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Papers Presented at the BHC Annual Meeting

ISSN 1941-7349

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College of William and Mary

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College of William and Mary
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Harvard University
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2007 Annual Meeting Abstracts

Stephen B. Adams
Domestic Direct Investment and Entrepreneurship in American Second Mover High-Tech Regions
This paper examines Research Triangle and Silicon Valley as second movers—high-tech regions that did not build on existing capabilities nearby. For such regions, only after a critical mass of scientists and engineers is built from foreign direct investment (FDI) or domestic direct investment (DDI) does entrepreneurship become a dominant part of a region's development. As of 1980, about 90 percent of employees in Research Triangle worked for companies based elsewhere. As of 1970, nearly two-thirds of high-tech employees in Silicon Valley worked for satellite operations of firms headquartered elsewhere. FDI and DDI have been associated with external exploitation, especially regarding resource-based economies. America's strongholds of information technology have turned that power relationship on its head, with most of the long-range value accruing wherever the workers happen to be. A critical mass of engineers and scientists in proximity to a research university in places such as Silicon Valley and Research Triangle represents a first step toward competitive advantage in the knowledge economy. Attracting FDI does not represent an abdication of local power and control—so long as an academic anchor acts like a magnet holding the region together as it makes the crucial transition to indigenous entrepreneurial enterprise.
Dimitry Anastakis
The Last Automotive Entrepreneur? Lee Iacocca Saves Chrysler, 1978–1986
This paper attempts to situate Lee Iacocca's role in the Chrysler bailout within a broader automotive entrepreneurial community, and to understand how his actions in helping Chrysler stave off bankruptcy in the 1979-1981 period helped to reshape not only the automotive industry, but business-government relations, and the very nature of "brink management" in a post-industrial America. In short, the paper attempts to answer the question of whether Iacocca fundamentally changed how automotive management operated in Detroit, or whether his actions in saving Chrysler remain an isolated, unique case within auto business history. It argues that one cannot understand Iacocca without understanding the changing pre-1980 milieu and its impact on the wider automotive industry and economy of the post-1980, post-Chrysler bailout period. Iacocca and the Chrysler situation were unique, yet they remain essential to understanding the direction of the US auto industry, and the end of American industrial hegemony more broadly.
Evelyn Anderson
Nissan's Keiretsu, 1956-1970
Because Toyota symbolizes the miraculous success of the Japanese automobile industry as a whole, scholars have thoroughly documented the nature of Toyota's business strategy and its keiretsu. In contrast, literature exploring the nature of Nissan's keiretsu and its business strategy was almost non-existent in the 1990s. The assumption was that the two keiretsu were identical, with similar characteristics, differences being a matter of degree. In this paper, I argue that the Provisional Act for the Promotion of the Machinery Industry (the Provisional Act or Kishinho), 1956-1970, enacted by the Ministry of International Trade and Industry (MITI), provided Nissan with incentives to vertically integrate some of its most important keiretsu firms; during these fifteen years, Nissan adopted hierarchy. I document how the Nissan keiretsu evolved in the period coinciding with the Provisional Act and how it differed from the Toyota keiretsu. Toyota's inter-firm relationship with its core keiretsu members was built on trust and organizational capability, whereas Nissan's initial postwar strategy was similar to Toyota's only in name. Contrary to common belief, Nissan's governance in this period was driven by transaction cost considerations in the absence of trust.
Jeffrey J. Archambault and Marie E. Archambault
Financial Reporting among Unregulated Industrial Companies in 1920
This study uses the 1920 Moody's Analysis of Industrial Investments to assess the extent of financial reporting by industrial companies. The reporting of an income statement and a balance sheet as well as the amount of disclosure on both of these statements is examined. Characteristics of companies that report an income statement or a balance sheet are identified using least-squares regression. Results for reporting an income statement and a balance sheet show a positive association with being incorporated in Delaware or New Jersey, trading securities on an exchange, having subsidiaries and international operations, and issuing equity in the past three years. Reporting an income statement was also positively associated with having rated common stock and issuing debt in the past three years. Income statement reporting was negatively associated with having a large number of officers on the Board of Directors. Balance sheet reporting was less likely for companies with rated debt.
Gerben Bakker
The Emergence of High Sunk Costs Industries: Market Structure, Entrepreneurship, and Technological Change in Services, 1750–2000
This paper investigates how long-run technological change and productivity growth in service industries differ from manufacturing by linking qualitative and quantitative approaches from management science (organisation level), industrial economics (industry level), and economic history (long-run productivity effect on the economy). It hypothesises that some services can be "industrialised," and that this coincides with a sharp rise in sunk costs (such as R&D or advertising), market size, and productivity, a shift from process to product innovations, and the replacement of "typical," "representative" firms by a few historically specific quasi-unique entrepreneurial firms with decisively large market shares. Because of inadequate measurement and industry/market definition, this industrialisation of services and the attendant productivity and welfare gains have not sufficiently been identified. The analysis of the shift from a fragmented to a highly concentrated industry structure also provides insights into the historical role of entrepreneurship in new industries and the Schumpeterian process of creative destruction. A process of entrepreneurial discovery led a few "smart" entrepreneurs to massively escalate their sunk outlays. The paper makes a beginning with empirical tests by investigating the entertainment and pharmaceutical industries in some detail, and by briefly discussing relevant aspects of the telecommunications, transport, and domestic services industries.
Bernardo Bátiz-Lazo
A Business and Technological History of the ATM in the United Kingdom, 1965–2005
Through archival research we investigate the impact of the introduction of Automated Teller Machines (ATM) in British retail banking. Contrary to the experience in the United States, in the United Kingdom the ATM has been largely neglected by historians and management scholars. Technologically, cash dispensers preceeded ATMs and were originally a British innovation but U.S. (e.g. IBM and NCR) and German manufacturers (e.g. Siemens) took the lead as ATMs became a global technology. The evolution of the ATM illustrates how banks adopted on-line, real-time computing for the entire branch network and highlights the role of network externalities in financial markets. From a business history perspective, the ATM epitomizes a shift in bank strategy—namely, how applications of computer technology moved from being potential sources of competitive advantage to being a minimum requirement for effective competition in retail finance. The study argues that during the 1990s, IT in banking (as measured by ATMs) led to reduced operating costs, coupled with increases in output (number of transactions) that resulted in greater efficiency. This research concludes that the introduction of ATMs have payoffs for banks as well as customers.
James L. Baughman
The Uneasy Underwriters: Advertisers and American Television, 1946–1956
Through the 1950s, advertisers held the upper hand in ways that deeply affected the newest medium. At first, the reluctance of most advertisers to enter television, or limit their purchases of TV time cheapened much programming. Even when, in the mid-1950s, television became the dominant mass medium, advertisers retained great leverage, despite efforts by the networks, notably NBC, to control the terms of trade. Most mass advertisers did begin buying significant amounts of TV time, yet only on the condition that their brands be protected. Brand protection, in turn, had all sorts of consequences, comic and tragic, for the young medium.
Hani Bawardi
Why Do Arabs Own So Many Grocery Stores? Clan Affiliation in Business Ownership in Flint, Michigan
This paper traces grocery retailing by Arabic-speaking immigrants over four generations in Flint, Michigan. Familial connections account for the domination of grocery retailing by enclaves of primary immigrant groups with village, sectarian, and familial connections or a combination of the above. Despite these ties, the grocery store setting is a highly structured and formalized business enterprise. Peddlers and traveling salesmen from the 1890s through the 1910s are responsible for the immigrants' entry in the business. In Flint, these families dominated the business in the interwar years: Farah, Khouri, Mansour, and Hamady. These dynasties faded with the sale of the last of the Hamady chain in 1975 and the gradual transition into real-estate developments and other pursuits—however, not before they facilitated entry into the business of seven individuals who immigrated in the 1950s and 1960s. These immigrants mentored a generation of grocery store owners, and by the 1980s Arab immigrants owned 98 percent of all grocery stores in Flint. At present, they own 96 grocery stores while Asian immigrants from India own eight stores. The major immigrant groups currently active in business listed in the order of most stored owned by country of origin: Palestinians from the West Bank city of Beit Sahour and Israel proper, Chaldeans from the city of Telkeif, Iraq; Lebanese, and a mixture of Indians, Jordanians, and a single Egyptian.
Stève Bernardin and Harrison Grafos
A 'Science' of Sovereignty? Domestic and Transnational Concerns in Automobile Safety
International standardization—a result of economic and political decisions that governments, industries, and voluntary organizations have taken for decades—is hardly a new development. Nevertheless, controversies over the use of science in international regulatory bodies are sometimes passed over for economically driven issues. This case study of car safety regulation—investigating the genesis of a conflict between two distinct scientific regulatory processes at the United Nations—illustrates how science can be at stake when national officials use science to defend their idea of a democratic regulatory process. Here European leaders, inspired by functionalist notions guiding the post–World War II rebuilding of the continent, advanced a model of majority voting at the UN to facilitate rapid economic growth of the automobile industry. Many years later the United States would propose its own regulatory model for the UN, spurred on by the rise of the Japanese auto industry. These two regulatory perspectives—European and American—confronted each other in the mid-1990s, when an influential transatlantic business lobby pushed for harmonization of diverging national regulations. In a recent development, China and India have emerged as the key players likely to ultimately decide the future of the transnational regulation of the auto industry.
Mark Billings
Corporate Treasury in International Business History
In this paper, I explore a hitherto largely neglected area of business history: the corporate treasury. Most business or corporate historians consider the corporate treasury function a specialized aspect of the finance function and give it little explicit attention. I argue that this neglect is undeserved, and consider how and why treasury has evolved as a discipline distinct from other aspects of the finance function. We can attribute the rise of the professional corporate treasurer to a number of factors: changes in the organization and financing of companies, including change and innovation in financial markets; the wider professionalization of management; and the internationalization of business. These factors affected different countries at different times. In Europe, economic and financial uncertainties in the 1970s acted as a major stimulus, whereas treasury, in common with other aspects of the "managerial revolution," developed earlier in the United States.
Regina Lee Blaszczyk
Are Synthetics "Test-Tube-Y and Unnatural"? Dorothy Liebes, Interior Designers, and DuPont Fibers in Postwar America
This paper explores the DuPont Company's efforts to market its new synthetic fibers—nylon, acrylic, and polyester—to the interior-design profession in the post–World War II era. Encountering resistance to synthetics among architects, interior decorators, and industrial designers, DuPont hired nationally known weaver and colorist Dorothy Liebes to erode tastemakers' biases against man-made fibers. From 1955 to 1971, Liebes used her ties within professional associations such as the American Society of Industrial Designers (ASID) and the Association of Interior Decorators (AID) to promote DuPont synthetics as an alternative to natural fibers such as cotton, wool, and silk. Although a champion of fabric eclecticism, Liebes succeeded in convincing high-profile designers of the technical superiority and aesthetic potential of synthetics. By the 1960s, prominent interior decorators like William Pahlmann Associates and renowned industrial designers such as Donald Deskey Associates were specifying "DuPont fibers" for important installations in private residences and public spaces, including hotel lobbies and airplane interiors.
Gordon Boyce
Language, Family, Diversions, and Socially Constructed Reality in the Merchant-Shipowning Community: The Bates of Liverpool, 1870–1945
Since the 1960s, historians have debated how social mobility, generational succession, and culture affected Britain's business performance. Aldcroft, Chandler, and others argued that social aspirations deflected attention away from entrepreneurial pursuits and absorbed resources that could have been put to productive use. A related phenomenon, the so-called Buddenbrooks syndrome, wherein later generations dissipate fortunes and enterprises built up by their forebears, is believed to have undermined the performance of British business, particularly in the late nineteenth century. These interpretations have been contested by other scholars who suggested that the pursuit of social mobility was rational in the British context, for it provided access to higher-level network contacts. Other critics challenged the idea of generational decline, citing examples of continued dynamism shown by family firms. This paper develops deeper insights into the relationship between social structures and communication. It pursues Casson's insight of an economy of structured information flows by investigating the content of communication in relation to its social setting. This study also elaborates upon Miller's consideration of an international maritime culture, which reflected distinctive behavioural codes and persisted until the 1960s, longer than others had suggested. Our analysis is designed to assess the durability of the British component of this wider culture. Finally, the paper considers developments in business correspondence observed by Yates, who found that in the United States the form and tone of letters changed as management became more professional at the beginning of the twentieth century. The present study explores how traditional forms of correspondence sustained a different, but durable, socially constructed reality and complementary cognitive processes that were well suited to sustaining business activities. To these ends, I investigate the links between language and business culture found in letters exchanged among members of a long-lived family-owned business, examining three sets of correspondence (written in the 1880s, 1900s, and 1920/30s) between three different generations of the Bates, who were merchants, ship owners, and private bankers based in Liverpool. My aim is to develop a different perspective from which to consider communicating processes, business culture, social mobility, and enterprise performance.
