Abstracts and Papers
Herman Miller, Inc., has earned a global reputation as a paragon of creativity, which has been an integral factor in the company's position as an industry leader. Based on recent scholarship in regional studies, however, one would never have guessed that a company from Zeeland, Michigan, distant from creative enclaves such as New York and Los Angeles, would make such an impact. How does a company so reliant on creativity in design thrive outside the orbit of the creative class? I will show how the furniture industry predicament and practices and the company's location provided key constraints under which Herman Miller operated. The company's location helped dictate a distinctive business model, with no designers on staff and in which none of the designers doing work for Herman Miller had exclusive agreements. The result was surrender of a substantial portion of the firm's strategic direction to outsiders. I will show how the company's "inconvenient" location became a virtue when the company responded with a model that positioned the firm to initiate and benefit from disruptive innovation rather than be victimized by it.
The state-holding IRI was created in 1933 as a way to sever the dangerous ties between banks and large industrial concerns in Italy. De facto, the three major banks at the time had been transformed into holdings for the nation's largest companies. This placed the central bank in a risky position, as it was the bottom line lender and if it unexpectedly stopped funding, it could have suffocated the economy. IRI's main goal was to put an end to the German model of the Universal Bank in Italy and, by doing so, create a system for supplying credit in an economy made up of small and medium-size firms. At the outset, IRI was not designed to be a permanent entity. But the companies controlled by IRI needed to be brought back to a "healthy" status and then privatized once their debts had been repaid. This plan revealed itself impossible to achieve because (1) most of the companies were extremely capital-intensive (making them expensive to sell off at the end of the process), and (2) because of their costly structures, they were also very expensive to manage. IRI found itself responsible for the care of industrial companies at the same time its format was based on a holding (IRI) totally owned by the state, while the companies held by IRI were open to private shareholders and responded to civil law as private concerns. In its early years, the companies making up IRI sought out the best managers available to lead the firms. These men were relatively free of political constraints (though they had to respond to the overall demands of Fascism, the war, and the policy of autarky). They enjoyed even greater freedom in the decade immediately following World War II, when there seemed to be a form of benign neglect by the political powers. But the contradiction remained: a holding owned by the state (and controlled by politicians) with companies that needed to be competitive players in the market. To lead the companies there was a need for a special kind of management: individuals in tune with market signals but also sensitive to extra-business demands that usually called for investments based on political and social reasons rather than sound economic objectives. The three alternative ways of handling this challenge (getting out of the system, being cooperative with the requests of politicians, or trying to reconcile market imperatives with broader extra-company goals) will be examined via the stories of three key managers of IRI in those years (Giuseppe Glisenti, Alberto Capanna, and Pasquale Saraceno).
Since its unification in 1861, Italy has moved from being a fragmented and mainly agricultural country to one of the seven most industrialized economies in the world. Some commentators interpret this as a success story, while others stress that the country never matched the technological capabilities of its competitors. In this paper we examine the different phases of Italian innovation activity, focusing on the importance of foreign technology and its channels of transfer. The paper is based on a novel dataset of domestic and foreign patents granted in Italy, France, Germany, Japan, Spain, Switzerland, the UK, and the United States, from the 1880s to 2010. Differences across channels of technology transfer and historical phases emerge, as well as in connection with the evolution of human capital endowment and domestic innovative capacity. Machinery imports contributed positively to innovation activity and productivity growth; inward FDI contributed positively to productivity growth, but not to indigenous innovation activity; the accumulation of technical human capital fueled both. In the long Italian Golden Age, for the first time the association of foreign technological knowledge with indigenous innovation processes strengthened productivity. In more recent years the dismal productivity growth is associated with under-performance in formalized innovation and reduced imports of disembodied technology.
Francesca Russello Ammon
"A Dirt Moving War": How World War II Advanced the Business of Construction Equipment Manufacturers
World War II has been called "A Dirt Moving War" for the critical role played by militarized construction equipment. As Army Engineers and Naval Seabees deployed bulldozers to clear sites for military construction, they created substantial demand for Caterpillar, International Harvester, and other equipment manufacturers. Although wartime restrictions limited near-term profits, these companies' service soon yielded postwar benefits. By partnering with the state during the war, they advanced product development, grew production capacity, and expanded skilled labor. By promoting their contributions to the bulldozer's battlefield triumphs, they sought to enhance their reputations as well. Finally, the public-private partnerships cemented during war helped shape postwar policies that fueled future domestic demand. In all of these ways, for many construction equipment manufacturers, war was not just an interruption to business as usual. It was also a heightened continuation of everyday life that positioned them well for the return to peacetime operations. Recovering the contributions of the construction equipment industry to the World War II "arsenal of democracy" demonstrates the wartime roots of postwar suburban, highway, and urban renewal development.
A Prisoner's Dilemma: Auto Investment Incentives and the Failure to Regulate Them in North America, 1975-1980
The emergence of 1970s auto investment incentives in North America was a consequence of three factors: the fight for investment dollars; competition over the investment of offshore firms; and the industry's continentalization after the 1965 Canada-U.S. auto pact. The latter was galvanized by the successful 1978 Canadian incentive given to Ford Motor for an Ontario plant over Ohio. In an effort to control themselvesofficials in Washington and Canada both deplored incentives as a "mug's game"in 1978 diplomatic efforts were made to end the practice. But these efforts failed. What emerged was a classic prisoner's dilemma: Both sides were unwilling to discontinue incentives, fearful that their opposite could or would not do so. The failure to regulate incentives resulted in three long-term consequences. First, incentives paradoxically weakened the state's ability (on both sides of the border) to regulate MNEs. Second, incentives provide an example of how American capital and American firms were effectively decoupled from U.S. government interests. Finally, the inability of North American states to regulate auto capital flows in the 1970s acted as a precursor to the unregulated globalized capital mobility in the postwar period.
The restructuring of the American political economy in the 1970s, and its impact on business firms, played an important and underexamined role in impoverishing women's claims to the equal opportunity legacy. Focusing on Western Electric, a major American manufacturer and subsidiary supplier to the Bell System, and the sex discrimination litigation brought against the company's Kearny, N.J., plant in 1973, Kyriazi v. Western Electric, this essay examines how slowing productivity, recession, and a decrease in federal contracts attenuated the company's commitment to equal opportunity measures. Jockeying from nonchalance to outright hostility to the sweeping sex discrimination claims in the Kyriazi case, Western Electric executives and managers responded in a manner far removed from the company's leadership on fair employment practices in the 1960s, which had been focused primarily on the plight of unemployed and underemployed black males in declining urban centers. Ultimately, while the lack of interest and gender-blind remaking of equal opportunity policy for women did not become fully fledged until the 1980s, the events at the Western Electric Kearny Works and in the Kyriazi litigation reveal that it had its roots in the economic downturn, and resulting corporate opposition to the liberal state, that first took shape in the 1970s.
Bruce Baker and Barbara Hahn
Regulating the Future: Conflicting Cotton Exchanges and Progressive Legislation
This paper traces the Cotton Futures Act of 1914 back to conflicts between the New York and New Orleans Cotton Exchanges early in the twentieth century. In 1903, a bull pool (organized in New Orleans) cornered the world market in cotton. Its principal actorsWilliam Perry Brown and Franklin Brevard Hayneknew that many New York cotton brokers represented interests that wanted cotton prices low. The bulls also understood the bears' methods: overestimating crop size and thus depressing both spot and futures prices. Brown and Hayne took advantage of short crop years to squeeze the bears, making millions of dollars in the process. Yet crop prices relied not only on supply and demand; they depended as much on grades and information. Pricing the different grades in different ways in New York and New Orleans led each Cotton Exchange to different market mechanisms. In the end, the 1914 Cotton Futures Act made New York policies illegal and thus validated New Orleans practices. Using actor-network theory from science and technology studies and newspapers, government documents, and Brown's unprocessed manuscripts, we trace the roots of legislation to conflicting business practices that had wildly divergent effects on commodity prices.
Spain emerged from the Civil War with formidable economic problems. They were caused by military destruction and foreign condemnation and especially by the establishment of an autarkic system, in which the victorious Francoist side followed the political and economic path of other European fascist regimes. Despite these legal restrictions, many foreign entrepreneurs and multinationals continued to seek out and exploit both new and old relationships in Spain, usually in association with the state-owned Instituto Nacional de Industria (INI). This foreign support was a major factor in ending Spain's international isolation, increasing confidence in the Spanish economy and removing obstacles for the growth of the 1960s. The purpose of this paper is to analyze the collaboration between French firms and the INI in the early Franco era, identifying the main enterprises, agreements and results. We assert that foreign assistance to Spain was present during the autarky period and highlight the continuity of the collaboration between Spain and France. Therefore, we defend multinationals' flexibility in adapting themselves to a hostile environment, especially across political and economic local networks.
An important tenet of a burgeoning "law and finance" literature is that stock market development is contingent upon corporate law offering ample protection to shareholders. This paper addresses this point, using as its departure point developments occurring in the United States between 1930 and 1970. We show that, contrary to what the law and finance literature would predict, the United States during this period and throughout the twentieth century generally lacked corporate law that provided extensive rights to shareholders. We also point out that while federal securities legislation introduced in the mid-1930s bolstered investor protection, reform did not energize the stock market in the manner implied by law and finance analysis.
Henry Ford and the Inkster Project: Welfare Capitalism in Depression-Era Detroit
Historically, the Great Depression has been regarded as a time when welfare capitalism was in decline. Yet Henry Ford launched his Inkster Project in 1931 to provide private welfare for black workers and their families during desperate times. He did so at a point when the Ford Motor Company was severely in the red and after having abandoned its Five-Dollar Day, profit-sharing plan during the 1920s for less costly means of controlling its workers. Why did Ford chose the Depression to revive welfare capitalism? The Inkster Project has been treated as an example of Ford's philanthropy at its purest, with the caveat that the project was a valuable insurance policy against incursions by union activists. I argue the Ford's motives were more complicated. Early in 1931, Henry Ford and Frank Murphy, the mayor of Detroit, were engaged in a showdown over the proper approach for providing relief to destitute citizens during hard times. Murphy's reelection campaign in November 1931 was, in part, a referendum on welfare capitalism versus the welfare state. Within days of Mayor Murphy's reelection, Ford showcased his answer to public relief in the form of the private-sector provisions provided by the Inkster Project.
Constraints, Opportunities, and the Decision to Pursue Business Ownership: Analysis of Industry Choice among African American Owners of Small Businesses
The choice between wage work and being a small business owner is shaped by constraints and opportunities. In the case of minorities, historical understanding of why the entrepreneurial path is chosen is muddled by disagreement over the relative importance of constraints pushing workers down the entrepreneurial path, versus opportunities pulling entrants into firm ownership. This study examines a natural experiment: in the late 1960s/early 1970s, specific constraints historically limiting entrepreneurial alternatives for minorities changed dramatically. Findings indicate that reduced constraints had little impact upon entry rates, but the types of businesses formed changed substantially. Economists view the decision to enter into business ownership as an exercise in freedom of choice made on the basis of one's preferences. What they often fail to appreciate is that entry decisions are made in specific socio-economic-political contexts and that changes in the prevailing context alter entry decisions. Genuine freedom of choice is achieved by alleviating barriers, thus widening the options available to aspiring entrepreneurs. Faced with fewer constraints, blacks since the 1960s have often chosen to abandon lines of business offering low remuneration, choosing instead to enter into higher yielding fields where firm creation requires investment of capital by owners possessing considerable expertise.
