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Recasting the Organizational Synthesis: Structure and Process in the Twentieth and Twenty-First Centuries

Published online by Cambridge University Press:  13 December 2011

Louis Galambos
Louis Galambos
Affiliation:
LOUIS GALAMBOS is professor in the Department of History and a codirector of the Institute for Applied Economics and the Study of Business Enterprise at Johns Hopkins University.
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Abstract

Two major forces have been remaking the organizational setting of the United States in the recent past. The third industrial revolution and globalization are having a dramatic impact on the structure and process of American economic institutions and on the nation's political process. This third version of the organizational synthesis probes, with varying degrees of success, the vast literature that has accumulated around these two themes in the years since 1983, when the Business History Review published the second version of the paradigm. While much has changed in the nation's history and its historiography, bureaucratic institutions continue to dominate the society's organizational landscape. Pressed to change, to adapt to the need for greater efficiency and innovative capability, the surviving bureaucracies and the professionals who people them have experienced wrenching changes in recent years. To date, this “American solution” to global competition and technical transformation has been expensive in human terms but an overwhelming economic success for America.

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Articles
Information
Business History Review , Volume 79 , Issue 1 , Spring 2005 , pp. 1 - 38
Copyright
Copyright © The President and Fellows of Harvard College 2005

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References

1 My 1983 article was known colloquially as “Org Syn II.” The Business History Review also published “Org Syn I,” the first essay in this series, at a time when there was (as Tom McCraw astutely recognized) very little literature to cite. See Galambos, Louis, “The Emerging Organizational Synthesis in Modern American History,” Business History Review 44 (Autumn 1970): 279–90CrossRefGoogle Scholar. I was at that early point scraping the bottom of the barrel to find the research I needed to argue that there was a new paradigm taking shape. The pace of institutional research quickened, however, and the barrel was so full by the early 1980s that I could only sample three interrelated fields of monographic research on organization building and performance. Today, the barrel has been replaced by a series of giant grain elevators: one for history, another for economics, and still another for the remaining social sciences. All three of the elevators contain relevant institutional syntheses as well as more tightly focused monographs, making my task in 2004 even more one of selection, as well as meta-synthesis and evaluation. Both of the earlier papers are available on http://www.jhu.edu/∼iaesbe/.

2 Then, as now, I am focusing upon formal organizations, and I use the terms “organizational” and “institutional” interchangeably. There is a well-developed school of institutional studies that focuses on common practices and their associated values, such as those involved with private property; I am not using either institution or organization in that sense.

3 Balogh, Brian, “Reorganizing the Organizational Synthesis: Federal-Professional Relations in Modern America,” Studies in American Political Development 5 (Spring 1991): 119–72CrossRefGoogle Scholar.

4 Held, David, McGrew, Anthony, Goldblatt, David, and Perraton, Jonathan, in Global Transformations: Politics, Economics and Culture (Stanford, 1999)Google Scholar, group those who debate the issue of globalization into three schools: the hyperglobalists; the skeptics; and the transformationalists. The hyperglobalists see globalization defining “a new epoch of human history in which ‘traditional nation-states have become unnatural, even impossible business units in a global economy.’” The skeptics “argue that globalization is essentially a myth…” and the transformationalists, who see “contemporary patterns of globalization … as historically unprecedented…,” contend that the direction and outcomes of change are “uncertain” (pp. 2–10).

5 Precise dates are not particularly useful where industrial revolutions are concerned, but the common practice is to link the beginnings of the third industrial revolution to the combined impact of microwave transmission, the transistor, the integrated circuit, the computer, and, finally, the Internet. This makes the 1940s and the 1950s pivotal decades and holds that the full impact of the revolution was experienced somewhat later.

6 By “structure,” I mean the basic form or structure of authority of the social systems most characteristic of the economic and political realms of the society. By “process,” I am referring merely to the manner in which those institutions go about their work. I am attempting to bring this history into the present, using 2005 as my end point. End points matter to historical syntheses, whether or not the historians extend their history into the recent past. We all stand on a ledge in the present and attempt from that vantage point to view and understand the past. My point here is different from the one staked out by Fukuyama, Francis in The End of History and the Last Man (New York, 1992)Google Scholar. My concept of an end point is transitory and more bounded than Fukuyama's; I can neither see nor imagine an end to “ideological evolution” (p. xi). I also adhere to a slightly different position than Lamoreaux, Naomi R., Raff, Daniel M. G., and Temin, Peter in “Beyond Markets and Hierarchies: Toward a New Synthesis of American Business History,” American Historical Review 108, 2 (April 2003): 404–33CrossRefGoogle Scholar, insofar as I find it impossible to conceive of a historical synthesis without an end point. The philosophical grounding for my position is based on a blend of the first half of Collingwood, R. G., The Idea of History (Oxford, 1956 ed.)Google Scholar, and Gleick's, James exposition in Chaos: Making a New Science (New York, 1987)Google Scholar.

7 Here I am adapting to academic intellectual exchanges the language that has been used to describe patterns of trade: trade is more “extensive” when it spreads across larger parts of the globe; it becomes more “intensive” when it involves more products and services and thus greater volume. The same can be said for the academic trade in research, publication, and ideas and, in this case, the exchanges across disciplinary boundaries.

8 Castells, Manuel, The Information Age: Economy, Society and Culture (Maiden, Mass., 2000 ed.)Google Scholar: vol. 1, The Rise of the Network Society; vol. 2, The Power of Identity (2004 ed.); vol. 3, End of Millenium (2000 ed.). For a thoughtful explanation and critique of the Castells “magnum opus,” see Webster, Frank, Theories of the Information Society (London, 2002), 97–123, 263–73Google Scholar; in answer to his own question, “Is there an information society?” Webster concludes: “I have quite forcefully rejected the validity of the concept information society, even though it is much used in and outside the social sciences. This [he adds] does not mean it is entirely worthless” (p. 263).