Philip G. Bradford and Paul J. Miranti
Technology, Associationalism, and the Transformation of Entrepreneurial Endeavor: Automating Odd-Lot Trading at the New York Stock Exchange, 1958–1976
Entrepreneurial endeavor in the context of this paper involved the efforts of the New York Stock Exchange to automate the trading of odd-lot securities beginning in 1958 because of the prodding of the SEC, market competition from rival exchanges and a changing organizational structure of finance. However, this niche market which had been dominated for decades by a duopoly proved difficult to automate because of the difficulties of forming consensus within the NYSE association about the direction and timing of change. While the technological transformation was finally completed in 1973, the forces transforming Wall Street led shortly thereafter to the ultimate demise of the original odd-lot dealers and the absorption of the business by giant commission houses and floor specialists.
Deborah Breen
The Individual in the Community: American Entrepreneurs in the Australian Colonies, 1850–1890
Following the discovery of gold in the Australian colonies in the 1850s, commercial adventurers from around the world made their way to the antipodes. Among these were a number of young American entrepreneurs. This paper examines the American entrepreneurs who made their mark in the Australian colonies in the latter half of the nineteenth century, and considers how individuals achieved success within intersecting communities. Individual entrepreneurs found support in communities based on family connections, associations through friendship and experience, and shared nationality. They also found support through informational networks created in the commercial world, including consular reports, trade magazines, and International Exhibitions. Primary sources of the era, including family letters, newspaper and magazine accounts, and consular records, reveal the complex communities within which entrepreneurs in Australia operated to achieve their commercial goals.
Douglas Bristol, Jr.
The Bush Doctor Cometh: Putting the Soul into the "Soul" Market
In 1969, Nathaniel Mathis, a 23-year-old, African American barber, opened the first unisex shop in Washington, D.C., and quickly won national press coverage for his talent styling the latest fashion, the Afro. The publicity touted him as the self-proclaimed "Bush Doctor," a title Mathis later had trademarked. After cutting Muhammad Ali's hair and being featured in an article in Cosmopolitan Magazine, the Doctor was recruited by the Johnson Products Company as their Soft Sheen specialist, and in this capacity, he advised the management on new product development in addition to traveling around the globe demonstrating the use of Soft Sheen. Simultaneously, he launched his own Bush Doctor line of hair-care products. Mathis' burgeoning career placed him in the vanguard of the flourishing "soul" market of the late 1960s and 1970s. As Susannah Walker and Robert Weems have shown recently, white-owned corporations played an instrumental role in creating the soul market by appropriating the imagery of the Black Power movement to gain a larger share of the African American consumer market. They also note the subsequent depoliticization of cultural symbols such as the Afro, the decline of black-owned businesses, and the marketing of degrading products such as the "blaxploitation" film Superfly. This paper offers a more balanced account of this chapter in the history of African American consumerism by showing that entrepreneurs such as the Bush Doctor put the "soul" in the soul market, creating successful businesses by giving expression to a new mood in Black America. Through oral history interviews with Mathis and an examination of his papers at the Smithsonian's National Museum of American History, this paper examines the soul market at the point-of-sale in black-owned barber shops and beauty salons. Barbers and hairstylists shaped fashion by introducing products to consumers and by telling corporations what Black America wanted. In the process, they also became interpreters of the new urban consumer market, helping their customers reconcile the tensions between national advertising and the traditions of African American community. The influence and success of hair-care professionals such as Mathis demonstrate that, although white-owned corporations may have reaped most of the profits from the soul market, African American business people made a positive contribution by shaping a marketing trend that celebrated blackness.
Stephen Broadberry
Market Services and the Productivity Race, 1850–2000: Britain, the United States, and Germany
There was little change in the comparative labour productivity performance of UK industry between the mid-nineteenth century and the late twentieth century. To understand UK relative economic decline, it is therefore necessary to look at services, where comparative labour productivity trends do mirror aggregate economy trends. Furthermore, these trends were not simply the result of mis-measurement of output in public, non-market services. Rather, they reflect US and German overtaking in private, market services. The key to achieving high productivity was the "industrialisation" of market services, which involved the adoption of high-volume, low-margin methods to produce industrialised or mass market services. The uneven spread of industrialised services across sectors and across countries explains the shifting comparative productivity performance of Britain, the United States and Germany. A number of individual sector studies are provided, covering transport and communications, distribution and financial services.
Marcelo Bucheli
Nationalist Conflicts around Oil Marketing in the Southern Cone: Standard Oil of New Jersey and Royal-Dutch Shell in Argentina and Chile, 1922–1955
During the 1920s and 1930s, most Latin American countries drafted nationalist legislation for the oil sector seeking to control the power of foreign multinational corporations. While most initiatives sought to limit the foreign companies' control of oil production, countries that were not self-sufficient in crude but with an economy that required large amounts of oil products developed nationalist policies around refining and marketing activities. This paper studies the case of Argentina (oil producer but not self-sufficient) and Chile (non-oil producer) and their nationalist policies concerning oil products marketing in the period 1922-1955. I show that these countries' attempts to control their internal oil products market were constrained by their dependence on crude oil made by the foreign corporations and by the way Standard Oil (New Jersey) and Royal Dutch-Shell protected each other. These two elements eventually forced both Chile and Argentina to organize local cartels between the state-owned companies and the foreign corporations.
Yuri Campbell
The Brothers Johnson: The Lincoln Film Company and the Role of Black Business in Creating Black Modernity, Culture and Identity
The Lincoln Motion Picture Company, America's first film-making concern owned and operated by African Americans, was started by brothers Noble and George Johnson in 1916. Hailing from Colorado Springs, Colorado, and Muskogee, Oklahoma, the Johnson brothers were raised in a largely white, middle-class community by a father whose expertise in horse training allowed him to go into business for himself. It is the aim of this paper to investigate that background so as to illuminate the community dynamics involved in the creation of the Johnson brothers' entrepreneurial spirit, an inquiry that hopes to both broaden our understanding of African American experiences with self-owned businesses that centered on technological know-how and the importance that the growth of black business had for African American culture and identity. This study will focus on ideas of whiteness as they relate business methods and the place of African Americans in the business world, along with the resulting influence film-making as business had on African American culture during the years leading up to the "New Negro" of the Harlem Renaissance.
Francesca Carnevali and Andrew Popp
Communities of Interest: Cooperation and Trust in Three Industrial Communities: Providence, Birmingham, and the Black Country
De-industrialisation, a shrinking welfare state and, for economic historians, the questioning of the Chandlerian paradigm have emphasized the importance of social networks capable of generating cooperation and trust. Economists and sociologists have converged as they seek to understand the connections among social capital, networks, and economic growth. Cooperation, aligned with a focus on concepts of "community," is seen as generating positive externalities (such as trust) and reduced transaction costs. However, conceptualizations of "community" often allow for a limited range of interpretations: that community is dependent on high levels of internal homogeneity and that in most of the literature "community" is often methodologically prior to related, dependent factors. This paper reconstructs the history of three business communities in order to explore the relationship between entrepreneurs and community contexts. Our cases will explore situations in which community is not simply based in homogeneity and prior to business activity but is instead created through entrepreneurial actions. Our cases show a more complex relationship between community and entrepreneurship than is commonly assumed. They also demonstrate how specific communities are "layered" within wider communities, emphasizing the centrality of contingent contexts to outcomes.
Adriana Castagnoli
The Female Entrepreneurs' Point of View and the Italian Economy
During the period from 1950 to 2000, gender-based entrepreneurial associations (above all, AIDDA) have provided a decisive contribution to a new women's entrepreneurial identity in Italy that extends beyond gender stereotypes connected with the family. The gender-based professional networks influenced the traditional social representation of entrepreneurship as an activity generally characterized by features identified with the male gender. Moreover, during the 1980s, media portrayals of a new generation of women entrepreneurs were important. In fact, in harmony with the new Italy of the "personalization of leadership" and of "political show"—as happened in other countries of that same period—they proposed new models of female professional success. The present portrayal of Italian men and women entrepreneurs tends to be oppositional, in part because women entrepreneurs' organizations are behaving increasingly as political players.
Daniel A. Clark
"Should Your Boy Go to College?" Mass Magazines, the Middle Class, and the Re-Conceptualization of College for a Corporate Age, 1890–1915
For too long historians of higher education and American culture have taken for granted the swift embrace of college education by Americans. Choosing to focus more on the changes within academia and professions as the source of expansion for American higher education, scholars have viewed the rising popularity of college as a natural by-product of modernization or of an expanding status-conscious middle class. Consequently, historians have overlooked how popular expectations of college may have shaped the demand for higher education and how the evolving conceptions of the benefits of a college education factored heavily into the emerging notions of class and masculinity around 1900. This paper seeks to examine some of the formative representations and visions of American colleges and universities in mass periodicals that helped to shape the broader public perception of the place of college in Americans' visions of success and identity (here male, middle-class identity). Essentially the nation's first truly national media, the mass magazines explored in this paper (The Saturday Evening Post, Munsey's, Cosmopolitan, Collier's, and American Magazine) functioned as a popular forum where editors, writers, contributors, and advertisers collectively redefined the ideal college education in ways that reflected the peculiar anxieties and longings of an emerging corporate middle class. In these magazines, the imagined benefits of a college education for a corporate businessman (posited as the American norm) coalesced around a vision of a hybrid curriculum that could at once instill the traditional liberal culture of a gentleman and the practical scientific mindset of the modern businessman. Visions of college and the new corporate businessman emerged together. Ultimately this popular vision of the curricular benefits of college as filtered through and widely disseminated by the mass media informed American expectations of and demand for higher education at least as much as any reforms within higher education or any demands of industrialists for personnel.
Richard Coopey
Enterprise on the River Severn, 1750–1950: A Linear Entrepreneurial Community?
This paper will examine a variant of the theme of networks, clusters, and districts in business history in looking at the interrelationships of entrepreneurs, businesses, labour and product markets and other contextual economic factors along Britain's major arterial waterway. It will explore the connectivity of the river economy and test the notion of the river as a linear cluster or district with a definable economic integrity. In addition to tracing the importance of the river itself as a economic entity, exploring riparian rights, changing patterns of trade and industry generated by the river, the paper will examine the historic relationship among ports on the Severn, notably Bristol, Gloucester, Worcester, and Bewdley. The upstream ports and their economic hinterland have a complex economic history, but serve at various times to link the industrial heartlands of Britain to the global economy through the port of Bristol, which operated as one of the major, trans-Atlantic shipping ports from the eighteenth century onward. Two case studies, one from the nineteenth century and the one from the twentieth, are instructive in delineating and gauging the ambitions and effectiveness of the river communities. The first revolves around a series of schemes aimed at rationalising the river through a series of capital-intensive civil engineering programmes, effectively turning several inland ports into ports capable of taking ocean-going traffic. The second major development was the formation of the River Severn Development Association in the interwar period, which aimed to construct a new industrial district, perhaps a proto TVA for Britain. In both cases the nature of the economy is revealed, allowing the business historian to get a good sense of the entrepreneurial community, its strengths and weaknesses.
Joaquim Cuevas, Lina Gálvez, and Lluis Torró
Integration or Cooperation: The Impact of Institutional Change and the Spanish Civil War (1936–1939) on the Network Structure of Alcoi Textile Firms
The aim of this paper is to analyse how the Alcoi textile entrepreneurs' network linked to one of the most important Spanish industrial districts responded to institutional changes and exogenous shocks—in particular, the Spanish Civil War (1936-39)—through modifying its integration and cooperation levels. With the beginning of the war in 1936, the centuries-old entrepreneurs' association and the 128 firms that belonged to it were taken under control by the workers. Some of the entrepreneurs escaped but most of them stayed in their factories, as part of the technical committee but deprived of their executive power, which de facto passed to the Anarchist Union CNT, which rationalised production by integrating all the existing firms into a single one. The war captive demand and the centralized organization imposed by the Unions explain the good performance of the integrated firms by end of the Civil War. The new fascist regime imposed after the victory of General Franco forced the conversion of all employer and worker associations into State Vertical Unions. The Alcoi textile entrepreneurs' network created in 1940 a limited company that allowed them to maintain their properties, achieving a greater degree of cooperation without property integration that has lasted until the present. This paper analyses to what extent this higher degree of cooperation was a consequence of the good results obtained during the integration process pursued in the war period, or an answer to Franco's institutional changes.
Stephanie Decker
Guarding Corporate Image: Advertising as a Countervailing Measure to Host-Country Nationalism in West Africa
When facing nationalist criticism, multinational companies have employed an array of countervailing measures to protect their investments from nationalisation or compulsory joint ventures. Existing studies on international business in West Africa have focused on legal and organisational measures taken to safeguard assets. However, in Ghana and Nigeria, British companies employed a number of 'soft' techniques to ensure a favourable environment for their operations: political lobbying, public relations, and image advertising. These should be seen in conjunction and connected to overall efforts at managing host country relations, but advertising reflects particularly clearly, in image and text, the way audiences, values, and representations shifted over time. This paper will link the challenges to corporate legitimacy from the 1940s to the 1970s with the imagery of advertising, especially the representation of Africans and what this meant for the construction of corporate image.
Jennifer Delton
Executives, Experts, and Activists: The Entrepreneurial Community of Workplace Integration, 1945–1964
This paper argues that CEOs, fair employment activists, and management experts constituted a kind of entrepreneurial community that began the work of integrating American workplaces during the 1940s and 1950s. Together, these disparate actors developed policies to overcome patterns of discrimination and a language to explain and justify these policies to shareholders, the public, and white workers. The paper challenges current explanations of workplace integration that privilege grassroots activism after 1964. The paper is based on documents from the McCormick-International Harvester Company Collection (Wisconsin Historical Society), FEPC materials, and trade journals.