Betsy A. Beasley
A New South and a New City: Race and Rural Modernization in Soul City, North Carolina, 1969-1980
In 1969, Floyd McKissick purchased a former plantation in rural North Carolina with the support of the U.S. Department of Housing and Urban Development. McKissick, a veteran civil rights leader, intended the land to be the location of a new towndubbed Soul Citythat would foster black empowerment and economic development. Joining forces with President Nixon, McKissick vowed to incorporate rural African Americans into American affluence and succeeded in bringing industrial infrastructure to the region. Remarkably, local white eliteshistorically the greatest opponents of any federal project that they did not directly controlcame to support the project. When a coalition led by Jesse Helms attacked the project at the end of the decade, many local white residents mobilized alongside African Americans to defend Soul City. Yet opponents succeeded in ending federal support for the project in 1979. This paper moves beyond dismissals of Soul City as a utopian failure, an example of late 1960s optimism and ill-fated ambition. Instead, I argue that McKissick was able to push both the right and the left to support a state-sponsored economic development project with overt civil rights aims, suggesting that the 1970s held greater political possibilities than we often acknowledge.
In this essay, I chart the relationship between Enron's Government Affairs Department and the U.S. Department of Energy while Bill Clinton was in office. Though Enron had been used to Republican administrations sympathetic to issues such as domestic natural gas deregulation, the company's Government Affairs Department quickly found common ground with Clinton's team on the policies of globalization and trade liberalization. By looking at materials such as Enron Business and correspondence between Enron executives and the Department of Energy from the 1990s, I argue that Enron attempted to position itself as a part of the "Washington consensus" and as a partner with the state in advancing economic globalization.
By the 1960s, in Britain's growing, mildly inflationary economy, with rising living standards and asset prices, affluence was visibly trickling down the social scale. But the majority of wage earners did not hold bank accounts. The large commercial banks, which dominated the country's payments system, were perceived as conservative and unadventurous institutions, the result of constraints on competition imposed by the rules of their "cartel" and government restrictions for monetary policy purposes. Britain's Post Office already had significant involvement in financial services through the long-established and conservatively run Post Office Savings Bank, which held a large share of the nation's savings. In 1968 the Post Office opened the technically advanced National Giro to provide a cashless money transfer system for retail and business customers as an alternative to the commercial banks' traditional check-clearing system. In this paper, we examine the Post Office's apparent failure to exploit the opportunity to create a single "working-class bank" from these two institutions. We conclude that its decision-making was influenced by its (mis-)understanding of the market for basic retail banking services and institutional, technological, and political obstacles.
Fahad Ahmad Bishara
A Malleable Instrument: Reading Writing in the Indian Ocean
When Indian Ocean merchants contracted a debt, they wrote it down on paper. This ostensibly simple practice had broad and complex implications. On its own, it questions the widespread presumption that merchants of that time and region trusted one another on the basis of a shared culture, religion, or locality, and that they were content enough with informal agreements. Indeed, what emerges from the documentary evidence is that Indian Ocean commercial societies were highly documentary in their inclinations. Almost every transaction, from high-profile customs forms to workaday loans, went recorded, leaving historians with a treasure trove of mundane legal documents scattered around the entire region. In my paper, I introduce these deeds to the study of economic life in the Indian Ocean. When seen through the prism of the deed, what emerges is a commercial world structured not by trust, but by debt and obligation. In this world, virtually every economic actor in every port from Bombay to Zanzibar was to some degree enmeshed in crisscrossing webs of debt. Through debt, Indian Ocean economic actors forged long chains of obligationchains that stretched across deserts, oceans, and jungles, while remaining firmly grounded in law. By focusing my view on and around the commercial deed, I explore the sinews of commercial life in the Indian Ocean, moving along the frontier between a world of obligation on the one hand and a long genealogy of Islamic commercial jurisprudence on the other. In doing so, I engage with ongoing debates surrounding trust and transnational commercial exchange, while suggesting how historians can begin to write a textured legal history of economic life in the Indian Ocean.
"A Group of Newark Women on Welfare Have Found a Novel Way to Cut Food CostsThey've Opened Their Own Grocery Store"
In 1967, black consumers in Newark, New Jersey, were tired of paying high prices for inferior products, having to buy on credit, pay outrageous interest rates, and continue to be stuck in a cycle of debt. The frustrations of female welfare clients resulted in them forming a buying club and operating a cooperative, not-for-profit store. By operating this cooperative store, these women constructed a critique of the state for failing to adequately provide not only for welfare recipients, but also for the black community as a whole. They were also critical of the exploitative business culture that capitalism allowed. These welfare clients were making a statement: that in the age of mass consumption, they had the right to consume in a fair and free market. If the government and enterprises would not facilitate this, they would make it happen themselves. This buying club and cooperative store was one way these women sought to meet the needs of poor blacks in the city, and make a step toward full economic citizenship. The operation of this cooperative store shows how the ideologies of self-help, self-determination, and community development that thrived in the Black Power era were pragmatically applied to the lives of everyday people.
David C. Brock
An Existential Entrepreneur: The U.S. Military and Microcircuitry, 1940 to 1965
From World War II through the High Cold War, the U.S. military responded to existential threats posed by electronics through activist entrepreneurship. Military planners and leadership determined that electronic systems were essential to fighting World War II and to waging the strategic military competitions that defined the High Cold War. Within the logic of electronics technology itself, military thought-leaders identified a number of roadblocks to the development of electronics to meet their needs: assembly of complex circuits, circuit and component robustness and reliability, manufacturing cost, as well as size and weight. In response the U.S. military undertook a continuous program of activist efforts that can best be described as entrepreneurship. It supplied funding for R&D activities at government laboratories and industrial firms, it provided direct funding for the development and deployment of new manufacturing technologies and capabilities in the U.S. electronics industry, and, importantly, it engaged in large-scale market-making for new electronics technologies, acting as a growing, price-insensitive customer for the products for which it funded R&D and manufacturing. This paper presents an overview of U.S. military entrepreneurship in the development of the technology of and industry for transistors, printed circuitry, microcircuits, and the microchip in this period.
This paper compares the policies of nationalization of foreign property in Africa and Latin America during the twentieth century. We find the following two differences between the two continents. First, while many expropriations in Latin America aimed to redistribute income among members of the lower and middle classes, those carried out in Africa were done to redistribute the expropriated properties among members of the domestic elite. Second, African countries not only nationalized foreign multinationals, but also "indigenized" properties of foreign merchants to distribute them among domestic ones. Indigenization did not occur in Latin America. We argue that these differences result from the longevity of nation-states and the need new rulers had to legitimize their power in new nations, and a longer tradition of labor unionism in Latin America in contrast to Africa. We reach our conclusions by using the selectorate theory of political survival as our main theoretical approach.
American Airmail as an Analogy for Commercial Space
The National Advisory Committee for Aeronautics (NACA) and government subsidy of airmail fueled the emerging American air industry. The NACA, an interagency research body, actively surveyed the state of the art to define the most common problems afflicting those who built and operated aircraft, then did the research to solve those problems. Airmail service began in 1918 as a government function, operating at a substantial loss, within the U.S. Army Signal Corps and the Post Office. The structure of the industry shifted dramatically when the Kelly Act of 1925 privatized airmail service and the Air Commerce Act of 1926 established a framework for regulating air commerce. This was a time of significant corruption, with the government over-investing $7.5 million per year in air commerce. It was also a time when the NACA introduced the technologies that, by the early 1930s, enabled the "airframe revolution." Government involvement in the early years of airmail is seen by many today as a model for how NASA and the FAA can support an emerging commercial space industry.
The "One-Woman Army": Vivien Kellems, Business and the Tax Resistance Movement
Throughout the twentieth century, few members of the business community have been as consistently and harshly critical of the state as Vivien Kellems (1896-1975). This paper investigates her activity as the chief opponent of the income tax in the mid-1940s-early 1950s United States. An iconic figure among right-wing tax resisters, her example illustrates the ebb and flow of the movement in a period where it remains relatively under-documented by historians. Raised in a religious, middle-class family, she founded her own cable grips company in New York City in 1927 and quickly became rich. As a vocal representative of small businesses and an occasional opponent of larger corporations, she illustrated the diversity of opinions inside this community. Already a staunch Republican but not yet a full-fledged conservative, she had her political opinions and her opposition to taxation distinctly hardened by the frustrating experience of war production. In January 1944, she made herself famous nationwide for the first time by refusing to pay the income tax, a move that provoked widespread outrage. In 1948, she refused to withhold income taxes from her employees' wages, and used the trial that followed to gather political momentum and form a national grassroots movement.
Barbados has had a public electricity service since 1911, provided first by the Barbados Electric Supply Corporation and then its successor, the Barbados Light & Power Co., Ltd. Such a service, starting in the island's capital city, Bridgetown, and moving into the rural areas, has been central the country's development. In this essay I argue that government played a key role in the development of the service, first as facilitator through legislation in the period up to 1950. Then, with the coming of ministerial government and independence, government, in an effort to push its modernization program, placed pressure on the electricity provider to expand its operations and invested in the company. This expansion paved the way for the provision of a sound electricity infrastructure, which secured the successful diversification of the island's economy and the transformation of the society.
Christy Ford Chapin
Insurance Companies and the Hidden Politics of Health Care, 1945 to 1965
Because I will be discussing much of the material originally intended for this paper in my Krooss Presentation, this presentation will instead focus on current implications of the insurance-company model. I argue that an interplay of public and private power caused the health care system to develop around a specific organizational modelthe insurance company model. Understanding this model explains why the U.S. health care system has such high costs and fragmented care. Policymakers structured the recent 2010 Patient Protection and Affordable Care Act around the insurance company model, so I will also offer a few thoughts about how the reforms may unfold.
The Freedom of the Press from Labor: The National War Labor Board, the First Amendment, and the Assertion of Managerial Prerogatives in the United States during the 1940s
During the Second World War, the National War Labor Board (NWLB) had a crucial role in minimizing labor-management strife in the United States and maintaining maximum production in the arsenal of democracy. In exchange for unions' "no-strike" pledge and their acceptance of wage controls, the NWLB mandated various policies that abetted the expansion of union membership. One of the most contentious of these pro-labor measures was the insistence of the NWLB on the inclusion of maintenance of membership clauses into labor contracts in industries deemed essential to the war effort, a category that included the publishers of newspapers and news magazines. Some publishers with employees represented by the Newspaper Guild, a CIO-affiliated union of journalists and other white-collar workers, resisted NWLB moves to extend this policy into the print media. Prominent media enterprises such as the New York Times and Time Inc. argued that the NWLB directives violated the First Amendment guarantees of freedom of the press. Appropriating a constitutional right of individual American citizens as a right of corporations, they insinuated that management would lose editorial control over media content if journalists were required to remain members of the Guild in good standing as a condition of continued employment.
Creating the "Therapeutic Orphan": Pediatric Pharmaceutical Policy in the United States, 1933-1979
In 1972, pediatrician Harry Shirkey's frustration boiled over. The nation's leading advocate for stronger pediatric drug regulation felt stymied in his long-term goal of assuring that drugs used in children were safe and effective. He raised a provocative question: "Was it intended that infants and children be singled out for neglect when two major pieces of twentieth-century drug legislation, one in 1938 and one in 1962, were enacted?" He argued that it was long past the time when it was considered acceptable for children to languish as "therapeutic orphans," denied their "pharmacological rights" through label disclaimers acknowledging the lack of pediatric safety and efficacy data. Whose job was it to fix the problem, he asked, industry, pediatricians, or the Food and Drug Administration (FDA)? This paper, part of a larger study on the history of children and pharmaceuticals in the United States since the 1930s, traces negotiations among the FDA, Congress, industry, health care providers, and parents in the years between 1933 and 1979 as new drugs poured on the market, the regulatory environment shifted dramatically, and the costs of drug development skyrocketed. It draws on numerous primary sources: FDA records, National Archives; United States Pharmacopeia records and archival holdings at the American Institute for the History of Pharmacy, both in Madison, Wisconsin; the Helen Taussig papers at Johns Hopkins; American Academy of Pediatrics' Committee on Drugs records in Elk Grove, Illinois; and oral histories drawn from industry, FDA, and clinicians. Findings are contextualized in the historiography of twentieth-century children's health care. The narrative is also situated in recent scholarship on the history of pharmaceuticals in the United States, little of which has focused on pediatrics.