9 This is just another way of saying that, on this point, Max Weber was right: “The whole pattern of everyday life is cut to fit this framework,” he wrote. “For bureaucratic administration is, other things being equal, always, from a formal, technical point of view, the most rational type.” It was, Weber concluded, “capable of attaining the highest degree of efficiency and is in this sense formally the most rational known means of carrying out imperative control over human beings.” The Theory of Social and Economic Organization (New York, 1964 ed.), 337Google Scholar. This is, of course, my most fundamental disagreement with Castells, who portrays a rendezvouz with a flexible, constantly shifting network society. Like “football” and “soccer,” the term “nonprofit” has an American and an international usage: many types of American nonprofits are called nongovernmental organizations (NGOs) in the rest of the world. NGOs are also nonprofits, so I am keeping the American usage.

10 Harvey, David, The Condition of Postmodernity: An Enquiry into the Origins of Cultural Change (Oxford, 1990)Google Scholar.

11 For historians the best introduction to the literature on the professions and professionalization continues to be sociologist Andrew Abbott's study, The System of Professions: An Essay on the Division of Expert Labor (Chicago, 1988)Google Scholar. One does not have to accept the author's emphasis on “jurisdication,” that is, the exercise of professional power and control, to benefit from reading this insightful social analysis and history. Curiously, The Handbook of Economic Sociology, edited by Smelser, Neil J. and Swedberg, Richard (Princeton, 1994)Google Scholar, does not have a chapter on professionals and only devotes six pages to the subject.

12 The idea of governmental immortality comes from Kaufman, Henry, Are Government Organizations Immortal? (Washington, 1978)Google Scholar. The answer came when the Interstate Commerce Commission (ICC) and the Civil Aeronautics Board (CAB) closed their doors. See Derthick, Martha and Quirk, Paul J., The Politics of Deregulation (Washington, 1985)Google Scholar; and Vietor, Richard H. K., Contrived Competition: Regulation and Deregulation in America (Cambridge, Mass., 1994)CrossRefGoogle Scholar. The changes in U.S. public bureaucracies have, however, been concentrated more on the governmental process than on structure. Process in this case refers to the work these public institutions do: the complex, slow-moving, well-documented rate-of-return regulation by the ICC is a good example of the governmental process—as is the determination by Congress that the ICC had failed and should no longer control several of the nation's important transportation industries. Vietor's book focuses on the failures and achievements of the processes of regulation and deregulation.

13 Rosenbloom, Richard S. and Spencer, William J., eds., Engines of Innovation: U.S. Industrial Research at the End of an Era (Boston, 1996)Google Scholar; for an invaluable survey of R&D in industry, see David A. Hounshell's essay, “The Evolution of Industrial Research in the United States,” 13–85, in that volume.

14 Castells, The Rise of the Network Society, 148. John, Richard R., “Rendezvous with Information? Computers and Communications Networks in the United States,” in a special issue of Business History Review 75 (Spring 2001): 1–13CrossRefGoogle Scholar, discusses Castells and the chronology of the “information age.” Several of the essays in that issue of the Review offer useful insights into success and failure during the third industrial revolution. See Thomas Haigh, “Inventing Information Systems: The Systems Men and the Computer, 1950–1968,” 15–61; Leslie R. Berlin, “Robert Noyce and the Fairchild Semiconductor, 1957–1968,” 63–101; Martin Campbell-Kelly, “Not Only Microsoft: The Maturing of the Personal Computer Software Industry, 1982–1995,” 103–45; and Janet Abbate, “Government, Business, and the Making of the Internet,” 147–76. John's introduction and title suggest a different chronology and a different concept than mine of the central themes of American history from the late nineteenth century to the edge of the third industrial revolution.

15 Common usage places the beginnings of the second industrial revolution in the midnineteenth century, and establishes the full institutional impact as coming at the end of the century and continuing through much of the twentieth century. The chemical, electrical, and electrochemical industries played major roles in this transformation, which was accompanied by the rise of large combines in the private sector and the union of mass production with mass distribution. For a somewhat different chronology, see McCraw, Thomas K., ed., Creating Modern Capitalism: How Entrepreneurs, Companies, and Countries Triumphed in Three Industrial Revolutions (Cambridge, Mass., 1995), 12–15Google Scholar, from McCraw's “Introduction.”

16 My previous attempts to understand these developments and to place them in an historiographical context include the following: “What Have CEOs Been Doing?” Journal of Economic History 48 (1988): 243–58CrossRefGoogle Scholar; “What Makes Us Think We Can Put Business Back into American History?” Business and Economic History, 2nd ser., 20 (1992): 1–11Google Scholar; “U.S. Business History and Recent Developments in Historical Social Science in the United States,” in Davids, Mila, Goey, Ferry de, and Wit, Dirk de, eds., Proceedings of the Conference on Business History, October 1994 (Rotterdam, 1995), 112–20Google Scholar; “Myth and Reality in the Study of America's Consumer Culture,” in Merrill, Karen, ed., The Modern Worlds of Business and Industry: Cultures, Technology, Labor (Turnhout, 1998), 183–203Google Scholar; “Identity and the Boundaries of Business History: An Essay on Consensus and Creativity,” in Amatori, Franco and Jones, Geoffrey, eds., Business History Around the World (New York, 2003), 11–30CrossRefGoogle Scholar.

17 Chandler's publications since 1983 include Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, Mass., 1990)Google Scholar; Big Business and the Wealth of Nations (edited with Franco Amatori and Takashi Hikino) (New York, 1997)Google Scholar. Both of these books build on the perspective originally developed in Strategy and Structure: Chapters in the History of the Industrial Enterprise (Cambridge, Mass., 1962)Google Scholar and The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977)Google Scholar, while making some subtle changes in the author's paradigm. I present my position on Chandler's historical edifice in “The U.S. Corporate Economy in the Twentieth Century,” in Gallman, Robert E. and Engerman, Stanley L., eds., The Cambridge Economic History of the United States, vol. 3: The Twentieth Century (New York, 2000), 927–67,1125–32Google Scholar.