Mark A. Eddy
Technologists Talking Back: Charles Brush and the Voice of Inventor-Entrepreneurs in Academic Research Science
The inventor and industrialist, Charles F. Brush (1849-1929), figured prominently in the rise of Cleveland as an important hub of technological innovation and rapid industrial expansion during the latter half of the nineteenth century. National fame in the late 1800s as the inventor of pioneering technologies in electrical lighting, generation, and storage, as well as his brilliant career as a business and community leader, also afforded Brush access to professional networks of American scientists. An enthusiastic practitioner of research science, Brush was an active, well-connected member of several prestigious scientific and technical societies, including the American Philosophical Society. He presented papers at society meetings, and his theories in physics were published in nationally recognized journals such as Science. Brush, however, was not a professional scientist, and his status as an inventor normally would have curtailed his participation in the increasingly exclusive ranks of research science. The present study will examine how changes in professional and popular conceptions of science, industrial support of research and higher education, and changes in the institutional organization of science at the turn of the century allowed highly successful purveyors of technology like Brush to affiliate themselves with academic scientists and to influence the flow of information among the self-identified representatives of pure and applied science.
Anton Ehlers
Renier van Rooyen and Pep Stores, Limited: The Genesis of a South African Entrepreneur and Retail Empire
Renier van Rooyen established Pep Stores, a South African retail clothing company, in Upington, South Africa, in 1965. My focus in this paper is the genesis of Renier van Rooyen as entrepreneur during the period leading up to the founding of Pep Stores, Limited. I attempt to situate these developments within the broader local, regional, and national context of the time and identify the factors, circumstances, or influences that had an impact on van Rooyen's early entrepreneurial development and the fortunes of his business ventures. The van Rooyen case suggests a wide range of factors, from childhood poverty, personal and family networks, and the influence of the local and national business community, to the socio-economic and political context. These are, however, secondary to the agency of the prime mover, van Rooyen, who commands center stage in his early entrepreneurial development and the eventual success of his business.
Susanna Fellman
A Manager and His Professionals: Planning and Constructing the Modern Firm in Finland, 1920s–1940s
This paper deals with the role of professionals and upper white-collar employees in the planning, construction, and modernization of a Finnish company, G.A. Serlachius Ab, during a period of transition. We analyze the division of labor and the tasks and duties of, on the one hand, these groups of employees and, on the other hand, the owner and manager, Gösta Serlachius, by studying three important modernisation projects. The point of departure is that the significance of the professionals in planning and in the development of the firm has been partly neglected, while there has been a tendency to overemphasize the entrepreneur. We will also look at personnel policies and managerial strategies with respect to these employees. Serlachius had an ability to employ competent professionals and to develop long-lasting employer-employee relations, based on loyalty and trust. The delegation of tasks and the building of a good "team" were crucial, as he had extensive engagements in society. However, Serlachius wanted to keep full control in "his" company and had continuously to balance between the need for delegation and the maintaining of control. This study provides new knowledge of the divergent professionals in developing the firm, but gives also a more profound understanding of professionalisation, skill-formation, and authority relations on the company level.
Caroline Fohlin
Creating Modern Venture Capital: Institutional Design and Performance in the Early Years
The institutionalized form of venture capital, as it is practiced today, dates back only to the early post–World War II era. This paper presents some early results of a new study on the evolution of the venture capital industry and the firms it helped create and grow. This paper focuses primarily on the level of entrepreneurs and firms in order to paint a more fine-grained portrait of institutional development. It also takes a longitudinal approach, following these people and institutions for an extended period of time. The first part of the paper quickly surveys the supply of organized venture capital finance from 1945 to the early 1970s, and gives a brief picture of the regulatory environment that created some of the need for a separate industry for venture capital financing. The second part investigates the sources of demand for venture capital, especially the entrepreneurs and companies that were financed by venture capitalists in the late 1940s through the 1970s. The third part presents some preliminary evidence on the performance of the various types of venture capital firms and the companies they backed, primarily in the form of long run stock returns.
Karen J. Freeze
Unlikely Partners and the Management of Innovation in Communist Europe: A Case Study from the Czechoslovak Textile Machine Industry
In this paper, I examine the role of management practice and Western partnerships in a revolutionary technology from a Soviet Bloc country: open-end spinning. Debuting in 1967, machines based on this technology tripled productivity in cotton spinning, making life easier for textile workers worldwide. Direct sales or licenses to the West brought Czechoslovakia some 80 percent of its hard currency for over a decade. How could this happen in a Communist country? Exemplary project management: the Czech project leaders understood management practices that became commonplace in the West twenty years later. Equally important were historical infrastructure (Czechoslovakia had been a leading industrial country) and the immediate political and economic context (the reform era that culminated in the Prague Spring of 1968). It benefited from the centrally planned economy: top-down financial support and extreme vertical integration, facilitated close collaboration among researchers, engineers, designers, and machine builders and users. User input from Great Britain and the United States and licensee input from Japan helped turn the machine from a revolutionary innovation into a runaway commercial success.
Andrea Giuntini
Relationships and Linkages between Railways and Telegraphy in Nineteenth-Century Europe: Networks, Technology, and Management
During the nineteenth century, railroads and telegraphy represented two among the most astonishing wonders in the world. These most technologically relevant large technical systems were built in parallel in Europe. Starting from the very beginning, around the 1830s, railways and telegraphy followed the same path. Both contributed to the birth and to the development of the idea of networks: subsequent networks were modeled on the establishment of the railways and the telegraph lines. The two technologies also jointly constituted a major event in terms of their popular and social impact on European societies, representing for a long time the frontiers of novelty and presaging a future completely immersed in progress. First, then telegraphy, and finally the transatlantic cable absorbed the Europeans' ecstatic attention and raised the most sensational expectations. This paper traces the parallel development and management of, and reactions to, these technical advances.
Eric Godelier
"Do You Have a Garage?" Discussion of Some Myths about Entrepreneurship
Official biographies of entrepreneurs often emphasize the importance of isolation, poverty, and determination as traits—symbolized by the garage—that drove the success of famous business innovators. U.S. examples include Bill Hewlett and Dave Packard and Bill Gates. Others who rose to success and wealth from obscure backgrounds include Andrew Carnegie, a Scottish immigrant and simple telegrapher who became a tycoon in the steel industry, and Henry Ford, who left school at the age of sixteen. In France, Louis Renault, who failed to enter the École Centrale, was a genius in mechanics; Charles Pathé, a fairground entertainer, became a famous film pioneer and a millionaire. How do those with officially little or no technical, commercial, financial, or managerial formal knowledge become successful entrepreneurs and managerial heroes? I explore two interconnected issues: how the world of business creates its own myths and heroes, and the ways in which these representations influence those who study corporate history.
Mark L. Goldstein
Washington and the Networks of W.W. Corcoran
Leveraging critical networks throughout his many professional and political endeavors, W.W. Corcoran played a significant role in the transformation of America's financial markets and in the growth of the nation's capital. Corcoran made important contributions to the social, cultural, and physical development of an increasingly sophisticated capital city and was one of the nation's most important philanthropists almost a generation before the wealthy Gilded Age. This paper furthers the notion that networks played an integral part in capital formation and business development—beyond being a bridge between the world of partnerships and Chandlerian hierarchies—and could achieve individual and organizational objectives. It also suggests that network characteristics may well have been more enduring and multifaceted than previously recognized, as the employment of such networks transcended business activities to achieve other mutual goals. Furthermore, the consolidation of a self-conscious and influential American moneyed class appears to have formed earlier than generally acknowledged and seems to have broadly influenced politics, culture, and the urban built environment in places other than New York, including the seat of American government.
Margaret Graham
Henry Phelps Gage: Standardizing Entrepreneur at Corning Glass Works, 1911–1947
Entrepreneurship and standards-setting activities are usually considered antithetical activities, and for good reason. Innovating entrepreneurs are often neither interested in, nor suited for, the painstaking work of negotiating standards, and even less for the demanding activity of maintaining them. Standards can freeze processes and product to the point that they cannot easily be changed or adapted. In Henry Phelps Gage, employee of the Corning Glass Works research establishment from 1911 to 1947, we have an innovating entrepreneur who was actively involved in the setting, negotiation, and maintenance of key optical standards for colored glasses. Gage promoted an entrepreneurial approach to standards, representing them as providing natural opportunities to develop new products in rapid succession. Gage's career bridged two very different eras in the history of the company, and in the development of its research activities. As head of Corning's optical research laboratory he was first valued and later resented for his entrepreneurial temperament and activities. It was his role as standards representative for Corning and his problem-solving relationships with customers that made him important to the company in both eras. While the role of context has increasingly been recognized in economic history, the effect of changing business context, both in the company and in the wider business environment, on companies' ability to innovate has not often been explicitly documented. Gage's career as an entrepreneurial standard setter demonstrates the effect of changing historical context on the careers of a company's employees as well as on the relationship between standards and company strategy.
Janet Greenlees
The New England Cotton Textile Manufacturing Community and Workers' Health, c. 1870–1939: Relationships between Investment, Concern, and Profits
During the Progressive Era, public health concerns became entwined with the environments in both public and private buildings. In the New England cotton textile industry, public health concerns that affected the workplace were debated at employers' association meetings and in the trade press. Yet while these papers and technology advertising clearly reflect a concern for operatives' health, to what extent did this affect reality? This paper utilizes business records, employers' records, and the media to take further the argument that the adoption of new workplace health measures was more likely to occur when it made best business sense and to add that it was also more likely to occur when public pressure for reform was high. Consequently, it is understandable why during this period, technology manufacturers incorporated health into their marketing strategy.
Shane Greenstein
Innovation and the Evolution of Market Structure for Internet Access in the United States
How and why did the U.S. commercial Internet access market structure evolve during its first decade? Commercial Internet access market structure arose from a propitious combination of inherited market structures from communications and computing, where a variety of firms already flourished and entrepreneurial norms prevailed. This setting nurtured innovative behavior across such key features as pricing, operational practices, and geographic coverage. Inherited regulatory decisions in communications markets had a nurturing effect on innovative activity. On-going regulatory decisions also shaped the market's evolution, sometimes nurturing innovation and sometimes not. This narrative and analysis informs conjectures about several unique features of U.S. market structure and innovative behavior. It also informs policy debates today about the role of regulation in nurturing or discouraging innovation behavior.
Louise Guenther
Embedded, yet Separate: British Cultural Strategies of Legitimation in Nineteenth-Century Brazil
Entrepreneurial British merchants, seeking out new markets to replace those lost during the revolutionary and Napoleonic wars, lay the early foundations for today's global economy. How did these expatriate communities come to project such a strong, reliable business image in a foreign, and in some ways hostile, cultural environment? In Latin America, British imperial politics took a back seat to commercial interests, and this led to the hybrid forms of influence that would become known as British informal empire in nineteenth-century Latin America. This paper takes the case of Bahia, in northeastern Brazil, and argues that the British enclave gradually developed a strategy of interlocking political, cultural, and psychological dimensions to sustain a viable presence in Bahia, while minimizing the risk of individual over-identification with the locals in any significant respect. Primary sources include consular correspondence between the British consul, the Foreign Office, and local officials, close readings of travel narratives, and novels and poems written by Brazilians about the ingleses in their midst, to demonstrate the strategically coherent yet pragmatically improvised nature of the merchant community's activities, relationships, and cultural perceptions.
Cai Guise-Richardson
Art and Artifice: The Introduction and Adoption of Machine-Made Lace, 1760–1880
Development of machine-made lace between 1760 and 1880 opened the lace market to the middle class. As imitation lace approached and surpassed the quality of hand-made, it transformed the social meaning of lace. To the extent it was indistinguishable from the "real" thing, machine-made lace became socially acceptable. Middle class women largely accepted machine-made lace as artificial. But for these women, machine-made lace allowed them to appear of higher social status. Between 1830 and 1880 lace was transformed from body jewelry to simple textile as high-quality machine-made forgeries made it impossible to judge a woman's affluence by the quantity and quality of lace on her person. Adaptations to knitting frames and development of twist-net lace machines, around 1800, brought lace to a wider market. By 1840, machine-made lace only differed from "real" in subtle ways. Machine-made laces made a substance associated with the very wealthy available to the middle class. By the 1880s machine-made lace had largely displaced hand-made lace. Increasingly small proportions of lace were hand-made. Regional styles and designs ossified, partially to allow identification of "real" lace. Through successful imitation, mechanization of lace production altered the social meaning of both the "real" and "artificial" product.
Thomas Haigh
The Web's Missing Links: The Search Engine and Portal Industry
The web navigation industry was created in the mid-1990s by web directory firms (Yahoo, Magellan) and search engines (Excite, AltaVista, Lycos, Infoseek). By the late 1990s, both classes of firm were attempting to remake themselves as web portals, offering integrated access to a wide range of services. Few portals survived the collapse of the dot com boom. I show that subtle design choices taken during the pre-commercial period of the Internet and by Tim Berners-Lee in the original design of the net created a need for specialist navigation services and largely determined viable business models. But only the unusual behavior of venture capitalists and investors during the late 1990s can explain the suicidal determination of early search firms to become portals. The evolution of this industry was driven by interactions between the culture of the pre-commercial Internet and attempts by portal company leaders to duplicate the practices and models of existing media companies.