Patent Law, Research, and Competitiveness: The German Dye Industry during the German Empire, 1871-1914
Recent studies on the rise of Germany's synthetic dye and pharmaceutical industry usually highlight the impact of beneficial institutional conditions. Most important among them are the enactment of patent laws and a higher education system capable of supplying a huge amount of qualified personnel. According to mainstream business history, market leaders (such as Bayer, BASF, and AGFA) managed especially well to integrate these chemists into their industrial research labs to develop innovative products and processes. Once patented, these processes guaranteed lower production costs, better quality, and even new products (for example, synthetic indigo). With a given consumption function, sales should increase. Applying explorative-descriptive statistics on recently discovered sources from various corporate archives and patent statistics, this study challenges that broadly accepted but empirically unproven thesis. This paper will address two questions. First, to what extent did the different patent acts affect the industrial innovativeness, considering that patents are regarded as a difficult but valid measure to determine innovative outputs? Second, did the establishment of centralized research laboratories cause an increase in innovations, and if yes, when?
Technological Change and the Future of Post Office Communications, 1939-1945
This paper will investigate how technological developments in the British Post Office during the Second World War were the key to securing military victory. The Post Office was, during wartime, the largest government-owned business and the largest single employer of women. Consequently, the Government saw it as central to the war effort. Despite being originally reluctant to experiment with new technology in wartime, the Government was led by its desire for innovation and change to facilitate military victory to change its attitude, helping the Post Office to become a better prepared and more efficient organization for the post-Second World War period. The paper will highlight the debates surrounding the development and experimentation with new technology, especially concerning the costs and practicalities. Primarily, this paper will explore the debates within the Post Office pertaining to the practicalities of introducing new technology for wartime communications, and will show how the Post Office overcame its reservations about the suitability and practicality of new technology, successfully persuading the Treasury to provide the additional finance.
Commercial Republicanism: Merchant Thought on the Relationship between Business and Government in the Late Nineteenth-Century United States
In this paper I analyze the outlines of a particular vision of the relationship of business and government developed by the nineteenth-century merchants who created the National Board of Trade (NBOT), the first major national association of organized businessmen in the United States. This vision, what I refer to as commercial republicanism, sought to create a clearly defined responsibility for merchants in guiding the economic policies at all levels of government in pursuit of an idealized unity of interests following the Civil War. In doing so, merchants argued for a contrast between "responsible capital" and the rapaciousness of monopolistic businessmen and offered the NBOT as a representative body well-designed to work responsibly with government in developing commercial legislation that would combat sectional and economic factionalism and lead the country to prosperity.
Race and Cancer in the Steel Industry: The Battle over the OSHA Coke Oven Emission Standard, and Its Curious Conclusion
This paper examines public-health measures to control employee exposure to the carcinogenic hazards of making coke, the steelmaking fuel produced by roasting coal, in the United States. It centers on the promulgation of the federal coke oven emission standard in 1976 and the forces that led steelmakers to accept this rule. Making coke was always a nasty affair. Accordingly, management recruited workers with few or no employment alternatives. Initially, fresh immigrants from Eastern and Central Europe tended the ovens. By the 1920s, the workforce was predominantly African American. Unlike other entrants into steel employment, African Americans could not use the internal labor markets of large steel firms to escape to less dangerous and generally more desirable positions. The coke plant remained a job ghetto for decades. Coke oven emissions cause cancer of the lungs and other sites. Awareness of this association spread slowly in the United States and eventually became undeniable for corporate medical directors and others in positions of responsibility. Authoritative epidemiological findings that coke workers in general and black coke workers in particular had extremely high mortality from lung cancer led the Occupational Safety and Health Administration to set a relatively stringent limit on exposure in 1976. My argument is that the steel industry's acceptance of this remedial measure, a breakthrough in protection for workers of color, depended on an unusual combination of external pressures and self-interested incentives. The project draws primarily on the archives of the United Steelworkers (Penn State), including the records of its Health and Safety Department and those of the local union at US Steel's main coke works. I also use the OSHA records (National Archives), the American Iron and Steel Institute records (Hagley), and numerous published primary sources.
Julius Rosenwald: Retail Merchant and Wholesale Philanthropist
Julius Rosenwald's name is today no longer widely recognized, but during his lifetime he was revered as the successful president of Sears, Roebuck, one of the country's largest and most successful commercial enterprises, and as a philanthropist of unusual vision and generosity. After a wise investment in a small, unknown mail order company netted him a fortune, Rosenwald gave serious consideration to how best to use that wealth to benefit his community. He began with organizations that assisted his fellow Jews but quickly moved beyond that to a wider sense of community and a commitment to help African Americans. In 1911 Rosenwald met black educator Booker T. Washington and found in him an able and congenial colleague. Together, they created a plan to assist small rural communities in the South in building schoolhouses for the drastically underserved African American children there. The five thousand schools, teachers' homes, libraries, and shop buildings in fifteen states that resulted were financed as well by state public school systems. The conscientious attention to detail and the ability to trust colleagues that had served Rosenwald so well as a business owner combined with his commitment to civic engagement and his sense of identification with a despised minority to make him an unusually successful philanthropist.
Economic Rationality and State-Owned Companies in Nazi Germany: The Forma- tion of the Reichswerke "Hermann Göring"
In this paper I analyze the formation of the Reichswerke "Hermann Göring," the most important state holding company in Nazi Germany. The Reichswerke were founded in 1937 as a result of the preceding conflict between private steel producers and the economic authorities. Hermann Göring, Commissioner for the Four-Year Plan, demanded the expansion of domestic iron and steel production. Since this plan was associated with excessive risks, the private companies refused to invest. As a result, Göring ordered the construction of state-controlled iron and steel works. In the literature, the formation of the Reichswerke is often used as an example for economic irrationality in the Third Reich. By comparing the economic interests of private steel producers with the strategic goals of the regime, I show that it was rational. Furthermore, scholars interpret this event as a turning point that indicated the beginning of an increasing suppression of private business in favor of state-controlled companies. I argue in this paper that the formation of the Reichswerke was an exception. In general, the regime cooperated with private business in implementing the economic program. But in this case a cooperative solution had to fail because of widely diverging interests.
This presentation focuses on the strategy adopted by Nestlé in Japan between the establishment of a branch at Yokohama in 1913 and the end of World War II. It highlights the difficulties encountered by the firm in its attempts to open up and operate production facilities due to strong opposition from local condensed milk makers, supported by the state. Eventually, in 1934, Nestlé opened a factory by founding an incorporated company, ARKK, all of whose shareholders were Japanese working for Nestlé. This particular organization, with a Japanese company producing condensed milk and a Swiss company selling it, can be explained by the double necessity to hide the foreign ownership of the plant, on the one hand, and to use at the same time the foreign character of the brand ("Nestlé," "Anglo-Swiss," etc.) toward consumers, on the other hand. Although the war drastically curtailed the activities of both Nestlé Japan and ARKK, the organizational facilities set up during the interwar period provided a springboard for Nestlé's postwar success in Japan.
The National Recovery Act and Local Struggles for the New Deal Economy
This presentation uses the NRA as a case study to explore the relationship between public power and private control in Chicago and Los Angeles during the New Deal. Shifting the focus away from a contest between national and municipal authority, I emphasize competitions at the local level for control over federal programs. The tension animating local politics during the early New Deal was not debates over federal expansion but was instead the struggle among local elites seeking to maintain private practices and hierarchies in each city's political economynot so much against government interference but against other groups also attempting to use government agencies to gain greater access within privately ordered economic systems. In Chicago, AFL unions and members of the business community enjoyed a cooperative relationship based on an informal system of contracts and agreements. This arrangement allowed an exclusive cohort control over New Deal programs. In Los Angeles, fierce commitment to the open shop coupled with a resurgent labor movement during the decade created a more raucous and open competition for local control of federal programs. As a result, reformers worked to insulate NRA agencies from the city's warring economic factions.
Creative Destruction and Entrepreneurial Obstruction: Cuban Sugar, 1898-1939
In response to the Great Depression, Cuba adopted a crop restriction policy that protected the sugar industry from experiencing a shakeout of inefficient sugar milling capacity. This paper applies a vintage-capital model of creative destruction to test whether the implementation of crop restriction caused an obstruction of the Schumpeterian liquidation process. The test employs discrete-time survival analysis to examine differences in entry, survival, and exit patterns in the favorable institutional environment of the pre-crop-controls period against the unfavorable institutional environment of the crop-controls period. Entry, exit, and survival patterns and production cost estimates give evidence of a thriving technological upgrading in the former period but apparent cessation of upgrading in the latter, with negative long-run consequences on production costs and Cuba's international competitiveness in the global sugar market.
Debating and Regulating Futures Trading in the Fin de Siècle: International Comparisons
Since the 1870s, futures markets at commodity exchanges have been a notable institution all over Europe and North America, and were discussed especially intensely in the 1890s and 1900s. Was this the ultimate form of effective competitive markets, or a device of gambling speculators ruining the economy? While the United States and Germany are often seen as prime examples of pro-market and contra-market capitalism, the arguments, interests, and the majority attitude on both sides of the Atlantic were in fact rather similar. This paper gives an internationally comparative account of the debates and regulatory efforts regarding futures trading, and shows how the views of publicists and lawmakers developed and settled within three to four decades. After an initial focus on corners and gambling laws, the debate shifted toward questions of power and pricing: How did futures trading affect prices? Was the pricing process arbitrary or effective? And to what degree were producers and intermediaries excluded from it? A first wave of U.S. and German legislative efforts in the first early 1890s aimed at the prohibition of futures, but generally and almost everywhere, the focus shifted toward separating detrimental from legitimate futures trading by establishing ever tighter regulation and control over the exchanges.
Arms and the State: American Torpedoes, Intellectual Property Rights, and the Origins of the Military-Industrial Complex before World War I
In keeping with President Eisenhower's Farewell Address, historians generally date the emergence of the military-industrial complex (MIC) to the early Cold War or to World War II. I argue in this paper that the essential dynamics of the MIC actually lie decades earlier, in the pre-World War I period, and that it emerged not from a particular war but from industrialization more broadly. As American torpedo development illustrates, at the heart of the MIC's emergence was a new class of naval technology procured in novel ways. Beginning in the 1880s, naval technology began to be so complex and sophisticated that neither the public nor the private sectors could research and develop (R&D) it on their own. Instead, the public sector began to invest in private-sector R&D. This investment raised new and very difficult intellectual property (IP) rights questions: where both sectors collaborated in the process of invention, which owned the resulting IP rights? Governments acted aggressively to assert their IP rights, going so far as to use anti-espionage legislation to stake their claims. This expansion of government power was precisely the sort of political-economic development that Eisenhower believed to characterize the military-industrial complex and the national security state.
Bernardita Escobar Andrae
Women in Business: Chile from the 1870s to the 1900s
In this paper I study the extent of engagement of women in business activities during the last quarter of the nineteenth century. First, I review the literature concerning the relationship between women's participation in economic activity and levels of economic development. Second, I examine the evolution of female involvement in leading business roles through the study of two different and unexplored data sets collected for this purpose: the trademark registryestablished in Chile in the 1870sand the local business local tax system (Matrícula de Patentes) for Santiago, already in place in the 1870s. The paper confronts the evidence as told by censuses of the time and these data sets. As in recent studies for other countries, this paper finds evidence that contradicts an allegedly decreasing female participation in economic activity.