18 Least understood of the three prongs is mass distribution, in part because so many scholars have considered mass-production technologies as the primary means of achieving productivity gains. Fortunately, Tedlow, Richard S., in New and Improved: The Story of Mass Marketing in America (New York, 1990)Google Scholar, and Laird, Pamela Walker, in Advertising Progress: American Business and the Rise of Consumer Marketing (Baltimore, 1998)Google Scholar, have deepened our knowledge of two aspects of modern distribution. See also Friedman, Walter A., Birth of a Salesman: The Transformation of Selling in America (Cambridge, Mass., 2004)Google Scholar; the consumer-culture literature I reviewed in “Myth and Reality in the Study of America's Consumer Culture”; and the work of Sally Clarke, including “Consumers, Information, and Marketing Efficiency at GM, 1921–1940,” and “Consumer Negotiations,” in Business and Economic History 25 (Fall 1996): 186–95Google Scholar, and 26 (Fall 1997): 101–22, respectively.

19 Christopher McKenna, The World's Newest Profession: Management Consulting in the Twentieth Century (forthcoming, 2006); “The Origins of Modern Management Consulting,” Business and Economic History 24 (Fall 1995): 51–58Google Scholar; and “Two Strikes and You're Out: The Demise of the New York Herald Tribune,” Historian 63 (Winter 2001): 287–308CrossRefGoogle Scholar. See also Hogan, Michael J., The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947–1952 (New York, 1987)CrossRefGoogle Scholar.

20 Chandler, Scale and Scope, 593. As the author explained on the same page, the 600 largest industrial enterprises in these three countries “produced two-thirds of the world's industrial output from the 1880s until the depression of the 1930s.”

21 Kuhn, Thomas S., The Structure of Scientific Revolutions (Chicago, 1970 ed.)Google Scholar. For “elaborations and extensions,” see, for instance, the work of Bruce R. Scott and the books that came out of dissertation research at Harvard Business School: Derek F. Channon (with a foreword by Scott), The Strategy and Structure of British Enterprise (Boston, 1973)Google Scholar; Rumelt, Richard P., Strategy, Structure, and Economic Performance (Boston, 1974)Google Scholar; Dyas, Gareth P. and Thanheiser, Heinz T., The Emerging European Enterprise: Strategy and Structure in French and German Industry (London, 1976)CrossRefGoogle Scholar. As Scott reported in 1973, he had been at work since 1963 “formalizing and testing” Chandler's “developmental concept.” See Bruce R. Scott, “The Industrial State: Old Myths and New Realities,” Harvard Business Review (Mar.–Apr. 1973): 133–48. He reviewed his team's various projects and concluded in an optimistic vein that “a majority of the largest companies in the industrialized West are behaving in a thoroughly market-oriented fashion. Far from ‘replacing’ or dominating markets, they are becoming increasingly sensitive to new markets and are willing to shift resources from one market to another as opportunities develop” (p. 145). Lazonick, William, Business Organization and the Myth of the Market Economy (New York, 1991)Google Scholar employed the Chandler synthesis in a powerful critique of transactions cost theory. Lazonick's more recent work has moved away from Chandler's central concepts: see “Innovative Enterprise and Historical Transformation,” Enterprise & Society 3 (March 2002), 3–47CrossRefGoogle Scholar; and Carpenter, Marie, Lazonick, William and O'Sullivan, Mary, “The Stock Market and Innovative Capability in the New Economy: The Optical Networking Industry,” Industrial and Corporate Change 12, 5 (2003): 963–1034CrossRefGoogle Scholar. More recently, Farber, David, in Sloan Rules: Alfred P. Sloan and the Triumph of General Motors (Chicago, 2002)Google Scholar, stays in the Chandler paradigm while adding a political dimension to the Sloan saga. Sloan's hatred for the New Deal was matched, Farber tells us, by his insensitivity to the horrors of European fascism. In Making America Corporate, 1870–1920 (Chicago, 1990)Google Scholar, Olivier Zunz explores to good effect the social mobility fostered by the rise of the industrial corporation; see also his Why the American Century? (Chicago, 1998)Google Scholar.

22 For a good example of bashing, see the 1997 issue (26, 1) of Business and Economic History, edited by Philip Scranton and Roger Horowitz, on “The Future of Business History.” See also the special issue of Business History Review 72 (Summer 1998)Google Scholar on “Gender and Business.” On Chandler-citing, see Hausman, William J., “Business History in the United States at the End of the Twentieth Century,” in Amatori, Franco and Jones, Geoffrey, eds., Business History around the World (New York, 2003), 92–96Google Scholar, who asks, “To what extent does Chandler dominate business history?” and provides an answer with “a citation-based approach.” Hausman concludes that “using citations as a measure of impact, Chandler dominates the field.” For other considerations of Chandler's history and its impact, see John, Richard R., “Elaborations, Revisions, Dissents: Alfred D. Chandler, Jr.'s The Visible Hand after Twenty Years,” Business History Review 71 (Summer 1997): 151–200CrossRefGoogle Scholar. The same issue includes a number of other essays that examine Chandler's ideas in the context of British, Japanese, and Italian business and economic developments.

23 See, especially, Lamoreaux, Naomi R., The Great Merger Movement in American Business, 1895–1904 (New York, 1985)CrossRefGoogle Scholar.

24 Marchand, Roland, Creating the Corporate Soul: The Rise of Public Relations and Corporate Imagery in American Big Business (Berkeley, 1998)Google Scholar. See also Marchand's Advertising the American Dream: Making Way for Modernity, 1920–1940 (Berkeley, 1985)Google Scholar.

25 Roy, William J., Socializing Capital: The Rise of the Large Industrial Corporation in America (Princeton, 1997)Google Scholar; Fligstein, Neil, The Transformation of Corporate Control (Cambridge, Mass., 1990)Google Scholar; and Perrow, Charles, Organizing America: Wealth, Power, and the Origins of Corporate Capitalism (Princeton, 2002)Google Scholar. Here the evidence was mixed. What we know about the large corporations and the increases in productivity in their industries and in the aggregate indicates that over the long term, however, Chandler's characterization of corporate performance was more accurate than that of the critics on this point.