Leslie Hannah
What Did Morgan's Men Really Do?
Before 1914, London, the financial centre of a country half the size of the United States, had a stock exchange that was larger and qualitatively more developed than New York for both domestic and overseas financing needs. J. P. Morgan's higher profits in New York arose partly from conflicted deals that would later be illegal, as they already were in London. His contributions to the rapid catch-up process by New York are more plausibly seen in terms of successful emulation of European precedents than the information signaling alleged in over-determined, "Whig" models of American financial innovation.
Ellen Hartigan-O'Connor
Cleaning Up or Scraping By? Women in the Early Atlantic Service Economy
The eighteenth-century trading economy generated a broad base of customers for urban women in American ports, who increasingly sought employment as laundresses, drink-sellers, and boardinghouse keepers in the outsourced work of the Atlantic service economy. While their activities have often been interpreted as the "natural" extension of female unpaid labor, evidence from civil court records, newspaper advertisements, city directories, and business correspondence suggests instead that these women were entrepreneurs of a particular sort. Female entrepreneurs were more likely to change their businesses to respond to family demands and often drew skills from domestic life into the marketplace. When they expanded, it was often through intensifying existing customer relationships rather than cultivating new ones. These features of female entrepreneurship created the shape of the Atlantic service economy. Forging ties across many of the seeming divides of the eighteenth-century economy, women linked home and market, paid and unpaid labor, and production and consumption. Using the lens of entrepreneurship helps us to see these connections as deliberate constructions rather than the "natural" default of female employment. Rather than see them as captives of their own flexibility, we can observe how entrepreneurial women drew upon both flexibility and specialization to make "women's work" pay in the marketplace.
Lars Heide
Facilitating Technology Service: Welding Standards and the Shaping of a Danish Technology Service Provider, 1939–2005
This paper discusses how standardization regimes in the twentieth century facilitated technology service based on the history of the Danish welding inspection company, Svejsecentralen (the welding center), renamed FORCE Technology in 2003. This company was established in 1940 to facilitate X-ray inspection in Denmark. The rationale for this establishment was the competitive advantage of German industry already having X-ray inspection of welding. The German inspection was based on national industry standards written in the mid-1930s. Subsequently other European industries laid down similar standards varying among countries. In the 1970s, the Danish government established government authorization of companies to certify inspection. This regime distinguished by facilitating challenging service providers. The third regime of European standards grew out of the building of the single European market between 1987 and 1992. Common European welding standards simplified welding inspection across borders. Additional international standards were constructed for company organizations. FORCE used the two complementary sets of standards to expand into neighboring countries and became an international service provider.
Eric S. Hintz
Independent Inventors in an Era of Burgeoning R&D
The early twentieth century represented a transitional period in the history of American innovation. Historians have typically assumed that the rise of industrial research labs at firms like GE and AT&T signaled an end to the era of heroic, independent inventors like Thomas Edison and Alexander Graham Bell. However, a close look at the historical U.S. patent data shows that patents granted to individual inventors outnumbered corporate patents until the early 1930s and represented nearly 50 percent of total patents through the 1950s. In this paper, I explore the case of independent inventor Samuel Ruben and his primary licensee, the P.R. Mallory Company. Unlike earlier inventor-entrepreneurs, Ruben preferred to license his patents to manufacturing firms and serve as their consultant. Meanwhile, Mallory followed a hybrid innovation strategy, working with outside inventors like Ruben, while simultaneously investing in its own integrated R&D laboratories. For Mallory, the locus of innovation resided both inside and outside the firm.
Takashi Hirao
Diversification and Labor Strategy of the Nippon Rayon Company, Ltd., after World War II: A Case Study of the Introduction of Skill-Based Management in the Japanese Textile Industry
This case study aims to clarify why Nippon Rayon, whose position in the Japanese chemical fiber industry was lowest, reassigned the labor force in advancing diversification into new business, nylon, in the late 1950s, when the firm was faced with decline of its main business, rayon, and how intellectual skills, one of characteristic of Japanese workplace, were used by the firm. From a human-resource management point of view, this study resulted in the following conclusion. First, the reason for the reassignment was labor strategy to use potential services in the human resources. Second, skill- based management was introduced to foster the multi-skilled workers with job-rotation, in-house education and training, welfare policy and skill-based payment, which were employed and revised one by one in the 1960s. The reallocation of resources within the firm was carried out not as cultural, but as economic rational response to productive services available from the human resource.
David Hochfelder
"Trying to Turn an Elephant around in a Bathtub": Managing Western Union's Post–World War II Decline
Once dominant in the nation's telecommunications, Western Union began a long decline after 1929 due to technological obsolescence and declining demand. Postwar company leaders attempted to overcome these twin challenges in two ways. Walter Marshall, president from 1945 to 1964, modernized its plant and tapped new but closely related markets such as desktop fax machines and turnkey communications networks. Marshall's successor, Russell McFall, pursued a radically different strategy after 1964 and tried to turn Western Union into the nation's "information utility," investing heavily in computing and satellites. McFall transformed Western Union, but only by racking up a huge debt that it could not service. Western Union's decline and fall is significant because scholarship on corporate failure is sparse. Western Union's story has three lessons. Most important, a company having as its major asset its capacity for technological leadership must never lose that capacity. Second, a radical reorientation from a firm's core capabilities may be too costly to withstand in the long run. Finally, the telegraph industry may be dead, but the market it served, record communication, persists in the form of fax and email, indicating that technologies often outlive their corporate shells.
Vicki Howard
"The Biggest Small-Town Store in America": Department Stores and the Rise of Consumer Society
Nostalgia for independent family-run department stores, and the era of small-town life they represented, simplifies the story of these enterprises, turning it into a narrative of small versus big, of tradition versus modernity. This paper attempts to complicate this narrative through a case study of the early decades of Bresee's department store, located in the foothills of the Catskill Mountains in Oneonta, New York. Bresee's, which opened its doors in 1899 and closed them almost a hundred years later under the shadow of a new strip-mall development and proposed Wal-Mart Store, provides a rare opportunity to examine the relationship between "Main Street" retailing and the rise of American consumer society. Historians have used the nineteenth-century American department store as a harbinger of modernity. The Bresee case study shows that small-town independent department stores were not necessarily fully "modern" by the early twentieth century. It demonstrates how big-store business methods came later and documents how earlier modes of trade, such as credit and bartering, persisted into the early twentieth century, even in non-rural, northern contexts. Preliminary findings suggest that eliminating the urban bias in the historiography by including small-town retailing practices may lead to a later periodization of American consumer society.
Thomas C. Jepsen
"A Look into the Future": Images of Women Railroad Telegraphers and Station Agents in Pennsylvania, 1855–1960
In the April 1913 issue of The Pilot, the employees' magazine of the Reading Railroad, a cartoon appeared over the caption, "A Look into the Future," depicting an anxious-looking male railroad employee looking though a magical telescope into a future in which a "Miss R. U. Married" is the station agent at a railroad depot, while other women railroad employees flag trains and drive spikes. His anxiety at being replaced by one of these assertive women reflected the feelings of many male railroaders at a time when the number of female telegraphers and station agents working for the railroads was approaching a peak. This paper looks at some of the roles that women played in the expansion of the railroads in Pennsylvania in the late nineteenth and early twentieth centuries as telegraphers and station agents. It challenges the still commonly held notion that women did not actively participate in the technological advances of the nineteenth century that enabled the development of the railroad and telegraph networks. My paper makes extensive use of the writings and family records of women operators and agents, who, as visible and vocal members of their communities, left an extensive historical record that is only now being rediscovered.
Richard R. John
The New York Telegraph Act of 1848 and the Culture of Entrepreneurship in the Nineteenth-Century U.S. Telegraph Industry
My paper compares and contrasts the business strategies of the first two generations of telegraph promoters. My thesis is that changes in the political environment encouraged very different business strategies. The first generation (led by Amos Kendall and Francis O. J. Smith) focused initially on selling the patent of telegraph inventor Samuel F. B. Morse to the federal government, and, when this failed, on using Morse's patent to fend off competitors. The second generation (led by Hiram Sibley) responded to the new political environment that had been created by the New York Telegraph Act of 1848. To render the post-1848 industry profitable, Sibley forged close links with railroads, which had the effect of stabilizing markets and limiting competition. The combine that he established—Western Union—received a further boost when Sibley secured a federal grant to build a transcontinental telegraph line. The paper concludes with some observations about the parallels between the de-politicization of the telegraph industry in historical writing and the de-politicization of the telegraph as a channel of communication by contemporaries—with a focus on the press, social science, and the visual arts.
Robert Kanigel
"All Shortcomings Have Been Eliminated": The Corfam Debacle
Supported by research whose roots went back to the 1930s, DuPont developed a synthetic material, Corfam, for use in shoe uppers—which for eons had been made mostly of leather. Backed by the company's marketing muscle, and basking in the reflected glow of the company's success with nylon a quarter century before, Corfam was unleashed on the market in 1963, to the consternation of America's tanners. But eight years later, DuPont abruptly halted its manufacture and Corfam went down as one of the iconic business debacles of the past half century, on a par with the Edsel and New Coke. This paper revisits this much remarked upon, yet not recently explored episode of business history. In fact, Corfam did live up to many of the technical expectations its developers had for it. But it ran hard up against the vagaries of human nature, failing to satisfy needs for comfort, tactile pleasure, and fashion variety. At the time of its introduction, the DuPont public relations department issued a scripted question-and-answer dialogue asserting on behalf of Corfam that "all shortcomings have been eliminated." They had not been.
Tobias Karlsson
Downsizing, State Ownership, and Modern Labor Management: Severance Pay at the Swedish Tobacco Monopoly, 1915–1928
Among several forces contributing to early twentieth-century modernization of labor management was increased state involvement in the economy. In this essay, I consider the first known case of severance pay in Sweden: compensation to redundant workers associated with the 1915 nationalization of the tobacco industry. The tobacco monopoly, obliged to make severance payments during the first five years of its existence, continued to do so in the 1920s when downsizing the work force, reflecting the importance of implicit seniority norms and of expectations that the state be an ideal employer. Investigating compensation by worker category, I find that workers with firm-specific skills received a substantial premium and that men were more generously compensated than women. Parliament discussed the severance payments, and large unions representing non-tobacco workers demanded equivalent benefits for members directly and indirectly employed by the monopoly. State intervention in the tobacco industry probably had wider—though unintended—implications for labor management practices in interwar Sweden.
Robert C. Kenzer
African-American Businessmen in the Postwar South
This study examines all the African Americans who were credit-rated in the South during the first fifteen years after the Civil War. It analyzes these 1,156 African-American firms based solely on the ratings themselves to determine the pace at which firms were created, their types, locations, and structures, as well as the factors causing them to succeed or fail. In addition, it combines the credit ratings with the manuscript censuses of 1850 to 1880 to reveal what type of individuals created these enterprises, especially their level of property ownership, as well as whether they were enumerated in the manuscript censuses as being either black or mulatto. It emphasizes that despite the undercapitalization of these firms, they remained in business at a rate comparable to similar types of white-controlled firms. Further, it underscores the degree to which antebellum freedom as well as complexion shaped business success. In a sense, the Civil War liberated these antebellum free people by removing traditional restrictions, eliminating many white competitors who died in the Civil War, and literally emancipating millions of potential customers for their enterprises. Finally, it suggests the critical role politics,particularly on the local level, played in shaping the African-American business community.
Chris Kingston
Marine Insurance in Philadelphia during the Quasi-War with France, 1795–1801
Until 1792, marine insurance in America was entirely in the hands of private underwriters (although American merchants also obtained some insurance in London). By 1810, the business had shifted into the hands of joint-stock corporations (and much less was being done in London). This paper investigates this rapid transition between institutional forms, focusing on a pivotal period when newly formed corporations existed side by side with private underwriters, and when the risks to American shipping increased substantially as a result of French privateering during the Quasi-War between the United States and France. I use data from a private underwriter and a marine insurance corporation to examine the Quasi-War's effect on insurance rates, the volume of business, and the institutional structure of the marine insurance industry. I also contrast the American experience with that of Britain, where a similar transition to corporate underwriting did not occur at this time despite the stimulus of the Napoleonic wars, and with France and Holland, where a more gradual transition occurred.
Jane Knodell
Private Banking Networks and the Development of the Domestic Capital Market in the United States, 1840–1880
During much of the nineteenth century, the United States had a fragmented and decentralized commercial banking system. After 1836, with the demise of the nationally branched Second Bank of the United States, there were no chartered (incorporated) commercial banks that conducted banking operations across state lines. Given the increasingly national scope of markets in agricultural and manufactured goods, it was necessary for commercial banks to develop multi-state networks of banks to provide long-distance payments services. Banking networks are a good example of a group of firms "organizing themselves" to exploit opportunities for economic returns. This paper will focus on the networks developed by unincorporated, or private, banks, which have received less attention from the literature than the correspondent banking networks of chartered banks. I argue that private bankers' domestic networks were initally organized to exploit arbitrage opportunities in the payments system following the closure of the Second Bank of the United States. These domestic networks, together with the international networks of some of the major private banking houses, positioned the private banks for leadership in the development of the domestic capital market.