Alexander J. Field
The Interwar Housing Cycle in the Light of 2001-2011: A Comparative Historical Approach
In this paper I examine the interwar housing cycle in comparison to what transpired in the United States between 2001 and 2011. The 1920s experienced a boom in construction and prolonged retardation in building in the 1930s, resulting in a swing in residential construction's share of GDP and its absolute volume that was larger than what has taken place in the 2000s. In contrast, there was relatively little sustained movement in the real price of housing between 1919 and 1941, and the up and down price movements were remarkably modest, certainly in comparison with more recent experience. I document the higher degree of housing leverage in 2001-2011 and a rate of foreclosure post-2006 that is likely higher than during the 1930s. I conclude that balance sheet problems resulting from a prior residential housing boom pose greater obstacles to recovery today than they did in the interwar period.
Mathieu Floquet and Patrice Laroche
The Impossible Transition from "Absolute Monarchy" toward Industrial Democracy in France: The Experience of Workers' Representatives at Schneider, 1899-1936
Following strikes in the Schneider factories in Le Creusot in 1899, management was forced to satisfy union demands and set up a representative personnel authority, namely, workers' representatives, who would be allowed to resolve conflicts and transmit demands to management. However, the role of the workers' representatives was hijacked by management and rapidly diverted from its objective, leading to the suffocation of unionization at birth. This study seeks to show how the initial establishment of worker participation resulted in weaker unionization overall.
The Supreme Court's 5-4 decision in the Passenger Cases (1849) overturned two northern states' taxes on foreign immigrants. Eight opinions disputed whether destitute trans-Atlantic immigrants arriving in U.S. ports possessed a legal status of "persons" like fugitive slaves fleeing the South, free African Americans residing in the U.S.-Canadian borderlands, and black seamen working on ships entering southern ports. Locating the Passenger Cases within converging Irish Famine immigrant and antislavery crises, I argue that the Court's decision enforced divergent state-federal commerce power regulations that socially and constitutionally "embedded" in northern free states the police power status of "persons" possessing conditional civil rights and liberties. During the mid-nineteenth century, Karl Polanyi affirmed, liberals put forth the idea that markets were autonomous, 'disembedded' entities existing separate from government intervention and policies. According to Polanyi, however, legal and constitutional policies and laws "embedded" civil as well as market relationsincluding particular distributional outcomeswithin society and institutions. Thus, Matthew J. Lindsay said, the "federalization of immigration lawmaking between the first federal Passenger Act of 1819 and Congress's assumption of full administrative control over the landing of immigrants in 1891 was deeply embedded in two epochal historical dynamics: slavery and emancipation, and the industrialization of labor." The embedding of socially conflicted commerce-power questions in the Passenger Cases began in a trans-Atlantic context; the conflict became still more entrenched as slavery and foreign immigrant crises converged within Congress, the states, and lawyers' court-room arguments. As a result of the Court's ambiguous position in the Passenger Cases, each subsequent case became a new litmus test. The Court favored southern slave holders in the notorious 1857 Dred Scott decision; in Ableman v. Booth (1859) it overturned the Wisconsin Supreme Court's reliance on state police powers to defy federal enforcement of the 1850 Fugitive Slave Act. The failure of the Court to agree on a reason for its decision in the Passenger Cases cast southern state slavery laws into a growing shadow of conflicted contestation. Eventually, the constitutional cognitive dissonance inaugurated in the Passenger Cases collapsed when it became clear that free and slave theories of governance could not be sustained in one government, and the South seceded.
This paper, based on our chapter in the forthcoming collection A Special Kind of Business: The Cooperative Movement 1950-2010...and Beyond, edited by Louis Galambos and Franco Amatori, compares and evaluates the business strategies of the British and Swedish consumers' co-operative movements since 1950. Specifically, it chronicles the experience of two key co-operative organizationsthe UK's Co-operative Group (formerly the Co-operative Wholesale Society, CWS) and Sweden's Kooperativa Förbundet (KF)as they faced the challenges of modernization during an era of growing consumer spending power and increased competition from larger, increasingly multinational investor-led retail corporations. We use a cross-national comparison to challenge the common "narrative of decline" often applied to studies of European co-operatives in this period and to explore the impact of internal and external environments on co-operative business strategies.
Judith J. Friedman
A Public-Private Partnership in Town Promotion: Elyria Ohio, 1900-1910
Businessmen in Elyria, Ohio, transformed its economy within a decade. A county seat with a diverse economy in 1900, Elyria became a small city tied to the regional metals industry and the national telephone industry before 1910. Industrialists and bankers formed a Chamber of Commerce in 1899 and set up a committee to attract new industry and negotiate with companies. Companies typically wanted free land or a site fund, sewer connections, paved roads, and housing nearby for workers. City government made decisions on platting, road paving, and sewer connections. The 1900 Councilmen were primarily local merchants. Thus industrialists had to work with small businessmen to get utilities for new firms, to raise money for site funds, and to get housing built. Through the decade, industrialists became more active in city government, and they brought more merchants into the Chamber as officers, as well as members. Elyria added Elyria Iron and Steel, Columbia Steel Works, Fox Furnace (a Cleveland firm making hot-air furnaces), Dean Electric, Garford Automobiles, American Lace, Perry-Fay Company (machine screws) and Worth Manufacturing (clothing). While the Chamber took credit for this growth, only three of the companies were truly brought in from the outside.
The outbreak of the Panic of 1907 occurred following a series of scandalous revelations about the investments of some prominent New York financiers, which triggered widespread runs on trust companies throughout New York City. Trust companies were less regulated and held fewer reserves than commercial banks, and were not members of the New York Clearing House Association (NYCHA). Using newly collected data, this paper investigates the economic consequences of the Panic of 1907 and the regulatory response that followed. The runs on the trust companies are shown to be partly the result of depositors' fears that their trust companies were caught up in a scandal, when in fact they were not. The corporate clients of the trust companies that suffered the worst deposit losses, in turn, performed worse during the years of the crisis and its aftermath. In response, the state increased reserve requirements on trust companies, and they were ultimately admitted into the NYCHA in 1911.
Martha N. Gardner
"Needlessly and Massively Exposed": The FDA, Industry, and the 1972 Ban on Hexachlorophene in Consumer Products
In 1972, the FDA banned the use of the synthetic chemical hexachlorophene in consumer products. An effective and nonabrasive germicide, hexachlorophene had become popular in hospitals as a surgical wash and general cleaner in the 1940s and 1950s. Introduced in 1948, Dial soap was the first consumer product to include hexachlorophene as a killer of the bacteria that makes human perspiration stink, making Dial no. 1 within five years. By the early 1970s, it was an ingredient in over 400 personal care products, from toothpastes to deodorants to feminine hygiene sprays. However, by the late 1960s, concern emerged about its potential risks. Neurological damage topped the list, with animal studies showing clear signs of harm. FDA decision-makers commented on the lack of careful safety and efficacy testing before its initial introduction in the late 1940s. In contrast, the original inventor of hexachlorophene protested the idea that the chemical was unsafe, claiming that the twenty years of its widespread use "established" its "safety." The popularity of the chemical, the dispute over its risks, and the decision-making process in this time of emerging awareness and concern over environmental and drug risks, are the subject of this paper.
"All the Other Devils This Side of Hades": State Regulation of Negro Banks in Jim Crow Mississippi, 1900-1915
As brick and mortar edifices to the initiative, thrift, and ambition of not merely "Negro captains of industry" but of the black community as a whole, early twentieth-century, black-owned banks in Mississippi implicitly declared that blacks couldand wouldsubvert efforts to fetter civil rights and economic progress, especially in the coveted business circles of banking and finance. By 1915, however, black-owned banks were in the crosshairs of zealous state regulators who wanted to strengthen Mississippi's troubled banking system. This presentation explores how Mississippi's state banking regulations reflected both high-minded Progressive Era ideals and harsh Jim Crow reality before World War I. It will consider areas of cooperation and conflict among Negro and white bankers in the wake of stricter state regulations, and it will describe how black bankers throughout the state mobilized to address the new challenges presented by the state and the political economy of Jim Crow in the New South.
The "Appearance of Corruption" and "Pinstriped Crooks": Narratives of the Enron Scandal in 2002 Regulatory Reforms
Two major pieces of legislation were enacted in 2002 purportedly in response to the Enron collapse: the McCain-Feingold Bipartisan Campaign Reform Act and the Sarbanes-Oxley Act for Corporate Accountability. This was one of many occasions in legislative history when an incident invoked as proof of broader problemshere, in campaign finance and in corporate financial disclosures, respectivelypaved the way for pre-existing reform initiatives. In this regard, Enron became less salient as a corporate bankruptcy and more salient as a political scandal. I argue in this paper that certain narratives of Enron's collapse, deliberately crafted toward specific political ends, led to avowals in Congress that McCain-Feingold and Sarbanes-Oxley could prevent a "repeat performance." I also explore the 2002 laws' significance (or lack thereof) for those who felt Enron signified that big business threatened the fair functioning of markets and democratic politics. I conclude by exploring how the 2010 changes to relevant law, in the Dodd-Frank financial reform bill and the Citizens United v. FEC decision, suggest continuities and differences in approaches to regulation between the "Enron era" of accounting scandals and current debates about what caused, and how to recover from, the recent financial crisis.
The Federal Housing Administration: Did It Really Favor the Suburbs?
There is a near universal consensus among historians of post-World War II America that the Federal Housing Administration (FHA) was central in shaping the modern American landscape. Its putative anti-urban bias is used to explain both the rise of white, middle-class suburbia and the decline of increasingly impoverished and increasingly black central cities. This paper will show that this claim is based on two fundamental misunderstandings. One is the absence of any comparison of FHA mortgages with the rest of the private housing market. When this comparison is performed, the result is almost the polar opposite to that usually posited. The FHA tended to favor multifamily housing relative to single-family, central city developments relative to suburban, and its loans to white and nonwhite households largely mimicked the rest of the market. Second, a singular focus on the FHA's Section 203 guarantee program for single family homes has ignored the myriad other programs at the FHA, from multifamily rental housing to home repair loans, which disproportionally benefited cities and existing neighborhoods and which constituted large portions of all FHA loans. This paper shows that far from creating contemporary suburbia, the FHA struggled vigorously against its rise.
This paper challenges the current scholarly consensus about how the U.S. pharmaceutical industry acquired technological competences during the interwar period. First, I compare data on R&D inputs and outputs for the leading U.S. and German firms throughout the 1920s and 1930s, and conclude that German firms retained a strong technological leadership through until the 1940s. Second, I examine the significance of the industry R&D laboratories in the United States by examining the critical case study of Merck. George F. Merck opened the Merck Institute of Therapeutic Research in 1932 in New Jersey with great publicity, highlighting how this would transform the research potential of the U.S. industry. The paper, however, shows that Merck had a very different agenda, wanting to import technology developed by Merck's former parent company, E. Merck of Darmstadt. After World War 1, George W. Merck was allowed to reacquire the U.S. business after it had been sequestrated by the U.S. government. A key condition of this repurchase was, however, that the U.S. Merck had to forego any commercial relationship with the former German parent. Given that E. Merck was the source of all new technological developments, this presented a significant problem for the U.S. company. While U.S. Merck promoted its New Jersey research laboratories, in reality the company's growing technological capabilities arose from a large and systematic transfer of German products and know-how to the U.S. business during the 1930s under the terms of a treaty between the two companies. The paper outlines this transfer of technology and its implications for both the current interpretation of the origins of research capabilities in the U.S. industry and its subsequent post-1940 success.