26 Philip Scranton and Jonathan Zeitlin, “Productive Alternatives: Flexibility, Governance, and Strategic Choice in Industrial History,” in Franco Amatori and Geoffrey Jones, eds., Business History around the World, 62–80; Philip Scranton, Endless Novelty: Specialty Production and American Industrialization, 1805–1925; Colli, Andrea, The History of Family Business, 1850–2000 (Cambridge, 2003)Google Scholar; Jones, Geoffrey and Rose, Mary B., eds., Family Capitalism, a special issue of Business History 35 (1993)Google Scholar. Colli, Andrea, Pérez, Paloma Fernández, and Rose, Mary, in “National Determinants of Family Firm Development: Family Firms in Britain, Spain, and Italy in the Nineteenth and Twentieth Centuries,” Enterprise and Society 4, 1 (2003): 28–64CrossRefGoogle Scholar, note (p. 29): “Family firms make up 75 percent of all firms in Italy, 80 percent of those in Germany, 76 percent of those in the United Kingdom, and 71 percent of those in Spain. In France 60 percent of the biggest firms were family owned, while in Italy almost half of the fifty largest companies were family firms.”

27 Particularly important are the publications by Leslie Hannah, Youssef Cassis, and Geoffrey Jones. See Hannah, , “Marshall's ‘Trees’ and the Global ‘Forest’: Were ‘Giant Red-woods’ Different?” in Lamoreaux, Naomi R., Raff, Daniel M. G., and Temin, Peter, eds., Learning By Doing in Markets, Firms, and Countries (Chicago, 1999), 253–77Google Scholar. Hannah studied a 1912 cohort of giant firms and found (p. 260) “the ‘quarter-life’ of the 1912 giants (i.e., the time taken for a quarter of them to disappear in bankruptcy, nationalization, or merger) was thirty-three years, and they are, as we approach the millennium, now hovering around their half-life.” Cassis published a more general study, Big Business: The European Experience in the Twentieth Century (Oxford, 1997)Google Scholar, which mounted a strong argument for the diversity of European business organizations and performances and for the success over a good part of the century achieved by British firms. Geoffrey Jones, “Great Britain: Big Business, Management, and Competitiveness in Twentieth-Century Britain,” in Chandler, Amatori, and Hikino, eds., Big Business and the Wealth of Nations, 102–38, carefully dissects the issue of British performance and organizational capabilities.

28 On governance, see especially O'Sullivan, Mary, Contests for Corporate Control: Corporate Governance and Economic Performance in the United States and Germany (Oxford, 2000)Google Scholar; and “The Political Economy of Comparative Corporate Governance,” Review of International Political Economy 10,1 (2003): 23–72CrossRefGoogle Scholar.

29 On organizational capability, see especially Harvey, Charles and Jones, Geoffrey, “Organizational Capability and Competitive Advantage,” Business History 34 (January 1992): 1–10CrossRefGoogle Scholar, and the other articles in this special issue. On the acquisition of innovations, see Hounshell, David A. and Smith, John Kenly Jr., Science and Corporate Strategy: Du Pont R&D, 1902–1980 (New York, 1988)Google Scholar.

30 In addition to Hannah's article, see Graham, Margaret B. W., RCA & the VideoDisc: The Business of Research (New York, 1986)Google Scholar; Henderson, Rebecca M., “Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms,” Administrative Science Quarterly 35 (1990): 9–30CrossRefGoogle Scholar; and Christensen, Clayton M., The Innovator's Dilemma (New York, 1997)Google Scholar. Christensen's study frightened some executives, and there is scattered evidence suggesting that they may have heeded the announcement on the front cover: “The Revolutionary Book That Will Change The Way You Do Business.” If so, their behavior may in part account for the recent increases in productivity gains by American businesses.

31 The organizational capabilities literature spawned by Chandler, his critics, and the economists who began to take a substantial interest in organizations is particularly important in this regard. See, for example, volume 11, number 4 (2002) of Industrial and Corporate Change, devoted to “industrial dynamics.” Of special interest is Steven Klepper, “The Capabilities Of New Firms and the Evolution of the US Automobile Industry,” 645–66. See also Casson, Mark and Rose, Mary B., eds., a special issue of Business History 39, 4 (1997)Google Scholar, devoted to “Institutions and the Evolution of Modern Business,” in which S. R. H. Jones, author of “Transactions Costs and the Theory of the Firm: The Scope and Limitations of the New Institutional Approach,” 9–25, provides an excellent short review of the development of the new institutional economics and places the capabilities studies in that context.

32 Lamoreaux, Naomi R., “Entrepreneurship, Business Organization, and Economic Concentration,” in Engerman, Stanley L. and Gallman, Robert E., The Cambridge Economic History of the United States, vol. 2: The Long Nineteenth Century (New York, 2000), 403–34CrossRefGoogle Scholar, uses this categorization, citing Averitt, Robert T., The Dual Economy: The Dynamics of American Industry Structure (New York, 1968), 1–21Google Scholar.

33 Schumpeter, Joseph A., Capitalism, Socialism, and Democracy (New York, 1950)Google Scholar; Toninelli, Pier Angelo, ed., The Rise and Fall of State-Owned Enterprise in the Western World (New York, 2000)CrossRefGoogle Scholar. Accompanying these business bureaucracies were labor-union bureaucracies that were also very large and complex. See, for instance, Tomlins, Christopher, The State and the Unions: Labor Relations, Law, and the Organized Labor Movement in America, 1880–1960 (New York, 1985)Google Scholar; and Blyth, Mark, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century (Cambridge, 2002)CrossRefGoogle Scholar, particularly the chapter “Building American Embedded Liberalism,” 49–95.

34 Maddison, Angus, The World Economy: A Millennial Perspective (OECD, 2002), 272–75Google Scholar. The West European countries were Austria, Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Sweden, Switzerland, and the United Kingdom.

35 While I am using the distinction between studies that emphasize structure and those that emphasize process, I recognize that these categories are not mutually exclusive. Chandler's numerous books tell us a great deal about economic processes, but nevertheless I believe he gives more emphasis to structure, particularly to changes in structure, than he does to business processes other than the determination of strategy. Lamoreaux, Raff, and Temin take an interest in structure, but they frame their paradigm in terms of process. For a provocative effort to blend a Chandleresque concept of structure with a Schumpeterian process analysis focused on entrepreneurship, see McCraw, Thomas K., American Business, 1920–2000: How It Worked (Wheeling, Ill., 2000)Google Scholar; for the author, “the stark fact of American business success in improving the material life of millions of people is beyond dispute” (p. 9). McCraw has dealt extensively with Schumpeter's ideas: see “Schumpeter Ascending,” American Scholar 60 (Summer 1991): 371–92Google Scholar.