Christopher Kobrak
The Rise and Fall of International Family Banking: Private Banks, Capital Markets, and the Democratization of Finance
As Mira Wilkins has argued, there is a curious disconnect between business and financial history. Whereas business history literature has rediscovered the importance of family business in many countries and in many sectors of contemporary commercial life, for example, little has been written about family banking as an alternative to joint-stock, management-run financial institutions. This lacuna is odd for many reasons. First, family banking is one of the best known examples of family business in history. Second, family banks once dominated international banking. Third, some family financial institutions are still active (dominant) in certain market segments and countries. This paper will focus on how, when, and why family banking lost its predominant position in international (multinational) banking during the first few decades of the twentieth century. Although political upheaval undermined their businesses, family banks suffered, too, from America's maturing as a financial center. I will argue that this shift is connected to the increase of importance of American markets and financial regulations, which, in the 1930s, deliberately steered financial transactions away from private dealings and toward transparent impersonal exchanges and large markets, for which private banks were ill-suited or at the least for which they had no competitive edge. Using concepts drawn from an earlier paper on family business in Germany, this paper will further argue that in markets or market segments, such as leveraged buyouts, where uncertainty forms a greater part of the transactional environment, family banking still plays a significant role.
Naomi Lamoreaux, Margaret Levenstein, and Kenneth L. Sokoloff
Do Innovative Regions Inevitably Decline? Lessons from Cleveland's Experience in the 1920s
Cleveland provides an example of a famous center of innovation that ultimately lost its dynamism and declined. Once a hotbed of innovative startup enterprises in a remarkable number of important Second Industrial Revolution industries, including electric light and power, steel, petroleum, chemicals, and automobiles, Cleveland now stands out for its high proportion of residents below the poverty line. In this paper, we use the case of Cleveland to further our understanding of the life cycle of high-tech regions. Using patent data, city directories, census returns, and other sources, we examine trends in the number and productivity of Cleveland inventors and in the way these inventors exploited their discoveries. We find evidence of important changes in Cleveland's economy beginning in the 1920s. Although the city continued to spawn many startup enterprises, their individual contributions to the stock of patented technology were generally much smaller. Moreover, the city no longer attracted as many inventors from other regions.
Matthieu Leimgruber
Contested Boundaries: British and Swiss Life Insurers and the Challenge of Postwar Pension Provision, 1945–1980s
Based on insurers' trade associations' archives, this paper highlights the strategies developed by life insurers vis-à-vis the expansion of state old age provision in postwar Great Britain and Switzerland. In these two countries, group pensions managed by private insurance companies have constituted a significant share of occupational old age provision since the interwar period. Accordingly, Swiss and British insurers lobbied to shape multi-tiered pension systems that would safeguard the market for private provision. However, the outcomes of these postwar pension debates were quite different: whereas British insurers developed early on the idea of "contracting out" occupational provision as a response to Labour's proposals for earnings-related pensions (1958-1970s), Swiss insurers fought for the introduction of a mandatory "second pillar" of pension provision (1968-1985). Contrasting these strategies and outcomes enables us to better understand the role of a key business constituency in social policy debates.
Timothy Leunig, Nicholas Crafts, and Abay Mulatu
Which Was the Best-Managed Railroad in Britain a Century Ago?
This paper reviews the record of privately owned British railway companies in the period before World War I. Quantitative evidence is presented on profitability, total factor productivity growth, cost inefficiency and speed of passenger services. The results indicate wide discrepancies in performance across companies with return on capital employed, TFP growth and cost efficiency all falling over time in the majority of companies. Without the discipline of either strong competition or effective regulation weak shareholders were unable to prevent substantial managerial failure. This important industry is a clear exception to the conventional wisdom that late-Victorian Britain did not fail.
Andrea Lluch
Investment and Marketing Strategies of American Companies in Argentina during the Rise of Economic Nationalism in the 1930s
The Latin American and U.S. economies have long been intertwined. This is rooted in the first decades of the twentieth century, when U.S. businesses strengthened their economic influence particularly in the southern countries. American multinationals looked to South America not only as a source of raw materials but also as a market for finished products. The Argentine case, as a non-complementary economy with the United States, presented some peculiarities: Prior to 1914, the economic relationships between the two countries were relatively insignificant. Thereafter, the local economy experienced an important flow of foreign direct investment in manufacturing and selling organizations, spearheaded by American multinationals. During this period there was also a rise in consumer demand in a new environment permeated by industrial growth and secularization and influenced by new business practices—such as advertising—which reshaped the market and the patterns of marketing. During the late 1920s, Argentina was the most significant market in terms of American products and, in many spheres of economic activity, the country accounted for nearly half of the total activity of the entire southern continent. After the Depression, local government policies affecting direct investment in South America were numerous and complex, ranging from financial measures and exchange controls, changes in tariffs and taxation to outright confiscation. Significant changes had occurred in Argentina's economic position since 1931. This paper seeks to identify the characteristics and trends of American direct investment and marketing patterns adopted by U.S. companies during the 1930s. In this sense, it is hoped to identify the reactions and strategies employed by U.S. companies to adapt to protectionism and nationalistic economic policies (for example, the tendency to "go native" in consumer products). The research is based primarily on U.S. company records, the records of the American Chamber of Commerce, statistical information, and American/Argentine business magazines and newspapers.
Teresa da Silva Lopes and Mark Casson
Entrepreneurship and the Evolution of Big Business in Branded Consumer Goods
This study provides an account of how entrepreneurs have contributed to the development of successful global brands in consumer goods industries in the twentieth century. The industries analysed are those where the projection of the brands relies principally on brand imagery and intangible assets, rather than on product performance and other tangible assets. Some illustrations are food, drink, comestics, and fashion. Drawing on cross-industry and cross-country comparisons, and on a "stretched" definition of the entrepreneur, the paper shows that the management of the brands often pursued entrepreneurial and innovative strategies that can be distinguished from conventional, exploitative brand management. It also highlights the role of distinct types of entrepreneurs and marketing knowledge in the creation and development of successful global brands.
Joshua D. MacFadyen
Threads in a Web of Trade: Reciprocity and Flax in the United States and Canada
In the mid-nineteenth century a small but elaborate flax fibre industry connected Ontario farmers and textile and cordage mills in Massachusetts and New York state. The first Canadian flax mills appeared just as the 1854 Reciprocity Treaty eliminated the U.S. tariff on their products. Flax milling expanded during the American Civil War, but Reciprocity and the War fail to explain why the largest mill's output moved away from the fibre that would supposedly replace southern cotton and toward a manufacturing business that began to prepare flax goods prohibited by American tariffs and suitable only for local markets. Ontario's flax fibre industry continued to expand, despite the abrogation of Reciprocity in 1866 and a steadily increasing American tariff on unmanufactured flax. This study of business account books and trade journals shows that a better explanation for the early success of Canadian flax milling includes transnational networks of trade and industrial knowledge and the growing market for intermediate flax products in the Canadian manufacturing sector.
Andrea Maestrejuam
Contracting Invention: The Firm as Entrepreneurial Community
The markets for technology that formed within the framework of the first national patent system in Germany reveal a complex dynamic between individual inventors seeking returns on their ideas and firms with resources to commercialize the technology. The high costs associated with patent rights in the German system gave an advantage to large firms that organized entrepreneurial activity around in-house R&D programs. Firms in the chemical industry adopted employment practices that replaced apprentices with university-trained chemists to consciously "routinize" innovation. My analysis of employment contracts reveals the strategies developed by the firm to encourage inventive activity and to promote management styles among its employee-chemists. The firm demanded exclusive rights to develop, or not, new technology. The successes and failures of these strategies reveal a complex relationship between the firm management and the research chemists. Individual chemist's attitudes toward the proprietary nature of their work and the autonomy to set R&D goals worked against the policies of the firm.
Christopher Marquis and Michael Lounsbury
Historical Conflict and New Bank Foundings in US Communities in the 1990s
In this paper, we investigate how competing organizing logics facilitate resistance to institutional change. In particular, we examine how banking professionals resisted efforts of larger banks to expand their domains by acquiring smaller banks within individual communities. Drawing on historical evidence of tension between community and national banking interests, we argue that it was the effort of national banks to introduce a national logic of banking, emphasizing the efficiencies of geographic diversification, that triggered new forms of professional entrepreneurialism to preserve a community logic of banking and maintain local control banking infrastructures. Analyzing a detailed community-level dataset of U.S. bank activity, our results show that acquisitions in communities lead to new bank foundings, and that this pattern is particularly pronounced when the acquisitions are by out-of-town banks and when there is a larger population of bank professionals. We discuss how our study contributes to the emerging synthesis of ecological and institutional perspectives, entrepreneurship, and our understanding of resistance to institutional change.
Aaron W. Marrs
Railroads and the Antebellum South: Southern Exceptionalism?
Railroads in the pre–Civil War southern United States have had a reputation for economic underperformance and low impact on their surrounding communities, an interpretation that dates back to the early twentieth-century writing of U.B. Phillips. Were southern railroads truly exceptional for these reasons? This paper will explore some of the ways in which southern railroads were similar to and different from their northern counterparts. All companies, for example, had to address the concerns of multiple communities such as concerned citizens who worked to prevent trains from running on Sundays. In terms of labor, however, there was a significant difference in that southerners could turn to enslaved workers to build and operate their railroads. Slave hiring let southerners unite their conservative social order with the most modern technology available. In this effort to intertwine progress and chattel slavery, the antebellum South demonstrated its true exceptionalism.
Jennifer Malia McAndrew
"But You Don't Look Like a Negro": African American Entrepreneurs in Female Beauty Culture during the Mid-Twentieth Century
This paper examines the work of African American businesswomen in the fields of fashion, modeling, charm, and cosmetology. During the middle decades of the twentieth century, this entrepreneurial community used their business ventures to change the public image of the black female body is the United States and to grant African American women greater economic opportunity. My paper analyzes the transnational networks that black beauty culturists set up in Europe and Africa during this time period. I argue that these international projects played an integral role in facilitating African American beauty entrepreneurs' domestic goals.
Kim McQuaid
The Space Age at the Grass Roots: NASA in Cleveland, 1958–1990
This essay provides a rare glimpse of the Space Age at the grass roots of American politics and society, in the then ninth- largest city in America in which NASA's third-oldest research center is located. It expands recent discussion of NASA's "organizational culture" into the wider social, economic, and political environments in which NASA necessarily operated. Using local archives, it finds that NASA was a technologically innovative organization that was socially detached, and also unable to market itself effectively to local opinion leaders on political, economic, or social lines. NASA's attitude toward grassroots community support closely resembled the "town and gown" separation and socio-political distance customary in many university and college towns and cities. Not until the bells also tolled for NASA's center did its leaders realize that it could not prosper while the larger community around it declined.
Peter Miskell
Movies and Multinationals: How Did U.S. Film Companies Operate in Foreign Markets during the "Studio Era"?
This paper looks at how U.S. firms dominated the international film industry. In particular it examines why U.S. firms, while vertically integrated in their domestic market, did not retain this characteristic as they moved into foreign markets (where they did not own and control the leading cinema chains). This is intriguing because historians of the U.S. film industry place special emphasis on the importance of film exhibition rather than production. The major firms, we are told, are better thought of as chains of cinemas that made their own films rather than as production studios that happen to own cinemas. Leading firms like Loew's were in fact film exhibitors that had integrated backward into film production. As Douglas Gomery has demonstrated, the number of cinemas a firm owned was at least as important a determinant of performance (in its domestic market at least) as the types of films it produced. Yet if the exhibition side of the industry was so crucial to the success of U.S. firms at home, why were these same companies able to achieve such dominance in foreign markets—where they did not control the leading cinema chains?
Marine Moguen-Toursel
Emergence and Transfer of Vehicle Safety Standards: Why We Still Do Not Have Global Standards
The implementation of new U.S. vehicle safety standards beginning in 1966 provided solutions and studies that served as guidelines for Europeans. Within Europe, some market players wanted to align with American standards (to facilitate the creation of a larger market), but others did not (for trade protection). European countries failed to disseminate European standards rapidly because of the strongly opposing views among market players. European carmakers at first opposed American standards because of the technical and financial risks, but met the American criteria nevertheless. Germany and the United Kingdom were key actors in the progressive convergence of European and American standards. In 1972, European car manufacturers banded together to form the Committee of Car Makers of the Common Market. Their secret ambition was to undermine American influence in Europe on exhaust emissions and safety issues. The creation of the Committee corresponded with strong reactions against both the increasing technical barriers to European imports in the United States and to the serious threat posed to European exports by the possible extension of American standards worldwide.
John E. Murray
Actuarial Science in the Rise of Group Health Insurance
From about 1920 onward health insurance availability shifted gradually away from company and union sickness funds and towards group health insurance offered by commercial insurers. Methods employed by mutual sick funds to estimate premium and benefit rates changed little in the decades following World War I. Over this period, however, the actuarial science of group health insurance advanced steadily. As commercial insurers realized the potential profitability of group health, they pooled claims data for actuarial analysis, which eventually led to reliable actuarial tables. Both sickness fund and group health insurance were widely available until after the later 1930s, when group health's advantages in cost and benefit terms became overwhelming. This paper examines the advances in actuarial science that allowed group health to overtake sickness funds in cost-benefit terms. It provides a technological history complementary to the standard histories of health insurance that focus on political operations of group health insurers.