Whig Fables of Corporatization, 1776-1914
Incorporations by special act and general ones were standardized and cheapened, as state revenues from privileged incorporationsenthusiastically promoted by British monarchs and early U.S. political eliteswere constrained. UK politicians moved faster, cheaply conferring privileged corporate status on scalable projects and those requiring eminent domain, extensively tolerating unauthorized companies, and thus facilitating levels of capital accumulation by companies higher than in the United States. Corporatization in the latter overtook leading continental nations in the 1830s, but did not match the UK's corporate capital/GDP ratio until the twentieth century. Parliament routinely required extensive shareholder protections in statutory corporations, most of whose shares were publicly subscribed and traded. Moreover, among the (laxly regulated and after mid-century more numerous) generically registered companies, the larger ones listing on the London Stock Exchange emulated them. This voluntary flight to the top fits libertarian models of rational investor/manager free contracting, but contrasts with the corporate flight to the New Jersey/Delaware bottom, criticized by American jurists. Thus by 1914 the United States had less than 5% of the world's companies quoted on open, transparent stock exchanges but more than half of the world's closed corporations.
In the 1870s and 1880s legislation and court rulings combined to make the wages of a head of household almost completely exempt from garnishment in Illinois. Yet by the 1930s, Illinois was regarded as one the states where it was easiest for a creditor to claim a large share of a debtor's wages. We argue that the driving force behind the evolution of garnishment and wage assignment in Illinois was the conflict between two groups of business people: large employers and businesses that supplied credit to wage earners. Large employers regarded garnishment and wage assignment as costly nuisances and sought to restrict their use. Businesses that provided credit to wage earners regarded garnishment and wage assignment as important tools and sought to minimize restrictions on their use. Each group pursued change through legislation, through the judiciary, and through private contracting. Because the conflict between large employers and businesses that provided credit was meditated through the political and legal systems, the outcomes were also shaped by the influence of other interest groups and by the ideologies of judges. By the 1930s, this combination of forces left Illinois with a relatively moderate garnishment law but virtually unrestricted use of wage assignment.
Industrial Mobilization of State-Owned Enterprise: U.S. Navy Yards during the New Deal and World War II
Though state-controlled enterprise is a bit of an anomaly in American economic history, industrial plants owned and operated by the federal government played an especially important role in sectors related to national defense. Key among these was warship construction, where navy yards produced high-performance weapons platforms for the American fleet since its inception. Their significance for the creation and maintenance of American seapower proliferated in World War II, when the U.S. navy became the world's largest employer of industrial labor and built some of the most sophisticated combatants of the American fleet. The navy's reliance on state-controlled enterprise calls into question the validity of conventional interpretations of industrial mobilization that focus on the conversion of civilian industries to military production. The paper argues that the groundwork for navy yard shipbuilding in World War II was laid during the New Deal, when the Roosevelt administration expanded the navy yards in response to the cartelization of naval shipbuilding, creating a major industrial asset for World War II.
To Regulate or Not to Regulate: Money Market Mutual Funds and the Soul of the New Deal System of Housing Finance, 1975-1982
In this paper, I argue that the debate over the regulation of money market mutual funds in the mid-1970s to early 1980s revealed competing visions of the future of housing finance. One side sought to preserve the New Deal system of low-cost funds raised for mortgage investment by local depository institutions, while the other envisioned household savings and investment capital freely flowing to the highest returns, without special effort to allocate credit for housing. I further argue that regulators' decision not to limit money market funds when they first considered such regulations in 1976 constrained policymakers' options in responding to the thrift crisis of the early 1980s.
A substantial literature documents the importance of effective branding to business success. However, much of this work focuses on private companies operating in a limited range of industries, or on internal national relationships between manufacturers and politicians. We develop these themes by emphasizing the importance of external relations and external markets. This paper focuses on state promotion of national branding schemes in agriculture during the interwar years. We employ a case study that examines the success of Danish bacon exports to Britain during the interwar years to advance several arguments. First, an asymmetric relationship existed between these countries: as the biggest export market for Danish bacon, Britain was crucial to the fortunes of the Danish industry, but the converse did not hold, because Britain could increase its supplies from Ireland, Canada, Holland, and the United States. Second, although Britain sought to increase its domestic supply of bacon via state promotion of national branding and marketing schemes, these were abject failures. Throughout the interwar period British consumers overwhelmingly preferred Danish to British bacon. How can this continued preference for Danish bacon be explained? We argue that that the Danish industry benefitted from a high degree of state regulation, which guaranteed high minimum levels of quality throughout the supply chain; a high level of co-operation between producers and the state, and, most important, accurate information about British tastes and preferences for bacon. Taken together, these factors gave Danish producers an invaluable and insurmountable lead enshrined in their state-promoted brands. In contrast, we show that British efforts were uncoordinated and de-regulated, with the consequence that British farmers had little, if any, financial incentive to produce "bacon pigs" of the desired quality. Consequently, state efforts to promote national branding and marketing schemes for baconand related productswere ineffectual. The paper utilizes a diverse range of official archival data in Britain and Denmark, supplemented by trade journal reports and newspaper commentary. Additionally, we construct a new price series to establish changes in the relative competitiveness of Danish and UK bacon.
"A serious handicap upon the defective workman in search of employment": Law, Liability, and Disability in the Early Twentieth-Century United States
In this paper I argue that legal decisions in lawsuits brought by people with disabilities helped create incentives for employers to practice discriminatory hiring against people with disabilities. Workers compensation legislation, responding to an epidemic of workplace accidents, increased employers' liability for employees' workplace injuries. Despite disabled people's widespread workforce participation, these laws presumed able-bodied employees. This gap between law and economic practice made injuries to disabled people legally ambiguous, resulting in numerous lawsuits by disabled workers who suffered further disabling injuries. Many lawsuits dealt in particular with already one-eyed workers who suffered eye injuries. Courts debated whether workers blinded by the loss of one eye should be compensated for lost quantity of body (losing one eye) or lost capacity (losing all sight). Over time courts increasingly held employers liable for total post-injury incapacity. Increased injury liability led many employers to stop hiring disabled workers. Under early twentieth-century U.S. workplace injury law, disabled workers either bore greater individual risks of injury or posed a financial risk for employers, which lowered disabled workers' job prospects.
Daniel S. Holt
The Stock Market and the States: Securities Regulation, 1907-1933
In this paper, I argue that securities regulation at the state level was a key, but overlooked, component in the institutional development of a broad market in corporate securities in the early twentieth century. I examine the operations of state public service commissions in New York and Wisconsin, which were tasked with regulating the capital issues of electric and gas utilities and street railways. I also discuss securities commissions created under state "blue sky" laws, which targeted securities dealers and high-risk, speculative stock promotions in oil, mining, and upstart industrial ventures. In both cases, state regulators were concerned with the issue of watered stock, which they believed masked the value of corporations and encouraged speculation on the part of those least prepared to engage in it. Regulators used their authority to shape the kinds of investments offered to the novice small investor, to suppress speculation, and steer small savers into safe, stable investments. These regulations helped spark, and operated in tension with, financial industry efforts to court small investors and helped contribute to the public legitimacy of the stock market by the 1920s.
Peter James Hudson
Rogue Bankers and Gentlemanly Capitalists: American Foreign Banking, 1890-1913
In this paper I examine the international extension of American banking during the decades before 1913, the year the Federal Reserve Act permitted national banking associations to establish foreign branches. It revisits the histories of and the debates surrounding the formation of two early foreign banking institutions: first, the Pan-American Bank, a never-realized international banking institution that was called for by the delegates of the 1890 Pan-American Financial Conference in Washington, D.C.; second, the International Banking Corporation, chartered in Connecticut in 1902 and its New York affiliate, the American Bank. The paper demonstrates how bankers sought to create a new institutional or organizational form that could operate across the hybrid, plural, and uneven legal environment of international finance. It shows how these institutions found ways around the constraints of both federal and state regulation to establish a foreign presence. And, by unearthing the biographies of the clerks, examiners, and managers sent out into the foreign field, the "rogue bankers" who were the first generation of American international banking personnel, I show how financial intermediation across national borders was facilitated and brokered by a small network "on the ground." The experiences of these rogue bankers and of those early U.S. international financial institutions, I argue, would prove critical to the wave of foreign banking expansion that occurred following 1913.
Jill S. Huerta
Crises in the Making: The Regulation and Deregulation of the U.S. S&L Industry
In analyzing the savings and loan collapse of the 1980s, this paper argues that a tendency to focus on high-profile criminal cases has distracted us from the most important aspects of this story, namely the failure of regulation. The New Deal financial regulatory structure helped savings and loans become the largest writers of home mortgages in the United States by the 1950s. However, by the 1970s, changes in the global economy and corresponding adjustments to U.S. financial markets had made it impossible for savings and loan to succeed under the old framework. The need for regulatory adjustment was dire, but the difficulty in securing compromises from such a large number of interested parties meant this process would be long and flawed. Both the Carter and Reagan administrations saw deregulation as the cure, but it was no panacea. To the contrary, the absence of regulation encouraged risky investments and gambling in addition to fraud. Surprisingly, the savings and loan collapse did not discourage supporters of deregulation. Instead, deregulation picked up momentum and spread until most of the financial regulation put in place by the New Deal had been undone, setting the stage for the financial crisis of 2008.
Sitting on the Lid: The National Association of Manufacturers and the Legislative Branch, 1902-1948
The National Association of Manufactures (NAM) is well known for its pro-free enterprise, anti-statist rhetoric. The noisiness of that rhetoric, however, has in part obscured the fact that the NAM never objected to state power per se; rather, its attitude toward state power depended on who controlled that power and in whose behalf it was exercised. The bulk of the paper focuses on the early years of the twentieth century. It examines the major areas of government policy that the NAM engaged with in this period, and concludes that in the majority of cases the NAM promoted the expansion rather than the limitation of state power. The paper then analyzes the NAM's early twentieth-century critique of state power, and finds that it was almost exclusively directed at legislatures and their vulnerability to democratic demands. The NAM's rhetorical condemnation of government "interference" became broader during the New Deal and postwar years, and began to particularly target the federal government. I suggest in this paper that this rhetorical shift reflected a strategic cultivation of anti-statist sentiment in a period when the Association increasingly doubted its ability to decisively influence the state.
Low Taxes, High Times? Businessmen, Andrew W. Mellon, and Tax Policy, 1920-1932
From 1920 to 1932, businessmen took an active role in the shaping of federal tax policy. The Mellon Plan of November 1923 was supported by professional organizations (Chamber of Commerce, U.S. Chamber of Commerce, the Association of Credit Men, the Tax League of America, the New York Board of Trade, and the National Association of Retail Grocers) and corporations, which sent thousands of letters and petitions to their congressmen. The petitions were sponsored by Chambers of Commerce and local chapters of service clubs such as the Rotary, Kiwanis, and Lions Clubs. Most were pre-printed and circulated throughout the country, and urged Congressmen "to take a persistent and aggressive stand for lower Federal taxes and to support a tax reduction plan." However, if consensus prevailed in the first years of the 1920s, businessmen were divided along sectorial lines and interests. In Southern and Midwestern states, small businessmen joined tax clubs to advocate for a "full Mellon plan" and the repeal of all war taxes. Some sectors (oil, lumber, paper, chemicals) strongly fueled the movement of tax resistance. However, internationalist corporations were more interested in the scientific and rational association proposed by the Commerce Department in order to increase their competitiveness in foreign markets. Andrew Mellon was caught between two antagonistic interests and sought to build a new fiscal consensus. The Great Depression put an end to such compromise and increased the divide between sectors and companies on the issue of federal taxation.