36 Yates, JoAnne, in Control through Communication: The Rise of System in American Management (Baltimore, 1989)Google Scholar; “Evolving Information Use in Firms, 1850–1920: Ideology and Information Techniques and Technologies,” in Lisa-Bud-Frierman, , ed., Information Acumen: The Understanding and Use of Knowledge in Modern Business (London, 1994), 26–50Google Scholar; and “The Structuring of Early Computer Use in Life Insurance,” Journal of Design History 12, 1 (1999): 5–24CrossRefGoogle Scholar, provides an excellent guide to early internal controls, as does Fields, Gary, in Territories of Profit: Communications, Capitalist Development, and the Innovative Enterprises of G. F. Swift and Dell Computer (Stanford, 2004)Google Scholar. See also Mindell, David A., Between Human and Machine: Feedback, Control, and Computing before Cybernetics (Baltimore, 2002)Google Scholar, which focuses on the period from WWI through WWII. Like Balogh, Mindell finds a significant watershed in the Second World War but nevertheless concludes that the “wartime projects did not culminate in a single, unified vision” (p. 313).

37 Temin, Peter, ed., Inside the Business Enterprise: Historical Perspectives on the Use of Information (Chicago, 1991)CrossRefGoogle Scholar; Lamoreaux, Naomi R. and Raff, Daniel M. G., eds., Coordination and Information: Historical Perspectives on the Organization of Enterprise (Chicago, 1995)CrossRefGoogle Scholar; Lamoreaux, Raff, and Temin, eds., Learning by Doing. As the authors explain in the latter volume: “The two previous volumes in this series essentially asked the question, ‘What goes on inside firms?’ They advanced the answer that business leaders have been centrally preoccupied with the management of information flows and asymmetries (situations where one party in a relationship has more or better information than another).” The third volume moved the processes of learning “to center stage by asking explicitly how firms, industries, and even nations can learn to overcome uncertainty.” They explored “some of the techniques that firms employ to create competitively valuable informational asymmetries and at the same time prevent unfavorable ones from arising” (p. 10). See also Langlois, Richard N., “Chandler in a Larger Frame: Markets, Transactions Costs, and Organizational Form in History,” Enterprise & Society 5 (Sept. 2004): 355–75CrossRefGoogle Scholar. Other contributors to this symposium include Naomi R. Lamoreaux, Daniel M. G. Raff, Peter Temin, Charles F. Sabel, and Jonathan Zeitlin.

38 The authors remark on Gavin Wright's analysis of the “‘social capabilities’ that allowed the United States to move into a position of world economic leadership by 1890.” Wright's focus was on “the networks of people that made possible the transfer of technological knowledge throughout the nation” (p. 14). Gavin Wright, “Can a Nation Learn? American Technology as a Network Phenomenon,” in Lamoreaux, Raff, and Temin, Learning by Doing, 295–326. My own contribution to the network literature is Galambos, Louis and Sewell, Jane Eliot, Networks of Innovation: Vaccine Development at Merck, Sharp & Dohme, and Mulford, 1895–1995 (New York, 1995).Google Scholar On one of the “broker” organizations that developed to transmit ideas between organizations, see Cornell, Thomas D., Establishing Research Corporation: A Case Study of Patents, Philanthropy, and Organized Research in Early Twentieth-Century America (Tucson, 2004)Google Scholar.

39 Lamoreaux, Raff, and Temin, Learning by Doing, 8. On evolutionary economics, see also Lipartito, Kenneth and Sicilia, David B., eds., “Introduction: Crossing Corporate Boundaries,” in Constructing Corporate America: History, Politics, Culture (Oxford, 2004), 9–10CrossRefGoogle Scholar; Dosi, Giovanni and Nelson, Richard R., “An Introduction to Evolutionary Theories in Economics,” Journal of Evolutionary Economics 4 (1994): 153–72CrossRefGoogle Scholar; Richard R. Nelson, “Evolutionary Theorizing about Economic Change,” in Smelser and Swedberg, eds., Handbook of Economic Sociology, 108–36.

40 Jeremy Greenwood and Boyan Jovanovic, “The IT Revolution and the Stock Market,” NBER Working Paper No. 6931 (Feb. 1999); Cortada, James W., The Digital Hand: How Computers Changed the Work of American Manufacturing, Transportation, and Retail Industries (New York, 2004)CrossRefGoogle Scholar; Cortada, , “Progenitors of the Information Age: The Development of Chips and Computers,” in Chandler, Alfred D. Jr. and Cortada, James W., eds., A Nation Transformed by Information: How Information Has Shaped the United States from Colonial Times to the Present (New York, 2000), 177–216Google Scholar; and Brock, Gerald W., The Second Information Revolution (Cambridge, Mass., 2003)Google Scholar. Brock concludes: “While the story is not complete, we are moving toward an era of distance-insensitive information transmission at near zero price” (p. 301). Bassett, Ross Knox, To the Digital Age: Research Labs, Start-Up Companies, and the Rise of MOS Technology (Baltimore, 2002)Google Scholar. But for a contrasting view, see Gary Fields's analysis of Dell Computer in Territories of Profit, 139–232.

41 Although Lamoreaux et al., in “Beyond Markets and Hierarchies,” do not appear to use Castells's paradigm, there is a link between what they are doing on recent developments in business and Castells's conclusion that the new economy is “informational because the productivity and competitiveness of units or agents in this economy… fundamentally depend upon their capacity to generate, process, and apply efficiently knowledge-based information.” Rise of the Network Society, p. 77. There is also a link that could be established between their informational analysis and the normal political process in America. See, for instance, Hansen, John Mark, Gaining Access: Congress and the Farm Lobby, 1919–1981 (Chicago, 1991)Google Scholar. In a brilliant analysis of the Soviet Union, Brooks, Jeffrey, Thank You, Comrade Stalin!: Soviet Public Culture from Revolution to Cold War (Princeton, 2000)Google Scholar, shows how the information system became locked on politically correct stereotypes and was unable to read changes in the nation's environment.