Tom Nicholas
Spatial Diversity in Invention: Evidence from the Early R&D Labs
This article establishes a link between spatial diversity in invention and knowledge capital accumulation using a unique data set of inventor and firm R&D lab locations for the 1920s. Despite the localization of inventive activity within the labs, one-quarter of inventors lived outside a 30-mile commuting radius of the nearest facility of the firm they assigned their patents to. I find a strong positive effect of distance from a lab on the technological significance of inventions, which is driven by inventors outside the 30-mile radius who were located close to an entirely different large city from the firm's labs. There is some evidence to suggest that firms sourced complementary, not substitute, inventions from these locations.
Dennie Oude Nijhuis
Bringing Labor Back In: Worker Solidarity, Employer Opposition, and the Development of Old Age Pensions in the Netherlands and the United Kingdom
This paper compares the role of labor unions and employer interest groups in the development of old age pensions in the Netherlands and the United Kingdom in the first half of the postwar period. The purpose of this paper is to show how organizational differences between the British and Dutch labor union movements explain the more generous outcome of public pension provision in the Netherlands as compared to the United Kingdom. Its addition to the debate over welfare state development lies in its challenge to the view of labor unions as the natural proponents of welfare state development. The strategies of British and Dutch employer organizations toward old age pension development are explained here through these differences in the stance of the British and Dutch labor unions toward public pension development.
Judit Olah
Empowering through Entrepreneurship
The early history of the Maverick Springs oil field in Freemont County, Wyoming, entails the fascinating story of how a community marshaled its resources and presented increasingly powerful arguments to protect its economic interest. The course of proceedings took those arguments to be successfully presented to state and eventually to federal officers. The proceedings also demonstrated that disentangling economic interest is an often slow process, and the pace itself can politicize the already heated financial discussions. The stakes were high, as revenues sought from the lease agreement were to support public, educational, and medical services, thus to directly benefit the community. A commentary cited in the local newspaper indicated how critical it was, to the overall positive outcome of events, that the local community maintained its poise, and calmly asked state and later federal officers to "have a fair hearing of both sides of the story." Two key elements to success were the building of statewide community support behind the local interest, and the gathering of expert opinions substantiating the validity of local claims by providing independent and competing assessment of the local assets.
Juanjuan Peng
Cooperation versus Competition: The Daxing and Yuhua Cotton Mills in Crisis, 1931–1937
We usually view the creation of the modern corporation as a crucial factor in the modern development of Europe and America. Historians of Chinese business also focus on the modern corporation in understanding China's modern economic development. Although many scholars testing China's enterprises in light of the "corporation" standard concluded that modern China failed to follow a Western model, few have searched for an indigenous pattern of modern Chinese companies. In this research, I trace the origin of one early twentieth-century jituan (business group). I argue that the indigenous Chinese jituan, rather than the imported Western corporation, is the key to understanding the transformation of China's modern companies. The story of Daxing and Yuhua Cotton Mills reveals that intensifying Sino-foreign competition triggered the formation of this business group in the early 1930s. Studying its development can contribute significantly to our understanding of an indigenous Chinese path toward modernization.
Brian Phelan
The Chrysanthemum and the Factory: Ruth Benedict, James Abegglen, and American Interpretations of the Japanese Economy, 1946–1960
This paper examines the ways in which two American intellectuals, Ruth Benedict and James Abegglen, interpreted Japanese cultural practice and economic relations in the fifteen years following the end of the Pacific War. The paper argues that while overtly racialized explanations of Japanese cultural and business practices had faded by the 1950s, they were replaced by explanations steeped in cultural determinism. Furthermore, the work of Benedict and Abegglen, through their cultural typing of Japanese "character" and economic practices, set the essential theoretical stage for subsequent American discourse on the Japanese postwar economic "miracle." The cultural typing of the Japanese economic system had profound implications for how American intellectuals and the popular media discussed the connection between culture and capitalism. As the American economy waxed and waned in the decades following 1960, the Japanese model served an important role as an alternative system that at times seemed a curious variation on American capitalism, at times a threat, and at times a potential model. In each of these instances, the cultural typing of the Japanese economy by some American observers played a crucial role.
Gary John Previts and Dale L. Flesher
Donaldson Brown (1885–1965): Twentieth-Century Financial Management Entrepreneur: The Power of an Idea over Time
Donaldson Brown developed the expanded Return on Investment (ROI) measure, or DuPont formula, in l914. However ROI was not his only contribution to financial management. Brown's dealer ten-day reporting system was widely and rapidly adopted throughout the auto industry. His ideas to support a variety of forecasting and planning techniques supported decentralized corporate management and his pricing processes were cutting-edge developments that others attempted to emulate. Flexible budgeting at General Motors, frequently unrecognized, also was in place during his financial administration in the early l920s. ROI remains Brown's most prominent contribution, and the technique achieved status as a dominant approach to financial management in industrial corporations by the l950s. As a national standard-of-performance measure, it was supported by varying sources including the American Management Association as well as in the teaching materials of academics, especially Robert N. Anthony of the Harvard Business School. The impact of these forms of dissemination led to ROI's being adopted eventually at the Ford Motor Company, one of GM's most intense rivals, when its previously autocratic centralized style of Ford family management, which had little need for financial management techniques, was replaced by a team known as the Whiz Kids, led by Harvard Business School alumnus Robert McNamara. This paper asserts the significance of the innovations developed and supported by Brown as being among the most important of those initiated in twentieth-century corporate America, and among the most important in the development of twentieth-century accounting and financial management thought. Brown is cited as one of the greatest innovators in twentieth-century management thought.
Daniel Raff
The Book-of-the-Month Club: A Reconsideration
The Book-of-the-Month Club, which was founded in 1926, was once among the most prominent of American corporations, a powerful force in its own line of business and conspicuous enough to the general public to have been a subject for cartoons in the New Yorker. It also represents a business model of considerable Coasean interest and a much studied but grossly misunderstood act of entrepreneurship. Most of the academic literature about the Book-of-the-Month Club is written by Cultural Studies academics and concerns the development of twentieth-century American middle-class culture. In this paper, I attempt to bring the company's strategic and business history into better focus, reconstructing the entrepreneurial context, the economic logic, the venture's resources and mobilization, and the evolving results. I do this deploying the approach to studying business history and strategy experience more generally sketched in the papers by Lamoreaux, Raff, and Temin in the American Historical Review (2003) and Enterprise and Society (2004). The main orientation of the paper is toward historicization rather than the long view, but the issues that arise in the course of it have striking contemporary resonance. They also suggest a somewhat novel view of the dynamics of American business in the late 1920s and the Depression.
Scott A. Redenius
Regional Economic Development and Variation in Postbellum National Bank Profit Rates
During the period following the U.S. Civil War, real and financial rates of return were higher in the South and West than in the Northeast. Despite over forty years of debate, economic historians have not yet reached a final consensus on the causes of these interregional rate differentials or their implications for how we assess the efficiency of the postbellum financial system. Most previous studies have attributed the rate differentials to supply factors—for example, transaction costs that limited interregional capital flows or regional differences in market power or risk. However, the evidence presented here on the relationships between regional growth rates, profit rate differentials, bank entry, and interregional capital flows is consistent with the hypothesis that regional differences in the growth in demand for banking services generated the interregional differences in bank profit rates. According to this interpretation, we should see the profit rate differentials as a mechanism through which the financial system allocated capital within and between regions rather than a sign that the postbellum financial system failed to allocate resources efficiently.
Claudia Riani
Cartel versus Monopoly: The German Nitrogen Industry in the Interwar Years
During the interwar years, the German nitrogen cartel included several small producers of agricultural fertilizers and a very large firm, BASF, later IG Farben. The cartel lasted from 1919 until the end of World War II. The proposed paper aims to show two facts that seem to contradict each other: that BASF was a potential monopolist, and that the cartel in which it agreed to stay set prices that were considerably lower than the monopoly price. This poses the question of why this firm stayed in the cartel, instead of establishing a true monopoly.
J. Andrew Ross
Hockeyists, Horsemen, Pugilists, and Promoters: Interwar Sports Entrepreneurs in the United States and Canada
In the early twentieth century networks of entrepreneurs emerged in Canada and the United States to satisfy the growing audience of sports consumers by innovating new sports, further commercializing older ones, building arenas and stadiums, and forming new leagues and associations. This process culminated in the interwar era (1918-1939) when promotion circuits of regional, national, and transnational scope emerged based on arena networks, forming the basis for the sport "trade routes" of the modern day. Based in archival research, this paper explores the entrepreneurial connections between sports entrepreneurs in the era with a focus on selected entrepreneurs in ice hockey, horse racing, and boxing.
Andrew L. Russell
Dot-Org Entrepreneurship: Sir Tim Berners-Lee and the World Wide Web Consortium
After inventing the World Wide Web ("Web") in the early 1990s, Tim Berners-Lee was recognized with a MacArthur "genius grant" in 1998 and, in 2003, promotion to Knight Commander of the Order of the British Empire. These were not common rewards for entrepreneurs in the so-called dot-com era. One might expect that Sir Berners-Lee, like other successful Internet entrepreneurs, earned tremendous riches from starting a business based on this seminal invention for the Third Industrial Revolution. Instead, he promoted the Web by creating an institution to coordinate the technical standards upon which the Web would thrive. His role in the creation and growth of this institution, the World Wide Web Consortium ("W3C"), provides a striking departure from other forms of entrepreneurship in the late twentieth and early twenty-first centuries. This paper, based on an analysis of Berners-Lee's role in the creation and development of the Web, argues that the W3C was a vital coordination mechanism that sustained the technological infrastructure of the Third Industrial Revolution. Accordingly, it needs to be understood as a significant entrepreneurial community—albeit one not centered on the pursuit of profit and market dominance.
Joshua Salzmann
The Creative Destruction of the Chicago River Harbor, 1889–1906
This paper examines some of the spatial and political implications of the shift from wooden sailboats to steel steamships for the world's fourth largest port, Chicago. From the city's founding in the 1830s to the 1890s, the Chicago River, which encircled the central business district, had been the city's single most important commercial artery. In 1889 the Chicago River reached its commercial peak, handling 10,994,036 tons of freight. By 1906 the river carried only 5,011,786 tons. The rapid decline of commerce on the Chicago was the result of what economist Joseph Schumpeter called a "gale of creative destruction," or a sweeping technological or market transformation. In the 1880s and 1890s, lake lines purged sailboats from their fleets and replaced them with iron and steel ships. These larger ships strained the physical capacity of the harbor and exacerbated competition between overland and river travelers for rights of way. Due to the political geography of the city, Chicago's elected officials often ignored navigation problems on the Chicago River as industry fled to more commodious ports. This paper examines how two physical barriers—center-pier bridges and river tunnels—blocked the passage of large ships, contributing to the demise of the Chicago River port.
Andrew K. Sandoval-Strausz
Financing the Palaces of the People: Hotel Entrepreneurs, Commercial Capital, and Internal Improvements in Jacksonian America
This paper focuses on the entrepreneurial communities that built hotels, among the most numerous and durable of all internal improvements. In a paper I delivered at the BHC several years ago, I argued that the first hotels of the 1790s and 1800s were tremendous financial failures, and that they were intended and recognized as elite spaces meant to exclude most Americans. In tracking this business type into the antebellum era, I argue that hotels were financed by urban businessmen who promoted hotels as projects that were experimental yet indispensable for municipal prosperity in a period of vigorous intercity competition for economic hinterlands. I also contend that hotels avoided attacks from Jacksonian Democrats because they attracted investors from many different backgrounds: hotel company share prices dropped consistently throughout the antebellum decades, and shareholders included workingmen and artisans who eagerly adopted the hotel as a way to advance their interests. This paper takes up a subject matter raised more than half a century ago by George Rogers Taylor, but which has been revitalized more recently by John Lauritz Larson's work on the politics of internal improvements, John Majewski's research on developmental corporations and shareholding, and Naomi Lamoreaux's scholarship on company structure.
Benjamin Schwantes
Disinterest and Distrust: The Ambivalent Relationship between Railroad Managers and Telegraph Entrepreneurs in Antebellum America
As telegraph entrepreneurs rapidly constructed commercial telegraph lines throughout the eastern seaboard and the Mississippi Valley in the late 1840s and 1850s, managers of many railroad firms expressed great ambivalence about incorporating telegraphy into railroad operations. Firms such as the Pennsylvania Railroad, Illinois Central, and Chicago, Burlington, and Quincy allowed telegraph entrepreneurs access to their right-of-ways for line construction, but the railroad community as a whole found little use for telegraphy beyond intermittent business communications. Railroad officials persisted in viewing telegraphs as nothing more than expensive and unreliable devices suited solely for commercial message traffic. Antebellum railroad managers had few incentives to incorporate telegraphy into railroad management. Their traditional operational system, based on strictly regimented timetables and primitive time-interval train spacing, provided an acceptable level of safety and efficiency. Even railroad managers who maintained some personal interest in telegraph technology often viewed telegraphy with considerably more than a degree of distrust, despite its potential for greatly reducing the risk of accidents, increasing traffic volume, improving managerial supervision over railroad operations, and generating greater revenues for railroad companies. Only after the telegraph had proved its value during the American Civil War did railroad officials and telegraph entrepreneurs finally forge enduring bonds that strongly linked both communities.