The Political Economy of Foreign Direct Investment: Constructing Economic Interests and Policy Preferences in Post-War India and Brazil
This paper explores the tension between materialist and constructivist theories by contrasting the evolution of FDI policy preferences in India and Brazil. It argues that economic actors' policy preferences cannot be fully explained by rational calculation or structural position; "preference formation" is a contested process of social interaction between firms and the government. The paper examines post-World War II industrial development efforts to show that, despite having similar development goals and facing similar financial and technological challenges in promoting manufacturing industry, and confronting the same global economic environment (especially the aggressive post-war expansion of U.S. multinational firms), these countries adopted different approaches to regulating foreign capital. These differences emerged from variation in beliefs about the role of foreign versus domestic firms in development, where Indian policymakers and industrialists' skepticism toward FDI stands in contrast to the relative openness of their Brazilian counterparts. The implications are reflected in patterns of ownership and control in automobiles and pharmaceuticals, two industries that were heavily promoted as the foundation of post-war industrialization. Indian industry emerged largely controlled by domestic private capital and the state, while in Brazil multinational firms were dominant, a pattern that largely persists to this day. The paper highlights the social and political origins of preferences and the role of business politics in shaping policy and market outcomes.
Regulating and Re-regulating the Automobile: The Challenge of Emissions
In 1970 Phil Myers, president of the Society for Automotive Engineers, wrote that individual consumers would not choose to spend more money for cleaner cars, and therefore government regulation had to shape the market for the common good. Myers cast himself as a spokesman for industry, speaking in favor of the 1970 Clean Air Act. For Myers, the new standards of the 1970s would incentivize a new approach to the technology of emissions control. Rather than considering emissions control a problem of capturing harmful exhaust gases, auto manufacturers began to reconsider the nature of the combustion process and whether optimizing combustion might be combined with exhaust gas capture to produce a far cleaner automobile than engineers imagined possible. This was the message of Myers' address in 1970engineers should oppose any hard standard on emissions because technological innovations would make feasible ever higher standards. Myers was clear about the role of government: to shape, by constraint, consumer choice. Governments had to manage markets to facilitate technological development. Myers saw the automobile as an "emerging technology," whose continued existence (but changing form) depended on technological innovation, government regulation, and consumers.
When Uncle Sam Partnered with Ronald McDonald: How the Federal Government Helped the Fast Food Industry Expand into America's Inner Cities
This paper considers the role of the federal government in the expansion of the fast food industry into America's inner cities since the 1960s. In the mid-to-late 1960s, race riots took place in many cities, including Los Angeles, Detroit, Washington, D.C., Baltimore, and Newark. During and after the urban unrest, activists called for economic development in African American communities. In response, federal policymakers sought solutions to high unemployment among young African Americans, as well as low minority business ownership. Some of their well-intentioned solutions included supporting fast food franchises in inner cities, particularly if the restaurants could create jobs and more minority business owners. Corporate fast food franchisors had also been looking to expand into inner cities and other untested markets, so they seized this opportunity at government-subsidized expansion. But today, many inner cities are saturated with fast food restaurantsa circumstance that some health advocates and researchers believe contributes to disproportionately high rates of obesity among the low-income minority residents of the these communities.
Japanese Imperialism in Manchuria: An Approach to the Role of Japanese Currencies in Soybean Marketing during the 1920s
This essay aims to broaden discussion on the role of Japanese currencies in Manchuria during the 1920s, by describing its function in the process of soybeans marketing. Manchuria adopted a multiple monetary system considered "confusing" and often "chaotic" by foreigners. This monetary system was composed of a variety of currencies, including foreign, national, regional, and local levels, based on gold, silver, and copper, issued by public and private institutions, as well as by individuals. The Japanese currencies were issued by two banks: the Yokohama Specie Bank (YSB), which issued banknotes based on silver, and the Bank of Chosen with banknotes backed by gold. At first, it seems that the currencies of the monetary system of Manchuria were in conflict with the Japanese currencies issued by the YSB and the Bank of Chosen. However, by analyzing primary statistical data on the exchange rate and the issuance of major currencies published by the South Manchuria Railway Company, one can see that Japanese currencies played a major role in negotiating soybeans between Chinese grain dealers and international traders.
Masters of the Universe After All? Consulting Alumni in Business and Politics
This paper represents a first attempt to gauge the importance of the network of former consultants occupying leading positions both in corporations and government/public administration. This is particularly the case of McKinsey alumni, whose influence has been discussed on an irregular basis in the business press, often in conjunction with scandals like Enron, where CEO Jeff Skilling had previously been a director at McKinsey (and is now serving a prison sentence). But this important phenomenon has yet to receive the appropriate attention in the academic literature. If mentioned at all, it is usually in relationship to the way consultants "market" their servicesthat is, McKinsey alumni are seen as a way build strong relationships with potential clients. There is also an interesting case in which McKinsey hired a high-ranked civil servant as a director in the United Kingdom to gain access to government clients. I start with a brief historical sketch of the development of McKinsey as a management consulting firm and the introduction of its "up-or-out" policy, which is behind the creation of the alumni network. Drawing on publicly available sources, I will then present an overview of the actual extent of this phenomenon, providing some estimates for the overall number of former McKinsey consultants now in business and public roles, and a list of some of those in high-profile positions both in the past and the present, focusing in particular on alumni who have crossed the business-government divide. Next, I will discuss possible interpretations of this phenomenon, drawing on extant frameworks in the relevant literature. These include the possibility that working for a consulting firm is mainly a career accelerator, a kind of MBA squared; the consulting alumni network as a kind of hidden interlocking directorate, spanning countries and sectors as well as the business-government divide and also reaching into academia; or the former consultants as "cosmocrats": a culturallyand ideologicallyhomogenous transnational elite.
Selling Photography to Hitler: Marketing Strategies of Kodak and Agfa in the Third Reich, 1933-1945
The purpose of this paper is to understand how the business enterprises Agfa and Kodak adapted their marketing strategies to the political environment of the interventionist Nazi state. This was a time when many consumption good companies suffered from the state-driven reallocation of resources favoring the armament industry. However, Agfa, the national champion in photographic supplies, as well as the local subsidiary of the U.S.-based world market leader Kodak, expanded their production well into the war. First, this paper challenges mainstream research by arguing that Hitler's armament drive left room for high-quality, non-essential consumer goods such as photographic cameras and film as they fitted the regime's racial consumption policy, as well as its export-oriented economic policy. This allowed Agfa and Kodak to maintain their longstanding growth strategies by only slightly altering their product, pricing, and promotion concepts. Secondly, challenging the varieties of capitalism paradigm, this comparative study shows that despite coming from a competitive market system, Kodak was flexibly able to secure its room to maneuver in the interventionist framework of the Nazi statethe same way as the traditionally cooperative-minded yet increasingly "Americanized" Agfa.
The Invisible Hand: International Paper's Conquest of Ontario, 1920-1930
Historians who have traced relations between "business and the state" in Canada's newsprint industry have drawn practically the same conclusions. The provincial governments that controlled access to the natural resources the pulp and paper makers sought linked arms with them in an effort to build up the strongest possible domestic industry. There are numerous reasons to challenge this interpretive framework, however, and the story of the Ontario government's treatment of the International Paper Company during the 1920s illustrates a few of them. During this period, the Canadian pulp and paper industry was not monolithic, and the various firms competed with each other for fiber and water power resources. In the case of IP in Ontario, the provincial politicians showered the company with largesse, awarding it a remarkably lucrative hydro-electric contract and a veritable treasure trove of pulpwood. This benevolence is noteworthy because Ontario's "domestic" newsprint producers urgently sought the timber that the government repeatedly gave IP. Moreover, IP had long been these producers' greatest competitor and represented the epitome of the "foreign" firm, as it did notand would neveroperate even one ton of newsprint capacity in the province. Recognizing the stealthy manner in which IP operated in Ontario explains why this story has gone unknown for so long.
Chi Man Kwong
Elephants Are Killed for Their Ivory: Shenyang Arsenal and Its Subsidiaries, 1919-1931
The Eastern Three Province Arsenal (Dongsansheng binggongcang), or the Shenyang Arsenal, was one of the largest arsenals in East Asia before the outbreak of the Second World War. With full support of the local authority, which was controlled by the warlord Zhang Zuolin, this state-owned venture emerged from a weapon repair workshop into an industrial complex that could produce more arms than all other arsenals in China combined between 1919 and 1931. Not only providing arms to Zhang Zuolin's Fengtian Army, with its subsidiaries such as the Fengtian Military Food Factory (Fengtian liangmocang) and Fengtian Uniform Factory (Fengtian pifucang), the arsenal helped to create the first modern logistics system of the Chinese army. It also developed its own types of weapon, ending China's complete reliance on imported arms and nurturing a generation of Chinese weapon specialists and military administrators. The development of the arsenal also expanded the state's capacity considerably, as the state was responsible for collecting raw material for the arsenal in Manchuria and from aboard. Although the Shenyang Arsenal had served the Fengtian warlord well, it drained a tremendous amount of resources from Manchuria. Moreover, while it was a means to end China's military dependence on Japan (in terms of arms production), the Arsenal still relied on Japan for raw materials to a large extent. The Arsenal was also seen by the Japanese as a menace, and partly explained the decision of the Kwantung Army to seize the Arsenal. During the Second Sino-Japanese War between 1937 and 1945, the Arsenal became an important asset of the Imperial Japanese Army. More than narrating the history of the Shenyang Arsenal, in this paper I attempt to identify the reasons for the (relative) success of this arsenal and explain its role in the Chinese state in Manchuria. In addition, I evaluate the Arsenal's effectiveness on research and development as well as the quality and quantity of its products.
Pamela Walker Laird
Narratives of Self-Made Men and the State in Antebellum America
In 1832 Henry Clay famously used the phrase "self-made men" in the U.S. Senate while defending the American System and federal support for manufacturing. He praised Kentucky manufacturers as "enterprising and self-made men" who deserved the nation's honors and favors because they had "acquired whatever wealth they possess by patient and diligent labor." In 1817, Congressman and fellow Kentuckian Alney McLean had argued that men "among the lower and middle walks of life ... as to property... who might be styled self-made men" were worthier of election than the "more wealthy" because of their "talents, morality, industry, and integrity." McLean drew upon a centuries-old call to serve and glorify God and community as men's measure, best achieved by building their character and working diligently in their vocations. Whereas McLean lauded "self-made men" for what they could do for the nation, Clay praised such businessmen in order to garner support from the nation. As the young republic debated its course, the meaning of "self-made men" shifted from McLean's sense to Clay's. Recovering the phrase's religious and community-oriented traditions helps to explain how worldly success came to measure men's character and determine their claims on public esteem and state largess.
Corporatist Advertising in Cold War Sweden: War and Peace Time Cooperation between Swedish Advertising Companies and Psychological Defense Authorities, 1954-1975
During the Cold War, neutral Sweden was one of the most militarized countries in the world, and select companies from most major industries were part of the "total defense" and included in war-time planning. The planning, formalized in the early 1960s, not only included the provisions for the companies in the event of war but also gave them special privileges in peace time. In this paper the relationship between the government agencies responsible for psychological defense and civilian advertising companies is analyzed. It is shown that the relationship at least occasionally gave the participating companies advantages when it came to government contracts, both for the military and for other government agencies. The paper also gives an overview of the history and organization of psychological defense and of the advertising organization within the psychological defense authorities. The paper also describes the services that the advertising companies provided and how the contracts were handed out.
Database Panic: The Computerization of Consumer Credit Reporting in the United States
In 1966 a U.S. congressional committee was formed to investigate a proposed federal database that would allow several agencies, including the Internal Revenue Service and the Census Bureau, to share statistical information. The hearings featured grandstanding denunciations of state surveillance and fear-mongering predictions about an Orwellian computer society. The government database was nixed, but the hearings produced a more startling discovery: the American public was already under the surveillance of private-sector databases operated by consumer credit bureaus. In this paper I examine the computerization of American consumer credit bureaus during the mid-1960s and the significant challengesfinancial, technical, and logisticalthat they faced. While many banks and large retailers were quick to adopt computer systems during the early 1960s, credit bureaus were initially left behind. The impetus to automate, however, emerged in 1965 when one firm, Credit Data Corporation (CDC), opened the first computerized bureau in Los Angeles. CDC's entrance into the field immediately touched off a race to computerize among the nation's leading consumer credit reporting organizations.
