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The Essential Alfred Chandler: Essays Toward a Historical Theory of Big Business

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This book is a collection of Chandler's essays that have been published in various journals over the years. Chandler is a Business Historian at Harvard. My favorite essay is "The Role of Business in the U.S.: A Historical Survey" originally published in "Daedalus" in 1969. In it, Chandler says that business went through four stages: 1) from merchant to wholesaler; 2) from wholesaler to manufacturer; 3) from manufacturer to manager; and 4) from manager to sharing w/government. The last is probably synonymous with corporatism.

Merchants were pre-1800 and were Hamiltonians who called themselves Federalists, but were actually opposed to federalism and wanted a strong central government instead.

Wholesalers were financiers of long-term growth from 1800 to 1850. They pressured the state and municipal governments to issue or guarantee bonds. They even persuaded the state to build and operate transport facilities, with the average man footing the bill. Wholesalers were sectional, not national, which was evident in wholesalers versus planters (North versus the South).

From 1850 to 1900, manufacturers rose to dominance. Wholesalers were no longer needed. Bankers and railroads along with vertical consolidation caused the demise of the wholesaler. High start-up investment made entry difficult. During this time, the corporate mode of business oranization began growing in popularity. It was easier to move up through the military-like ranks of a corporation than to make one's own business. It is interesting to note that by 1894, U.S. output equalled that of Britain, France and Germany combined!

From 1900 to the Present, the manager mode arose because businesses were being swallowed by corporations. And corporations are not operated by the owners; they are operated by hired managers. Managers are an economic elite, according to Chandler. They used government to finance their projects (public money is the average man's money), used government to protect them from foreign competition, and used government's central banking system beginning in 1913.

In the 1930s, Chandler detected government cooperation with corporations (or what I would call corporatism). About all Chandler had to say about this early form of corporatism was that corporations were unable to alleviate the Depression, so he favored government intervention as a remedy. It is interesting to note that the government, like its child - the corporation, was just as unable to alleviate the Depression; in fact, government intervention prolonged it.

Chandler ends with his survey without drawing conclusions. He says "Such analyses are properly left to social scientists and businessmen". So he get 4 stars for his history, but not a fifth for failing to interpret what it all means.