Peter Scott and Lucy Newton
"Jealous monopolists?" British Banks and Responses to the Macmillan Gap during the 1930s
By the end of the First World War successive merger waves had produced an oligopolistic, tightly cartellised English banking system, which was widely viewed as having restricted lending to small-medium- sized firms—the famous "Macmillan Gap" in industrial finance. We explore the reasons behind the failure of market entry to bridge this gap. The clearing banks are shown to have acted as "jealous monopolists," obstructing the activities of CFI, the only significant firm established to breach the gap (rather than narrow its upper limit). By poaching many clients it had vetted and approved, the banks blocked CFI's growth, deterring further market entry and thus preserving their monopoly position.
Daniel Scroop
A Faded Passion? Estes Kefauver and the Senate Subcommittee on Antitrust and Monopoly, 1957–1963
This paper examines the senate subcommittee on antitrust and monopoly (1957-1963), chaired by Tennessee senator Estes Kefauver. It assesses the extent to which the antimonopoly critique of bigness that had animated the politics of reform in the pre–New Deal era persisted into the postwar era, arguing that Richard Hofstadter was essentially correct in describing antitrust as one of the "faded passions" of postwar reform. But that does not mean that Kefauver's antimonopoly crusade was unimportant. It was significant, I suggest, in forming a bridge between an antimonopoly tradition rooted in the politics of the pre–New Deal era and the new antimonopoly politics of the 1970s and beyond, particularly as manifested in the "third wave" consumer movement. Tracing this connection between antimonopoly and consumer politics, the paper pays particular attention to the formulation and passage of the Kefauver-Harris Drug Act, the piece of consumer safety legislation that emerged from subcommittee, and to Kefauver's determined but forlorn efforts in the late 1950s and early 1960s to persuade the federal government to establish a new Department of Consumers.
Yasuhiro Shimizu, Mayumi Inoue, and Satoshi Fujimura
Initial Intent and the Development of an Employee Ownership Plan: A Case of a Japanese Trading Company in the Early Twentieth Century
Employee ownership plans have a relatively long history in capitalist countries, but many studies have focused on the effects of these plans, such as those on the workplace environment or on firm survival, and evaluated the plans in terms of their effects. In this paper we focus on how the plan was affected by the surrounding environment and changed its functioning as an incentive system. The case is drawn from the materials of a Japanese trading company, Kanematsu. It had a peculiar governance structure: almost all the share interest was held by the directors and upper employees even before the system started although it had started as a personal business. The plan was to ensure the continuity of management with voting rights, and the granting of shares was done rather selectively. As more university graduates entered the company, it became more difficult to select prospective directors among those with the same experience, and the share grants became universal. The paper will provide an example of how a system with ideological purposes was forced to transform into a part of the company's incentive system.
David B. Sicilia
Toward a Dynamic Model of American Entrepreneurship
This paper is about a vital middle ground—between general theories of entrepreneurship, and detailed empirical case studies of entrepreneurship. The approach begins with a set of general principles and definitions—or persistent traits—in the Schumpeterian mode, but moves on to identify the entrepreneurial challenges that are salient in a given historical context—variable behaviors. Applying this approach in three time periods of American history (the mid-seventeenth century, mid-nineteenth century, and mid-twentieth century), I draw upon recent literature on the history of U.S. capitalism, which has enjoyed renewed vitality compared with the more stagnant historiography of American entrepreneurship. My approach also connects the history of entrepreneurship with leading interpretations in American history, in particular republicanism and middle-class consumption, and points the way toward a new, dynamic stage model that is neither unidirectional nor progressive like those of N.S.B. Gras and Alfred Chandler.
Laura Singleton
Out of Many, One: The Divergent Social Vision of William Norris in the Minneapolis Business Community, 1967–1986
Corporate social responsibility practices often take on a character shaped by norms of the local business community. The pressure for businesses to build legitimacy for actions usually perceived as being in tension with economic goals means that community expectations, reinforced through peer networks, have been an important source of creating conformity. Most prominently, Minneapolis has been the subject of numerous studies and articles for its development of a shared corporate culture of philanthropy in the community, through the leadership of local businesses such as Dayton Hudson. Alongside the area's well-known charitable traditions, however, a distinctive formulation of corporate social action developed in a similar time period. William Norris, founder of Control Data Corporation, became widely known for affirming "social needs as business opportunities," stressing the duty of corporations to take on the project of solving social ills as part of their profit-making activities even as he openly criticized the practice of corporate philanthropy so widely lauded in his community. I trace the development of Norris' ideas in parallel to the better-known Minneapolis actors, identifying processes behind his divergence and the differing reactions to the parties' distinctive messages over time.
Hugh R. Slotten
Satellite Communications, Organizational Arrangements, and the Global Context of Entrepreneurial Activity
The development of communication satellites during the 1960s was a major technological innovation that has played an important role in establishing not only new global communication industries but also new business relationships connected to the process of economic globalization. This paper uses the example of satellite communications to explore how entrepreneurial activity is embedded in organizational arrangements. Specifically, this paper examines the establishment of the first global satellite communication system, Intelsat. Policy entrepreneurs in the United States decided to establish a satellite communications system open to all countries in the world. Partly as a response to cold war competition with the Soviet Union, the Kennedy administration overturned the previous administration's policy of treating satellite communications as simply an extension of traditionally regulated telecommunications. Instead of allowing private communication companies to set up separate systems that would likely primarily serve profitable communication routes to Europe or other major developed regions, the U.S. government decided to take the lead in establishing a single world system. Interconnected organizational and technical innovation reflected a new view of international communications. The paper specifically explores the strategies used by the United States to convince developing countries to participate in the global system.
Andrew D. Smith
Scale and Soap: Lever Brothers in Canada, 1889–1914
This paper discusses the successes enjoyed by Lever Brothers in Canada before 1914. I consider possible reasons as to why the company did better in Canada than in the United States in this period. These include: tariff differences, the existence of stronger local soap makers in the United States, and the nature of Canadian trademark law. Although the main focus of my paper is on the company's rapid growth in Canada in the twenty-five years before 1914, I will outline some reasons why Lever Brothers was slow to respond to the American intrusion into the Canadian soap trade that began in earnest around 1915. Lever's earlier successes in the Canadian market came in a unique of window of opportunity when Canada still looked to Britain. The major source in preparing this paper was the Unilever Archives in Port Sunlight, Cheshire. Lever's correspondence has been supplemented with published materials such as newspapers, international trade statistics, and census data.
Susan V. Spellman
"I would not be without this machine": The Cash Register in the Corner Grocery Store, 1880–1910
Focusing on the cash register, I examine neighborhood grocers as consumers and users of retail technology. Introduced in 1879, the cash register came to define both critics' and storekeepers' notions of what constituted modern retailing methods by the turn of the twentieth century. In adopting and adapting the register to everyday trade practices, I argue, small businessmen demonstrated their innovativeness and ingenuity, playing a crucial, albeit unacknowledged, role in the development of American commercial enterprise. In this way, I propose new criteria for evaluating these early tradesmen that move beyond financial indicators as a mark of comparison with twentieth-century chain stores, to consider corner grocers on their own terms. Using testimonial letters, trade literature, accounting ledgers, advertising, and photographic evidence, I suggest that our reticence to evaluate nineteenth-century retail firms as adopters of modern technology has enabled us to perpetuate the myth of the backward storekeeper, more inclined to lounge by his potbellied stove than to keep up with current business trends.
Maria Stanfors
Feminization and Professionalization of Pharmacies in Sweden

In this article, I describe and explain the feminization of pharmacies and the pharmacist profession in twentieth-century Sweden, making use of both quantitative and qualitative data to investigate the economic, institutional, and cultural determinants of the process. Swedish pharmacies feminized both quantitatively and qualitatively, first at lower positions, then at higher ones. From the 1970s, even the top managerial positions underwent feminization, making the example of pharmacies somewhat different from other cases, where feminization has taken place mainly at lower levels of the occupational hierarchy. In making international comparisons, we find similarities with, for example, Anglo-Saxon cases, but also interesting specificities in the Swedish case in terms of institutional effects, the timing of the feminization process, and the relative attractiveness and financial rewards of pharmacy work to men and women.
David Stebenne
Columbia, Maryland at Forty
This paper deals with the history of Columbia, Maryland, widely regarded as the most successful American new town of the 1960's. A privately developed city of 100,000 residents, it drew upon the skills of a leading real estate developer (James Rouse), his associates at the Rouse Company, institutional investors (most notably Connecticut General Life Insurance Company, now CIGNA), and academic experts in creating what was meant to be a model for improved urban and suburban development. As Columbia approaches its fortieth official anniversary observance in June 2007, the reaching of the city's target population in 2006 and the acquisition only a few years earlier of the Rouse Company by General Growth Properties (GGP), another leading real estate development firm, have combined to mark the end of the community's formative stage. This paper explores how the entrepreneurial community behind Columbia's creation managed to build it, and what lessons Columbia at forty has for future private-sector community development initiatives.
Dhanoos Sutthiphisal
Knowledge Diffusion and Crossover Inventions: Evidence from the Electric Industries, 1890–1910
Scholars have long noted the importance of general purpose technologies (GPTs) on the overall economic activity of an economy, and have investigated how such technologies were adopted and what their effects were. However, limited attention has been paid to exploring how a GPT diffuses to other industries, and what mechanisms may help facilitate such diffusion. More generally, we do not fully understand how inventive activity in various industries responds to the arrival of the GPT. This paper studies these issues by investigating the arrival of electric technology in the late nineteenth-century United States. The results on both the location of invention and the characteristics of inventors suggest that inter-industry knowledge spillovers were less than crucial in the application of electric technology to inventive activity in various industries. Instead, the evidence highlights the importance of higher learning institutions, technical training, and environments that promoted inventive activity in general.
Dominique A. Tobbell
Who's Winning the Human Race? Cold War as Pharmaceutical Political Strategy
Between 1959 and 1962, the American pharmaceutical industry was in crisis as Senator Estes Kefauver led a congressional investigation into the alleged administered pricing of drug firms. As its defense, the industry mobilized the rhetoric of cold war and promoted the industry as a critical national asset in the global war against communism. This meant not only framing all that Kefauver sought to change as an attempt to weaken the system of free enterprise; it also meant selling all that the industry did as an exemplar of that system. Thus, the industry hailed itself as a model of American free enterprise and sought, through the development of more products and through donations of drugs and other pharmaceutical supplies to aid missions in the Third World, to disseminate its message to those developing nations deemed susceptible to communism. At the same time, the industry argued that any challenge to the system of free enterprise not only threatened the country's international fight against communism but invited socialism into the domestic political economy. The industry's strategy to mobilize the rhetoric of cold war helped win the support of Congress and successfully derailed Kefauver's most radical efforts to increase the government's control over the drug industry.
Steven Tolliday
Micro-Businesses and Entrepreneurial Communities in the Japanese Ceramics Industry in the Twentieth Century
This paper considers a classic traditional Japanese "industrial district" (jibya sangyo) famous for its ceramic tableware, and looks at the dynamics and limitations of its success since the Second World War. The Arita ceramicware industry has an impressive history going back to the seventeenth century, and a notable record of post-war success. It has shared many of the features of classic Italian industrial districts, notably the "Marshallian industrial atmosphere" and (despite their ambiguities) producer traditions of trust and co-operation. But, unlike the most successful Italian districts, it has not gone on to link craft to innovation in products and techniques, and it has not developed a dynamic design culture. This paper considers two factors that have played an important role in this trajectory. Entrepreneurial innovations in distribution systems were a powerful factor in Arita's post-war success but ultimately soured its long-term development. Its legacy of quality and tradition has been its most powerful asset, but it has also been divisive within the community and has impeded its ability to develop both its art and its technical base.
John Turner
Protecting Outside Investors in a Laissez-faire Legal Environment: Corporate Governance in Victorian Britain
Although the British capital market experienced a great expansion in the nineteenth century, companies in Victorian Britain operated in a laissez-faire legal environment from the perspective of outside investors. This paper seeks to identify the alternative mechanisms which were used to protect outside shareholders by examining the corporate governance of over 800 publicly-traded companies. We assess the effectiveness of these mechanisms by estimating their impact on firm performance. Our evidence suggests that dividends acted as a substitute for legal protection. Our findings also suggest that board independence may also have played a role in protecting outside investors. Notably, company voting rules and shareholder monitoring does not appear to have played a role in protecting shareholders. The findings of this article, as well as having implications for contemporary law and finance debates, may have some bearing on the long-running debate on the role of the capital markets in the alleged failure of the Victorian economy.