Italian SOEs performed quite well during the golden age, enhancing the growth potential of manufacturing sectors, fostering the increase of firms' size and heightening productivity levels. In the 1950s and 1960s investments were financed largely through long-term debts, while capitalization plunged periodically, following investment cycles in capital-intensive industries. Nevertheless, constant and robust improvements in productivity allowed sustainable high levels of indebtedness. During the 1970s stagflation altered the overall framework profoundly: macroeconomic shocks hit the cost structure of big businesses, improper political pressures forced SOEs to bail out private poorly performing firms and to increase employment levels, as interest rates increased. Stagflation acted as a powerful stimulus to revise monetary policy models, and the central banking paradigm changed dramatically in the second half of the decade, increasing the cost of money: huge debts became a "financial trap" for low-performing firms. Considering the history of Italian SOEs in a large framework, the paper shows that, under specific circumstances, debts could be assumed as a funding channel when self-financing declined. Focusing on the specific institutional arrangements and macroeconomic policies adopted during the 1970s, it also explains how an adjustment process may fail and makes clear why a successful model turned into a failure.
In 2006 the Chinese government made the promotion of indigenous innovation central to its Medium- and Long-Term Plan for the Development of Science and Technology (2006-2020). This latest stage in China's growth builds on earlier policies that promoted infrastructure investments in China and technology transfer to China from abroad. The dynamism of the Chinese economy can be understood in terms of the combination of these three drivers of economic growth: infrastructure investment, technology transfer, and indigenous innovation. We argue that the foundations for China's growth have been the development and utilization of productive resources by the developmental state and innovative enterprise, working in combination. We outline the theories of the developmental state and innovative enterprise in order to frame the empirical analysis that forms the main body of the paper. We then provide empirical syntheses of research that documents the roles of the state in infrastructure investment and technology transfer, as well as the role of the enterprise in transforming technologies and accessing markets to generate innovation. In particular, we focus on the increasingly important phenomenon of "indigenous innovation" in China, whereby Chinese companies improve upon technology transferred from aboard to become important competitors in Chinese and global product markets.
The Historical Evolution of Trademark Legal Frameworks and Registration in Latin America: The Argentine Experience
While business historians have paid a good deal of attention to the history of brands, less has been written on trademark history and laws. In this paper I intend to study these issues in Latin America, where business-historical interest in branding and trademarks has been negligible at best. To do so, I discuss the evolution of trademark laws and registration frameworks in Argentina until the mid-twentieth century. Argentina boasted one of the highest per-capita registration rates in the Americas, following the United States. In addition, I discuss the relationship between politics and trademark laws and practices, describing the state regulations introduced in the 1920s to mandate the use of a mark of origin (Argentina's Merchandise Identification Act (no. 11,275). The analysis of different regulations also reveals a growing link between economic nationalism and branding, reflecting the role of trademarks in developing economies (characterized by a high level of international marking). Indeed, it may be safe to argue that the period between the 1860s and the 1970s witnessed a transformation in the way in which trademarks were conceived (as property) and used (practices and perceptions). This paper relies on a variety of legal and business records to make up for the fact that there are no prior studies (except from an international trade perspective) and no complete official statistics for the period analyzed
The first aim of this work will be to describe the features of the various stages of development of the international mercury market during the first half of the twentieth century, with emphasis on the characteristics and conditioning factors in each period. Second, we want to analyze the various market agreements that resulted from the worldwide collusive duopoly known as "Mercurio Europeo" based in Lausanne, which came into being in 1928 after a series of agreements between the Spanish and the Italian producers, the effectiveness of the clauses therein, the construction of distribution networks, and the influence that the increase in production had on other mines and on certain technological developments. This research has drawn on unprecedented sources for its preparation, in particular the minutes of Mercurio Europeo deposited in the archives of the Fundación Almadén (Almaden Trust), as well as those of Monte Amiata company Archives (at the Mining Museum in Abbadia S. Salvatore), the IRI Historical Archives in Rome, the Rothschild Archives in London, and the National Archives of the United States (Department of Commerce).
Think before You Ban: American Reactions to the Rise of an Independent Antibiotic Industry in Eastern Europe in the Late 1940s
In early 1946 the United Nations Relief and Rehabilitation Administration (UNRRA), established to aid war-worn countries, offered five complete penicillin plants to be built in Belarus, Czechoslovakia, Poland, Ukraine, and Yugoslavia. Thanks to the UNRRA fellowships, local specialists were trained in Canada. Although most of the equipment reached the target countries, they were not able to launch production of antibiotics, because the U.S. government cut the delivery of some of the key devices. The affected countries launched a diplomatic campaign at the World Health Organization (WHO) forum, demanding that the UNRRA relief program should be continued in spite of the embargo. When these efforts failed, Poland with other countries withdrew from the WHO in 1950, protesting against its inability to solve the tangle. In spite of obstacles the East Europeans pursued efforts to put the factories into operation. Each country approached the problem in its own way. Eventually the restrictions had the opposite effect than the one imagined by the Washington "hawks." In spite of the ban, Poland's first penicillin plant was ready in summer 1949, and within a few years it became an important producer of that medicine, competing in the Western markets.
Debates about the legitimacy of futures trading were omnipresent in the highly integrated world economy of the late nineteenth and early twentieth century. In this paper, we compare those debates in Germany and British India, two countries that were extremely diverse in their economic and political context and in the way they regulated futures trading. Germany was the first country worldwide to ban futures trading in selected commodities, while it remained largely unregulated in British India. Despite the formally different outcomes, we show that the respective debates resembled each other in many ways: in both countries futures exchanges were private organizations controlled by a small and in many ways privileged group of traders. In both countries these minorities were based on social ties and de facto controlled access to futures markets. Both groups were also faced with criticism because they were able to realize profits that a majority of people had no access to. Reviewing the debates we show that the main issue was not the legitimacy of futures trading but rather the distribution conflicts among the various interest groups that were engaged in futures trading.
"It's ugly, but it gets you there": Volkswagen's Advertising Strategy in the United States, 1949-1968
The German automobile manufacturer Volkswagen had multiple reasons for expanding into the United States, ranging from the desire to increase its capacity utilization and foreign currency earnings, to company president Heinrich Nordhoff's interest in the country. Based on research in the VW corporate archive, my paper analyzes VW's advertising strategy for the U.S. market from 1949 to 1968. To survive in the competitive American automobile market, VW had to find its niche and compete against other importers from Europe. Moreover, its small and simple main product, the Beetle, ran counter to the consumer preferences the "Big Three" Detroit automakers encouraged. In 1959, VW hired the American advertising agency Doyle Dane Bernbach to develop national campaigns. The corporate image the agency created for the German company was a crucial factor in VW's breakthrough in the 1960s. In this paper I highlight the importance of advertising as a marketing strategy and illustrate the role of brand images. I will examine how VW utilized the "foreigner factor" and how it dealt with national stereotypes. Finally, I will situate VW's campaigns within the broader history of 1960s automobile advertising in the United States.
Siemens and the Soviet State: A Matter of Trust?
"Communism is Soviet power plus electrification of the whole country," as Lenin famously argued in 1920. Ten years later, at the height of the World Economic Crisis, the Soviet Union became one of Siemens's most important customers. Siemens technology and machinery played a vital role in the first Five-Year Plan. What is even more surprising is that this was not a recent development. The company started negotiating with the Bolsheviks as early as February 1918, barely four months after the October Revolution. Two years later, during the Russian Civil War, Siemens signed its first Soviet business deal. This paper addresses two questions. First, why would one of the largest capitalist companies in Europe start business relations with the Soviet state so shortly after the October Revolution? Second, how can one explain the quantitative development of Siemens's Soviet business? I apply actor-centered institutional theory to answer these questions. I argue that the development of Siemens's Soviet business depended on mutual trust; or rather, that the absence of trust required the intervention of the German government to provide incentives for Siemens to do business with the Soviet state.
Shipbuilding emerged as a major industry in the province of British Columbia during the first half of the twentieth century. The demands of world wars, foreign and coastal trade markets with accompanying port development, government stimulus of industry and manufacturing, as well as a growing commodity-driven regional economy influenced decisions behind construction of ships. Private companies and government procurement officials measured progress in shipbuilding against developments in other leading maritime countries, most particularly the United Kingdom and the United States. Shipbuilding in British Columbia reflected an amalgam of British craft tradition, North American production practice, and the inclinations of individual owners and their workforces. Accordingly, adoption of new technology in this "modern" industry relied on perceived suitability and acceptance. Key areas included the choice between wood and steel construction, longer term infrastructure investments under the Dry Dock Subsidies Act, persistence of riveting versus welding in hull assembly, locally supplied marine engines and complex machinery, and the finishing applied to new construction and conversions. Canada's mid-size west coast shipyards were always hard-pressed to keep abreast of the latest technology in order to maintain any competitive edge and to offset other limitations besetting shipbuilding generally as a viable heavy industry.
In this paper we argue that, because female athletic success implies masculinity, high-achieving female athletes in corporate sports challenged the status quo by throwing women's abilities and limitations into question. However, using General Electric as an example, we suggest that corporations successfully contained any threat posed by the female athlete through demeaning coverage of women's sports and through the planning of events meant to reinforce gender ideals for women, from rolling pin games to field day beauty contests. We also suggest that the same mechanisms used to contain the threat of female athleticism were part of a larger corporate culture that contained the threat of high-achieving women in the workplace, such as GE's female scientists and engineers.
Reassessing "The Loan That Saved Russia": The Hidden Costs of the Imperial Russian Government 5% 1906 Loan
On April 16, 1906, the Russian government signed a contract for a 2.25 billion franc loan that former finance minister and then-prime minister Sergei Witte famously called "the loan that saved Russia." Given that the loan was contracted after Russia's humiliation in the Russo-Japanese War, and after months of unrest during the 1905 Revolution, many historians accept this view in traditional narratives of the Russian Revolution. An examination of correspondence held in London among leading members of the issuing syndicate and with Russian and Western government officials, however, suggests that the 1906 loan had a much more conflicted and complex legacy. Rather than marking an end to the 1905 Revolution, the 1906 loan in many ways exacerbated the problems confronting the tsarist regime by angering and radicalizing domestic opponents of the regime, while also opening new fronts of confrontation between the regime and its opponents internationally. In this sense, the legacy of the 1906 loan stretched far beyond the end of the 1905 Revolution into the events of 1917.
"Communities Must Be Vigilant": The Mixed Results of Grassroots Financial Regulation through the Community Reinvestment Act of 1977
With their focus on the urban crisis, historians of the post-1945 United States often portray the political and economic reconfigurations of the metropolis as a linear march toward the conservative suburbs. In doing so, they have missed the successes of a 1970s urban movement that believed cities could be revitalized with help from American banks. National People's Action, a nationwide, multiracial coalition of working-class urbanites, scored legislative victories that increased the flow of mortgage credit to capital-starved neighborhoods in an effort to rebuild cities. Rejecting urban renewal projects designed by far-away bureaucrats, these reinvestment activists won federal regulations that enlisted financial institutions in resident-initiated, small-scale redevelopmentbuilding homes on vacant lots, renovating old buildings, and rehabbing rental housing.
Emily L. Martz
The State's Assumptions about Mutual Funds: A Corrective History, 1929-1932
Historians and members of the public typically assume that officers within the mutual fund industry have prioritized sales since they created their first funds in 1924. The Securities and Exchange Commission's often cited report on the industry's early operations is largely responsible for this categorization; the report described the industry as one that operated according to a culture of sales, one in which sales dominated the principals' activities. In this paper I correct that perception and demonstrate that the founders of the earliest open-end investment companies (as mutual funds were then called) actually failed to market their companies. Indeed, the society within which some officers lived and worked precluded them from actively selling shares of their fund. Many others created their company as a tool to support another business rather than as a profitable venture unto itself, and hence sales occurred as a consequence of other efforts rather than because of organized marketing campaigns. By the time the SEC wrote its report, sales were a major part of many mutual fund operations; however, through the early 1930s, officers did little selling.