42 The existence of a large commodity sector is one of the most important reasons for not accepting in toto Manuel Castells's characterization of the new society, that is, the network society, in End of Millennium, 371–82. This leaves me rather close to some of the criticisms of Castells expressed by Frank Webster in Theories of the Information Society; like Webster, I think “we may best appreciate information trends by situating them within the history and pressures of capitalist development” (p. 267).

43 David, Paul A., “Clio and the Economics of QWERTY,” American Economic Review 75 (May 1985): 332–37Google Scholar. The author explains: ”A path-dependent sequence of economic changes is one of which important influences upon the eventual outcome can be exerted by temporally remote events, including happenings dominated by chance elements rather than systematic forces” (p. 332). See also David's more recent article, “Path Dependence, Its Critics and the Quest for 'Historical Economics,” in Garrouste, P. and Ioannides, S., eds., Evolution and Path Dependence in Economic Ideas: Past and Present (Cheltenham, 2001)Google Scholar. Historians will perhaps find of interest the author's concluding section, which “applies the notion of ‘lock-in’ reflexively to the evolution of economic analysis, suggesting that resistance to historical economics is a manifestation of ‘sunk cost hysteresis’ in the sphere of human cognitive development.” On the historical development of that “sunk cost,” see Ross, Dorothy, The Origins of American Social Science (New York, 1991), esp. 390–476Google Scholar.

44 Lewis, Michael, The New New Thing: A Silicon Valley Story (New York, 2000), 22–23Google Scholar. There is a substantial body of literature on Silicon Valley. See, for example, Saxenian, AnnaLee, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge, Mass., 1994)Google Scholar; Leslie, Stuart W., The Cold War and American Science: The Military-Industrial-Academic Complex at MIT and Stanford (New York, 1993)Google Scholar.

45 Grove, Andrew, Only the Paranoid Survive (New York, 1996)Google Scholar.

46 Triplett, Jack E. and Bosworth, Barry P., Productivity in the U.S. Services Sector: New Sources of Economic Growth (Washington, 2004), 1Google Scholar.

47 Oliner, Stephen D. and Sichel, Daniel E., “The Resurgence of Growth in the Late 1990s: Is Information Technology the Story?” in Journal of Economic Perspectives 14 (Fall 2000): 3–22CrossRefGoogle Scholar. In the same issue, see Erik Brynjolfsson and Lorin M. Hitt, “Beyond Computation: Information Technology, Organizational Transformation and Business Performance,” 23–48; and Robert J. Gordon, “Does the ‘New Economy’ Measure up to the Great Inventions of the Past?” 49–74. See also Gambardella, Alfonso and Malerba, Franco, eds., The Organization of Economic Innovation in Europe (Cambridge, 1999)Google Scholar; Mowery, David C. and Nelson, Richard R., eds., Sources of Industrial Leadership: Studies of Seven Industries (Cambridge, U.K., 1999)CrossRefGoogle Scholar.

48 Galambos, Louis and Abrahamson, Eric, Anytime, Anywhere: Entrepreneurship and the Creation of a Wireless World (New York, 2002)Google Scholar.

49 In the 1980s, already IT was producing more strategic alliances in manufacturing than the automobile, biotech, and chemical industries combined. Jones, Geoffrey, The Evolution of International Business: An Introduction (London, 1996), 144Google Scholar.

50 The hard-disk-drive (HDD) industry provides an excellent example of how frequently and forcefully IT firms had to change to remain competitive. See McKendrick, David G., Doner, Richard F., and Haggard, Stephen, “Global Shift and Competitiveness in Hard Disk Drives,” From Silicon Valley to Singapore: Location and Competitive Advantage in the Hard Disk Drive Industry (Stanford, 2000), 87–118Google Scholar. “The timing, direction, and scope of globalization allowed American firms to retain industrial leadership in hard disk drives” (p. 118). See also Richard N. Langlois and W. Edward Steinmueller, “The Evolution of Competitive Advantage in the Worldwide Semiconductor Industry, 1947–1996,” in David C. Mowery and Richard R. Nelson, eds., Sources of Industrial Leadership, 19–78.

51 See the comments in Lamoreaux, Naomi R., Raff, Daniel M. G., and Temin, Peter, “Beyond Markets and Hierarchies: Toward a New Synthesis of American Business History,” American Historical Review 108 (April 2003): 424–29CrossRefGoogle Scholar; in dealing with the third industrial revolution, the authors devote more attention to structure and less to process than was the case in their earlier publications dealing with the first and second industrial revolutions.

52 Most notorious of the turnaround experts is Al “Chain Saw” Dunlap, who tried to gloss his life and career in a poorly received autobiography, Mean Business (New York, 1996)Google Scholar. See the review by Roger Lowenstein, Wall Street Journal, 7 Oct. 1996. The SEC banned Dunlap permanently from serving as an officer of a public company over fraud charges. Wall Street Journal, 5 Sept. 2002. On Silicon Graphics' turnaround, see Wall Street Journal, 13 Apr. 1999; on United Airlines, see 9 Sept. 2003; and on an international turnaround, see 22 May 2005.

53 Magnusson, Lars, “The New Labour Market and the Third Industrial Revolution,” TUTB-SALTSA Conference (Brussels, 2000)Google Scholar.

54 Jeffrey G. Williamson, in “Winners and Losers Over Two Centuries of Globalization,” NBER Working Paper 9161 (2002), concludes there was a significant fall after 1980 in between-country inequality; see also the same author's “Globalization, Convergence, and History,” NBER Working Paper 5259 (1995). But looking at only the poorest countries yields a different conclusion. The World Bank's World Development Report 2003 (New York, 2003), 2Google Scholar, finds as follows: “The average income in the richest 20 countries is now 37 times that in the poorest 20. This ratio has doubled in the past 40 years, mainly because of lack of growth in the poorest countries.” On in-country inequality, see Jeffrey G. Williamson, “Globalization and Inequality Then and Now: The Late 19th and Late 20th Centuries Compared,” NBER Working Paper 5491 (1996).

