Lancashire, which had started much earlier

and grown up more organically, operated as an industrial district—a business group in the most networky sense—coordinating through thick markets rather than equity ties. The American mill companies themselves were far more vertically integrated than their English counterparts, having to engage initially in the complete series of stages of production, including the making of machinery, stages whose outputs could be had in the market in Britain. The machine shops of these and other textile mills eventually spun off what would become the American machine- tool industry (Rosenberg 1963).

96. Moody (1904, p. 155).

97. Bell (1960, p.40).

98. Kramer (1964, p. 294). Morgan partner George W. Perkins averred that naming all of-

ficers and directors was a policy that the House of Morgan “found indispensable in making their combinations” (Garraty 1960, p. 133)

99. I have discussed many of these issues elsewhere (Langlois 2013a). See also Morck (2010) 100. Livesay (1975, p. 93).

101. Johnson et al. (2000).

102. Churella (2012, pp. 90ff.). Needless to say, the legislature refused to grant the B&O a

Pennsylvania charter.

103. Livesay (1975); Nasaw (2006).

104. The Pennsylvania Railroad was in fact a pyramidal group, as it owned only one-third of

the stock of the Pennsylvania Steel Company, the outfit that first licensed the Bessemer process (Temin 1964, p. 129).

105. Temin (1964, p. 154).

106. Temin (1964, pp. 190–93).

107. Hogan (1971a, chapter 14); Moody (1904, pp. 152 ff.).

108. Hidy and Hidy (1952, pp. 310–12).

109. Chandler (1977, p. 424).

110. Allen (1935, p.81).

111. Passer (1952).

112. Carlson (1991).

113. Chandler (1977, p. 428).

114. GE “came to resemble the sort of integrated enterprise that George Westinghouse had

developed to supply the railroads and was then creating in the electrical industry” (Usselman 1992, p. 304). Chandler (1990, pp. 215–16) implies that Westinghouse Electric was less manage- rial than GE, but the difference was mostly in the area of finance: in order to keep his

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