The "Cement Armada" and Other Nigerian Government Attempts to Ease Construction Bottlenecks during the 1970s Oil Boom
In this paper I investigate Nigeria's post-independence economic malaise through the study of one particular Nigerian government policy: the decision to try to increase the supply of construction inputs in the country, and ease a critical bottleneck which was slowing down the investment of its national development programs. This policy involved the public sector directly organizing cement imports and investing in and managing contractors and building material suppliers. The paper describes these attempts and, by presenting a construction supply curve, shows that one aspect of this policy, importing cement, dramatically raised the cost of building for much of the oil boom by causing catastrophic, multi-year port congestion. This had a direct impact on the ability of both the public and private sectors to grow. Existing literature has frequently mentioned the disproportionate role of the state in increasing the demand for construction during the 1970s oil boom, but this is the first in-depth study of the state's attempts to supply the industry. This paper is a historical case study which has significant implications for all underdeveloped countries attempting large-scale investment programs, with and without the help of a resource boom.
Since the mid-1990s, researchers, policy makers, and business leaders have touted nanotechnology as a key emerging technology for the twenty-first century. At the same time, nanotechnologya slippery term with definitions ranging from an ensemble of existing instrumental techniques to a specific class of new materials to a paradigm-shattering scientific frontierarrived accompanied by uncertainty and risk. Previous technological controversies over nuclear power, DDT, recombinant DNA, asbestos, and genetically modified organisms provided nanotechnology's proponents and opponents with examples they could mobilize as they worked to shape public perception and policy. This paper explores how and why concerns about nanotechnology's environmental, health and safety (EHS) issues moved so rapidly to the forefront of policy discussions. It also argues that the risk and regulation of previous technologies provided analogies for experts to debate the need to regulate this new emerging technology.
Corporate Capitalism and the Changing Constitution: The Legal Foundations of the Modern American Fiscal State
This paper explores how the turn-of-the-century consolidation of corporate capitalism helped build the legal foundations of the modern American fiscal state. In contrast to the standard accounts of the rise of direct and progressive taxation, which focus almost exclusively on political institutions and actors, this paper analyzes how the great merger movement and the rise of Big Business shaped the development of a nascent conceptual revolution in American public finance. It did so in at least two ways. First, tax reformers capitalized on the social anxieties that accompanied the rise of Big Business to help create the constitutional foundations for a graduated income tax as well the first permanent, peacetime income tax laws. Second, and perhaps more important, the advent of managerial corporate capitalism provided the organizational basis, or what public finance scholars refer to as the "tax handles," for the future growth of the income tax regime. In this paper I chronicle how these two factors contributed to building the foundations of the emerging modern American fiscal state.
The Italian Cooperative Movement and Its Legal Environment, 1945-2010
In the second half of the twentieth century, Italian legislation dealt specifically with cooperative enterprises. At the political level and in the everyday sense, this was then interpreted as a favor to a movement that had actual links to the world of the parties. In this contribution, instead, we maintain that the legislation wanted to promote a type of entrepreneurship that guaranteed the return of a social nature, and especially that the various regulations had an effective and obvious impact. In particular, the legislation tended to encourage dimensional growth and the capitalization of cooperatives. We explain, therefore, the correlation existing between the various legislative interventions and a series of empirical data that confirm how the cooperative movement was influenced by the changes in the regulations.
A Technocratic Matrimony: Collaboration between the State and Private and Public Enterprises during the War Reparation Era in Finland, 1945-1952
How do societies change? Historians and sociologists have long tried to understand the phenomenon of social change. Various theoretical models have been introduced to explain how societies move from agrarian into industrial, and recently also into information society. Social change has also been one of the most heated topics of political and ideological discussion. This paper investigates the social change in a small country. The research is a part of larger on-going project that tries to explain how Western industrial societies changed into an information society. This study builds a collaborative model in which the state and private and public companies jointly work together to enhance social change. The study argues that the change can take place in a relatively short period of time and the initiative for the change can come outside of the society. In this case the time period is right after the World War II, when Finland was forced to pay war reparations to the Soviet Union. It is argued that this massive project forced Finland to restructure not only its industry, but also its economy and social order.
States at War and Global Supply
This is a paper about the two world wars and the role of transport logistics in them. Arguably, both wars were world wars not only because they were fought over the world but because they were fought over access to and control of the world's resources. Without victory in the overseas supply war there was little prospect of victory in the land-based military war. This was a complex war that was often as much about denial of resources to the enemy as about acquisition of resources for oneself. For the purposes of an eighteen-minute presentation, I concentrate here on how Allied forces organized ocean transport for survival and victory. I begin with the challenges and then proceed to the solutions. My argument is that maritime business expertise and experience in running globally coordinated systems, as much as convoys or inter-Allied coordination, sustained Allied supply lines in the two world wars. Finally, toward the end of the paper, I reverse the exchange and ask how war in the twentieth century contributed to the subsequent shape of maritime business.
Matthew David Mitchell
The First Duke of Chandos and the Royal African Company
In 1720 an aristocratic clique led by James Brydges, first Duke of Chandos, bought a controlling stake in the Royal African Company. Convinced that the trans-Atlantic slave trade, at one time the RAC's main line of business, "is not to be carried on with any advantage" after the loss of the company's monopoly over British trade with Africa, Chandos fundamentally shifted the company's strategy, focusing its resources on the search for new African botanical and mineral resources that could be sold in England. Though this approach did not pay dividends, it did provide an example of how corporately organized firms behave when their legal and political environment turns decisively hostile.
Like other U.S. cities, Chicago built a powerful police force virtually from scratch in the second half of the nineteenth century. This essay posits that business leaders in Chicago pushed the municipal government to create such a force in reaction to the labor movement, and focuses on the crucial decade of the 1870s. As the city descended into an economic depression after 1873, Chicago seemed more divided along ethnic than class lines. A German-led People's Party ran the municipal government, and the native-born elite scrambled to reassert its power. Businessmen soon created the Citizens' Association to ensure professional control of the police no matter who won elections. When the strike of 1877 reached Chicago, businessmen further united to strengthen the police force, donating enormous sums to put down the strike and buy weapons for the department. They also formed a new, more exclusive organization dedicated to promoting their interests and police power, the Commercial Club of Chicago. This story suggests that business interests, not the threat of crime, drove the development of the police department, and that the police served to reconcile electoral democracy with the extremely unequal and exploitative Gilded Age economy.
"Security without disfiguring the furniture": The Chubb Lock and Safe Business and the Aesthetics of the Burglar-Proof Home in Britain, 1860-1939
Late nineteenth- and early twentieth-century Britain was a country beset by twin concerns: the steadily increasing number of burglaries, and the need to evoke status through the appearance and possessions of one's home. As successive governments sponsored police campaigns for homeowners to do more to safeguard their property, the lock and safe industry responded with sophisticated designs for ornamental locks and enamelled safes that sought to fulfill consumers' desire for security within the context of a beautiful home. Examining the product development and advertising of the Chubb Lock and Safe Co., this paper argues that state-enforced representations of crime served as the motor for commercial enterprise and aesthetic appeal alike, uniting safety with ideals of artistic domesticity. As such, the home's interior reflected an interplay between boundaries and furnishings, the latter disguising the former to evoke carefree residential harmony. Scholarship on the history of domestic space has treated decoration and security separately, disregarding their combined effect on the appearance of homesand ignoring the breadth of commercial imperatives at work in the design of security technologies. Juxtaposing Chubb's products against political discourse on crime and cultural preoccupations with aesthetics, this paper illustrates the intersection of media, state, and market in devising commercially lucrative preventative technologies.
Crystal M. Moten
"A Credit to our City as well as our State": African American Beauticians, the Pressley School of Beauty Culture, and the State of Wisconsin, 1945-1950
Because of its relationship to the state of Wisconsin, the Pressley School of Beauty Culture in Milwaukee was a site of both opportunity and struggle for African American beauticians. Founded in 1945, the Pressley School of Beauty Culture was the only cosmetology training program in the state for African American beauticians. Despite their desire to obtain the skills they needed to practice legally in the state, Pressley students were often prohibited by stringent state statutes and tenuous relationships with state officials from successfully completing the cosmetology course. While historians have explored the relative economic, social, and political autonomy enjoyed by African American beauticians, exploring the work of African American beauticians in Wisconsin illustrates the impact of state policies on their ability to practice legally in that state. Despite these difficulties, African American beauticians in Wisconsin advocated for themselves as well as engaged in civic activism on behalf of working-class African American Milwaukeeans. Using archival sources such as the Wisconsin State Department of Health Cosmetology Division records of the Pressley School of Beauty Culture, I illustrate the ways in which African American beauticians negotiated with the state, stood up for themselves, and determined to be a "credit to [the] city and [the] state."
There an evolving debate on the feasibility of state-owned enterprises (SOEs) in emerging markets. What lessons can business history provide to SOEs? Between 1970 and 1992 the federal government of Brazil had over 150 state-owned enterprises in industries that ranged from mining and oil to steel, airplanes, and utilities. Some of these SOEs were more efficient than others (measured in operational profitability, in labor productivity, or in their capacity to generate internal funds to invest, among other factors). A large literature attributed the relative success of this group of Brazilian SOEs to two factors: the autonomy that SOEs enjoyed from the government and the fact that some SOEs had low political intervention and were run by managers with technical backgrounds. In this paper we use a newly collected database of careers of hundreds of managers of SOEs and of financial and productivity data in the largest 100 public companies between 1970 and 1992 to explore how much manager autonomy and background mattered to explain differences in performance in state-owned enterprises beyond simple differences in performance due to industry characteristics.
Laurence B. Mussio
A Clear and Present Danger? The State, Foreign Control, and the Canadian Life Insurance Industry, 1950-1962
This paper examines the relationship between the Canadian Life Insurance Industry and the government of Canada in responding to the threat of a massive American-based takeover of the Canadian life insurance industry in the 1950s. It does so primarily through the experience of the then-largest Canadian life company, Sun Life of Canada. In the context of the growing contintentalization of the post-World War II Canadian economy, joint-stock life companies found themselves particularly vulnerable to the depredations of aggressive groups of investors south of the border. In the United States, a new and more pugnacious attitude on the part of stockholders added to the perilous environment. Stockholders were much more willing to challenge managerial prerogatives over a range of issues, from profit levels to investments, previously under the undisputed control of management. By the 1950s these pressures combined to make Canadian stock life companies increasingly vulnerable to takeover. Companies found themselves with ever-increasing assets balanced on a relatively small shareholder investment. As a general rule Canadian life company shares were closely held by a relatively small number of shareholders. Further, the capitalization itself was divided into comparatively few shares. When U.S. investors turned their attention to the institutional insurance behemoths north of the border, they saw large, profitable companies ripe for takeovers that could be accomplished with relatively modest amounts of money. Throughout the 1950s a determined group of American investors sought to capture managerial control of Sun Life of Canada. They were met with a broad consensus of corporate executives and public policy-makers who held to the view that, like the transportation, communications, and public utilities sectors, banking and insurance were key economic activities best left to Canadians. This threat against Canadian life companies represented perhaps the greatest peril to Canadian control in the financial services sector of the postwar period. The struggle to define both industry interests and the national interest commanded the efforts of both senior management and federal regulation. The result was the mutualization of virtually all the Canadian major life insurance companies. This paper is based on extensive access to an extraordinary range of corporate and public archives in Canada and the United States.