55 In both the United States and the United Kingdom, services were growing faster than the GDP between 1990 and 2002. World Bank, World Development Indicators, 2004 (Washington, 2004), 184Google Scholar. In the U.K. in 2002, services made up 73 percent of the GDP; in the U.S. the figure was 75 percent. Although France was close, these were the highest figures for any of the major developed economies. For an excellent overview of the role of multinationals in the service sector, see Jones, Geoffrey, Multinationals and Global Capitalism: From the Nineteenth to the Twenty-first Century (Oxford, 2005), 109–44Google Scholar. Jones, who places the U.S. firms in an international context, refers to the service companies as “enablers of global capitalism.” For similar, but somewhat different, figures on service industries, see B. Elango and Ivan Abel, “A Comparative Analysis of the Influence of Country Characteristics on Service Investments versus Manufacturing Investments,” American Business Review (June 2004).

56 Culp, Christopher L. and Hanke, Steve H., “Empire of the Sun: An Economic Interpretation of Enron's Energy Business,” Policy Analysis 470 (20 Feb. 2003): 1–19Google Scholar.

57 Gordon Moore, a cofounder of Intel, predicted in 1965 that the number of transistors on a square inch of integrated circuit would double every year. He was close to the mark.

58 The subject of globalization has produced a remarkable outpouring of books and articles. Every week, new academic studies and edited volumes cross my desk. My last Google search for “globalization” produced well over three million references. “Globalization America” produced over a million. I am of course only able to sample an insignificant percentage of that material, and my references are meant merely to guide readers to some of the publications they may find useful in teaching and conducting research on modern institutions. On the impact of globalization, see Michael D. Bordo, Barry Eichengreen, and Douglas A. Irwin, “Is Globalization Today Really Different Than Globalization a Hundred Years Ago?” NBER Working Paper 7195 (1999); and Helleiner, Eric, States and the Reemergence of Global Finance: From Bretton Woods to the 1990s (Ithaca, 1994)Google Scholar. Believing that technology and market forces were not destiny, Helleiner develops a political history of financial globalization.

59 For a good sample of the literature, see Lechner, Frank J. and Boli, John, The Globalization Reader (Oxford, 2004)Google Scholar.

60 Mason, Edward S. and Asher, Robert E., The World Bank Since Bretton Woods: The Origins, Policies, Operations, and Impact of The International Bank for Reconstruction and Development and the Other Members of the World Bank Group: The International Finance Corporation, the International Development Association, The International Centre for Settlement of Investment Disputes (Washington, 1973)Google Scholar; Kapur, Devesh, Lewis, John P., and Webb, Richard, The World Bank: Its First Half Century, vol. 1: History (Washington, 1997)Google Scholar; Horsefield, J. Keith, The International Monetary Fund, 1945–1965: Twenty Years of International Monetary Cooperation (Washington, 1969)Google Scholar.

61 Milobsky, David and Galambos, Louis, “The McNamara Bank and Its Legacy,” Business and Economic History 24 (Winter 1995): 167–95Google Scholar.

62 de Soto, Hernando, in The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (New York, 2000)Google Scholar, argues persuasively that the key source of underdevelopment rests with the governmental and/or legal framework that prevents entrepreneurs in the underdeveloped countries from establishing clear title to their property and capitalizing it. For a different perspective but a similar conclusion, see Besley, Timothy and Burgess, Robin, “Halving Global Poverty,” Journal of Economic Perspectives 17 (Summer 2003): 3–22CrossRefGoogle Scholar, who point out that “the growth rate needed to halve poverty in sub-Saharan Africa between 1990 and 2015 is 28 times its historical average” (p. 9).

63 James, Harold, International Monetary Cooperation Since Bretton Woods (Washington, 1996)Google Scholar; see esp. 322–35, on conditionality.

64 Ibid.de Vries, Margaret Garritsen, The International Monetary Fund, 1972–1978: Cooperation on Trial, vol. 1: Narrative and Analysis (Washington, 1985)Google Scholar, writes: “In retrospect, 1973 can be seen as the economic turning point of the 1970s. The problems of inflation and balance of payments disequilibria in industrial countries that had developed in the late 1960s suddenly attained new dimensions” (p. 387).

65 Gilpin, Robert, The Challenge of Global Capitalism: The World Economy in the 21st Century (Princeton, 2002), esp. 134–62Google Scholar. James, International Monetary Cooperation, 309–46, fig. 11–1, compares private lending to developing countries with IMF drawings from 1976 through 1981. The trade in currencies has now reached $1.7 trillion a day. Wall Street Journal, 29 Sept. 2004, C3. According to Vines, David and Gilbert, Christopher L., eds., The IMF and its Critics: Reform of Global Financial Architecture (Cambridge, 2004), 2CrossRefGoogle Scholar: “All observers now believe that the IMF needs to change its position, at least in certain respects.”

66 Rich, Bruce, Mortgaging the Earth: The World Bank, Environmental Impoverishment, and the Crisis of Development (Boston, 1994)Google Scholar; Peet, Richard, ed., Unholy Trinity: The IMF, World Bank and WTO (London 2003)Google Scholar; and George, Susan and Sabelli, Fabrizio, Faith & Credit: The World Bank's Secular Empire (Boulder 1994)Google Scholar.

67 See, for instance, Rowntree, Les et al. , Globalization and Diversity: Geogaphy of a Changing World (Upper Saddle River, N.J., 2005)Google Scholar; Grunberg, Isabelle and Khan, Sarbuland, Globalization: The United Nations Development Dialogue: Finance, Trade, Poverty, Peace-Building (New York, 2000)Google Scholar; Offner, Amy et al. , eds., Real World Globalization: A Reader in Economics, Business and Politics from Dollars & Sense (Cambridge, Mass., 2004)Google Scholar.