Maki Umemura
The Interplay between Entrepreneurial Initiative and Government Policy: The Shaping of the Japanese Pharmaceutical Industry since 1945
The relative importance of entrepreneurs and policy-makers as agents of change in the Japanese pharmaceutical industry has fluctuated since 1945. During the American Occupation, the state assumed an active role in guiding the industry's development. Seeking a local supply of antibiotics, the Occupation authorities prompted Japanese firms with experience in fermentation technology to produce antibiotics. An unintended consequence was the birth of the modern Japanese pharmaceutical industry. Thereafter, the state took a more indirect role in industrial development. Although the 1970s saw a growing role for government in the form of stronger patent protection, only in the 1990s did it return to an actively interventionist approach. This presentation addresses the impact of industrial policy, an issue debated by Chalmers Johnson and his critics. It relates these debates to the Japanese pharmaceutical industry, an understudied sector of the Japanese economy.
Heli Valtonen
Does Culture Matter? Entrepreneurial Attitudes in the Autobiographies of Twentieth-Century Business Leaders in Finland and the United States
How do business leaders express entrepreneurial attitudes? Are there cultural differences among entrepreneurial attitudes in different countries? A comparative cross-cultural approach enables a focus on cultural differences and their influence on business. Because research studies frequently emphasize the value of "entrepreneurial" qualities for business leaders, I have chosen to discuss entrepreneurial attitudes in this essay, focusing on whether entrepreneurial qualities are defined in the same ways in different cultures. My answer is no. There are differences among countries, genders, and generations. The source material for this study consists of twentieth-century autobiographical texts of business leaders from Finland and the United States. I deconstruct the entrepreneurial attitudes of these leaders by interpreting their autobiographies using narrative and discourse analysis.
Richard Vangermeersch
The Marking of Stuart Chase as a "Red Accountant"—An Epic, 1917–1921
After completing in 2005 a book on the accounting aspects of Stuart Chase, the writer explored the Congressional Record for the years from 1917-1921. The writer was puzzled by seeming gaps in Chase's life in these years. The exploration yielded many additions to prior scholarship on Stuart Chase. His work at the Federal Trade Commission and the Federal Food Administration was much more encouraging than previously noted. The profit limitations employed by the Federal Government caused quite a war between liberals and businessmen in that period. The most exciting involvement not covered by past scholarship was that of J. Edgar Hoover of the Bureau of Investigation. Other examples of famous people noted in this study are: Woodrow Wilson; Herbert Hoover; John Reed; Robert H. Montgomery; and Robert LaFollette. The whole story is truly an epic.
Jussi Vauhkonen
A Cross-Class Alliance in the Making: Finnish Employers and the Emerging Welfare State in 1950s and 1960s
This paper deals with the role of Finnish employers in the development of the welfare state in Finland. Based on archival sources of employer associations, the paper argues for a cross-class alliance perspective. In addition, employer's labour market strategy is studied through the concept of "social" and its definitions. Finnish employers relied in the 1930s on a cross-class alliance aligning interests of industries and agrarian producers. This alliance crumbled away in the 1940s. In the 1950s, the Finnish employers tried to compensate for the lack of an effective cross-class alliance by strengthening their strategy of corporate welfarism. They failed. There was no chance of framing all social politics within social programs of the employers. But after the emergence of a new alliance in the late 1950s and early 1960s, the labour market goals could be achieved by other measures, too. The corporate welfarism did continue for some time, but by the late 1960s its days were over. Part of the welfare measures was now taken care of by the state with the support and blessing of the labour market parties, and another part by the municipalities. And last but not least, some parts were taken care of by markets.
R. Daniel Wadhwani and Geoffrey Jones
Entrepreneurial Theory and the History of Globalization
This paper builds on the recent efforts of a number of scholars to reintroduce entrepreneurship into the research agenda of business historians. We consider the role of entrepreneurship in the history of multinational business and globalization. The paper examines the value and limitations of adapting recent social scientific theories and methods on entrepreneurship to research on international business history. Specifically, we focus on three recent areas of social scientific work on entrepreneurship and weigh their value to business history research. First, we consider research on entrepreneurial cognition and the extent to which it can be employed to understand the historical ownership advantages of multinational firms. Second, we draw on concepts from entrepreneurial strategy and finance and examine the extent to which they can be used to understand the history of how firms allocated resources to uncertain international ventures. Finally, we focus on the question of the diffusion of the benefits of globalization and their impact on entrepreneurship within host economies. We conclude that the cautious adoption of some of these recent conceptual developments offers fertile opportunities for further research in international business history.
Peter Wardley
Modern Economic Growth and the Rise of Big Business: From Services to Industry and Back Again?
The history of "Big Business" over the last hundred years has been one of the most important and obvious features of human development. However, while the major firms which appear to dominate the contemporary global economy are very familiar to us, the process of long-term development which produced the world's current corporate giants remains largely uncharted. The conventional story which dominates the discipline of business history narrates the emergence and consolidation of "Big Business" by concentrating on enterprises in the industrial sector or, as it is defined by Alfred Chandler's terminology, the "Large Industrial Corporation." As this paper demonstrates, the large manufacturing company is not the typical representative of the large enterprise taken en masse, and still less representative is the multidivisional enterprise, let alone the US-domiciled multidivisional enterprise. Missing from this analysis are the varied and manifold firms engaged in service-sector activities which were equally essential to the dynamics of modern capitalist development. Also conspicuous by their absence are the state enterprises which have played important economic roles in both capitalist and communist economic systems. While the primacy of the industrial corporation was closely associated with the "Golden Age," the longer run perspective is much more complex.
David F. Weiman
The National Banking Acts and the Transformation of New York Banking after the Civil War
According to Margaret Myers, the National Banking Acts (NBA) did not cause the spatial concentration of correspondent balances in New York City, but merely institutionalized its position as national money center. Her claim is consistent with the recent consensus among economic historians, which emphasizes continuity over change during the Civil War era. Our in-depth analysis of the New York banking sector tells a very different story. The NBA directly increased the concentration of correspondent relations and balances in New York, but also created market opportunities for the entry and rapid growth of new highly specialized correspondent banks. The reaction of incumbents to federal government intervention and to new rivals was played out in the New York Clearing House Association deliberations, initially over admissions decisions and later over its policy of pooling reserves during severe panics. These reactions had important implications for the financial stability of the country as a whole.
David J. Whalen
Aerosat, A Case Study of Failure: Technology, Politics, and Markets
COMSAT was founded in 1963 after the Communications Satellite Act of 1962 determined that a public-private entity would hold the US "monopoly" on satellite communications. By the time the interim Intelsat agreements were opened for signature in 1964, it was clear that COMSAT would not control the future of satellite communications. The definitive Intelsat agreements, opened for signature in 1971, gave COMSAT a deadline: as of February 1979, COMSAT would no longer be the Manager of Intelsat. Over the next three decades COMSAT tried unsuccessfully to find a place for itself in the world of satellite communications as something more than a monopoly sales agent for Intelsat in the United States. None of these ventures—including SBS and STC—were successful. One of the first ventures that COMSAT addressed was the establishment of an aeronautical satellite to provide communications and navigation support to transoceanic air travel. The trials and tribulations of Aerosat are almost comical as different agencies and companies attempt to move the program forward. Within a few months of the award of a hardware contract to General Electric in 1974, the entire program was canceled because the ultimate users—the airlines—felt they had not been consulted.
John Wilson
British Business Community and Europe: Strategy, Structure and Investment Trends since the 1950s
With the end of Empire in the 1940s and 1950s, British business was obliged to think seriously about its international orientation. At almost exactly the same time, the nature and ownership of British business was moving from essentially the longstanding proprietorial system to one based on managerial lines. While the latter process was completed only in the 1970s, and Britain did not become a member of the European Economic Community until 1973, it is clear that by the 1960s European linkages were a much more important priority than they had been before. This paper will examine the implications of these dynamic influences on British business strategy, structure, and investment trends, looking especially at the extent to which firms engaged with both Europe and other European firms over a period characterised by extensive change (from the 1960s to the 1990s). At the core of the paper will be a database looking at the Top 50 firms over this period on an annual basis, which will be used to analyse three key issues: business strategy, organisational structure, and corporate governance trends. This will provide a much more detailed understanding of strategy, structure, ownership, and performance (SSOP) trends in British business, as they will be tracked on an annual basis (rather than once per decade). Linked with this SSOP data will be more detailed work on levels of internationalisation, mostly performed through the examination of firms from different sectors. The insights that this will provide into the nature and orientation of the British business community will be of seminal importance to our understanding of its dynamics and character at a time when it was being pressured by a wide range of factors.
Joshua Wolff
The Telegraph Act of 1866: An "Entering Wedge" against the Western Union Monopoly
In 1866, the Western Union Telegraph Company consolidated with its major rivals, giving it a nearly total monopoly over the American telegraph and inciting a debate in Congress over whether control of the industry should be left in the hands of a single corporation. The resulting legislation, the Telegraph Act of 1866, is easily dismissed as a weak and ineffective compromise, a clumsy first round in what would be a three-decade battle between Western Union and the federal government. However, despite the limited aims of the approved legislation, the debate in Congress should be viewed as a bold response to the sudden appearance of a monopoly on a scale never before seen in the United States, in an industry deemed essential to the public interest. The proposals in the 39th Congress to foster competition, regulate tariffs, or purchase Western Union's lines represent what Senator B. Gratz Brown called an "entering wedge" against the monopoly. In accepting the Telegraph Act's provisions, Western Union acknowledged the federal government's interest in upholding the public purpose of the telegraph, helping to create what David Hochfelder has called a "quasi-regulatory environment" in the telegraph industry.
Joseph H. Wycoff
Exhibiting Innovation: U.S. Mechanic and Manufacturer Associations as Entrepreneurial Communities, 1820–1840
This paper discusses craft artisans' and manufacturers' popularization of technology innovation and their conceptualization of a political economy of manufacturing as evidenced by the mechanics' journals and fairs first organized in the period from 1820 to 1840. A segment of master artisans who originated from the craft system broke with their traditions to form mechanics' institutes in an effort to unite science and the mechanic arts. Many of these institutes focused exclusively on organizing scientific lectures; however, the largest institutes in Philadelphia, New York, and Boston also had important connections to the first mechanic journals and fairs in the United States. Through these organs, the artisans of the old craft system formed an "entrepreneurial community" that solidified the preeminence of new technology in the American political economy. Specifically, I argue that artisans' associations in the first half of the nineteenth century combined aspects of natural philosophy and patent jurisprudence into a coherent discourse on the political economy of manufacturing that imagined a new species of personal property—combinations and compounds of motion—as the keystone of progress and the wealth of nations.
Takashi Yamamoto
East Meets West in an Entrepreneurial Farming Village in Japan: Endogenous Development Theories and Economic Gardening Practices
In this paper, I discuss one possible link between entrepreneurship and economic growth at the municipality level. I compare "endogenous development" theories developed separately in Europe and Japan to create community-based economic growth and to maintain local resources and industries. Japanese theorists pay more attention to the contribution of entrepreneurs. I relate endogenous development theories to the "economic gardening" approach introduced in an American city, practiced in many cities inside and outside the United States, and consistent with endogenous development theories in that it encourages the growth of local business. To demonstrate the validity of the application of endogenous development theories and the economic gardening approach in Japan, I introduce a case study of rural economic development in Ogata, a Japanese farming village, that involved significant achievement by entrepreneurs. I conclude that entrepreneurship matters in local economic development, because entrepreneurs with proper support mechanisms function as effective change agents in the economy.
Alexia Yates
"A profession for those who have none": Business Agents and Professional Communities in Turn-of-the-Century Paris
In 1886, a proposal was tabled in the French legislature to regulate the profession of "business agents," a heterogeneous group of commercial operators multiplying in the marketplace of late-nineteenth-century France. Focusing on the community-formation efforts of Parisian business agents, this paper inquires into why such a diverse group sought to achieve professional status in this period, the routes available to them, and the obstacles they encountered. In particular, the paper examines the formation and regulatory activities of the Compagnie des Hommes d'Affaires du département de la Seine and the Syndicat Professionnel des Hommes d'Affaires de France et des Colonies in the last decades of the nineteenth century. Through professional journals, disciplinary codes, and efforts to promote state intervention, these organizations mobilized to rescue the occupation of homme d'affaires from a position of perceived social denigration. Criticized as "a profession for those who have none," business agents struggled to define a field of expertise and professional monopoly, navigating the prevalent discourse of liberal individualism. Throughout, focus is kept on the ways in which community-building may be constitutive of particular commercial selves, providing a novel image of the French business actor and his milieu.
JoAnne Yates and Craig Murphy
Charles Le Maistre: Entrepreneur in International Standardization
This paper focuses on Charles Le Maistre, a key figure in spreading voluntary consensus standards-setting from the national to the international realm. He exemplifies Schumpeter's "political entrepreneur"—someone who operated in the realm of partially organized political forces to establish the administrative and regulatory systems that facilitated investment in new generations of technologies and firms. In 1901 he became Assistant Secretary of Britain's new Engineering Standards Committee, an organization that included representatives from professional and industry associations. In 1906 he became acting secretary of the International Electrotechnical Commission, the first ongoing international standards-setting organization. He remained a key player in both organizations for the next fifty years, traveling the world to spread principles of voluntary consensus standard-setting. He helped establish the American national standards organization and the first international standardizing association with a broad domain, the ISA (International Federation of the National Standardizing Associations). During World War II, he worked with the temporary Allied standardizing organization. After the war, he helped dissolve ISA and the war-time association and to form the new ISO (International Organization for Standardization). For half a century he proselytized for standardization, extending it from the national to the international realm.

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