68 Paradoxically, the opposition to globalization used modern IT to organize against the agents of globalization. For a brief discussion of the opposition, see Brown, D. Clayton, Globalization and America since 1945 (Wilmington, 2003)Google Scholar. See also Copeland, Brian R. and Taylor, M. Scott, “Trade, Growth, and the Environment,” Journal of Economic Literature 42 (Mar. 2004): 7–71CrossRefGoogle Scholar.

69 Barry Eichengreen, “Global Imbalances and the Lessons of Bretton Woods,” NBER Working Paper No. 10497 (May 2004). Eichengreen emphasizes the changes since 1970 and the instability of the new setting: “Today, like 40 years ago, the international system is composed of a core, which has the exorbitant privilege of issuing the currency used as international reserves, and a periphery, which is committed to export-led growth based on the maintenance of an undervalued exchange rate…. Now, with the spread of globalization, there is a new periphery, Asia, but the same old core, the United States, with the same tendency to live beyond its means…. [This system, he concludes,] is not long for this world.” OECD, “African Economic Outlook, 2002–2003” (Paris, 2003).Google Scholar

70 In the United States these alliances took, and still have, the form of “Iron Triangles”: one side consists of the organized interests receiving the support; a second is the government agency disbursing the subsidies or regulations; the third consists of the congressional committee or subcommittee that exercises control over the appropriations legislation and related laws. As the name implies, these triangles have been very hard to break down.

71 Economist, 28 Nov. 2003; Wall Street Journal, 15 Sept. 2003.

72 Wall Street Journal, 18 Nov. 2003, A2; 1 Dec. 2003, A3; 23 Feb. 2004, A1. Economist, 28 Nov. 2003.

73 While Becker, William H. and McClenahan, William M. Jr. end their study, The Market, The State, and the Export-Import Bank of the United States, 1934–2000 (New York, 2003)CrossRefGoogle Scholar, on an optimistic note, it seems clear from their account that the Bank will continue to be whipsawed by foreign competitors, U.S. firms, and the OECD.

74 Wall Street Journal, 24 Oct. 2004, A2.

75 See Eric Helleiner's discussion of “central bankers as a nascent transnational epistemic community,” in States and the Reemergence of Global Finance, 198–201.

76 Yergin, Daniel and Stanislaw, Joseph, The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World (New York, 1998)Google Scholar.

77 National oligopolies and the concentration levels of industries and the economy have been studied in detail; international oligopoly, however, for which there is no antitrust law other than the laws of separate nations and the EU, has not received the same attention. Scherer, F. M. and Ross, David, in Industrial Market Structure and Economic Performance (Boston, 1990)Google Scholar, provide an excellent survey of the national data and studies of performance.

78 Jones, Multinationals and Global Capitalism, 38–41. The figure on intrafirm trade had doubled since 1970.

79 On the commodity sector, see the recent changes that have taken place in aluminum. Wall Street Journal, 11 Aug. and 8 Oct. 2004. According to Datamonitor, “Global Aluminum: Industry Profile” (New York, May 2004)Google Scholar, “The leading five companies in the global aluminum market have developed a clear lead over their rivals and now control approximately a third of the market value share” (p. 13). On the beginnings of steel consolidation, see the Wall Street Journal, 26 Oct. 2004 On IT economies of scale, see Chandler, Alfred D. Jr., Inventing the Electronic Century: The Epic Story of the Consumer Electronics and Computer Industries (New York, 2001)Google Scholar.

80 See, for instance, Toniolo, Gianni, “Europe's Golden Age, 1950–1973: Speculations from a Long-run Perspective,” Economic History Review 51, 2 (1998): 252–67CrossRefGoogle Scholar.

81 Pier Angelo Toninelli, ed., The Rise and Fall of State-Owned Enterprise in the Western World; Boltho, Andrea and Toniolo, Gianni, “The Assessment: The Twentieth Century—Achievements, Failures, Lessons,” Oxford Review of Economic Policy 15, 4 (1999): 1–17CrossRefGoogle Scholar. See also Moss, David A., When All Else Fails: Government as the Ultimate Risk Manager (Cambridge, Mass., 2002), esp. 313–16, 327–30Google Scholar.

82 There is now a substantial literature on the large problems very successful organizations frequently have in coping with significant changes in their technological and economic environments. For examples, see Henderson, Rebecca and Clark, Kim B., “Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms,” Administrative Science Quarterly 35 (1990): 9–30CrossRefGoogle Scholar; Christensen, The Innovator's Dilemma; Graham, RCA and the VideoDisc.

83 Jensen, Michael C., “The Market for Corporate Control,” in Newman, Peter et al. , eds., The New Palgrave Dictionary of Money and Finance, vol. 2 (London 1992), 657–66Google Scholar.

84 Wall Street Journal, 1 Nov. 2004, B3.

85 Throughout this essay, I am using “liberal” in its American sense. In Europe and elsewhere, “liberal” refers to a market-oriented ideology à la Adam Smith. In the United States the same word refers to a political ideology that favors a greater role for government in economic and social affairs. Mark Blyth, in Great Transformations, 152–201, provides a lively analysis of “Disembedding Liberalism in the United States.” On President Ronald Reagan's role in this transition, see Skinner, Kiron K., Anderson, Annelise, and Anderson, Martin, Reagan: A Life in Letters (New York, 2003)Google Scholar.

86 Journal of Economic Perspective 2 (Spring 1988)Google Scholar, Symposium on Public and Private Unionization: Richard B. Freeman, “Contraction and Expansion: The Divergence of Private Sector and Public Sector Unionism in the United States,” and Melvin W. Reder, “The Rise and Fall of Unions: The Public Sector and the Private,” 63–110. See also Rogers, Joel, “In the Shadow of the Law: Institutional Aspects of Postwar U.S. Union Decline,” in Tomlins, Christopher L. and King, Andrew J., eds., Labor Law in America: Historical and Critical Essays (Baltimore, 1992), 283–302Google Scholar. Brown, Drusilla K. carefully examines the issues and the literature in “Labor Standards: Where Do They Belong on the International Agenda?” Journal of Economic Perspectives 15 (Summer 2001): 89–112CrossRefGoogle Scholar.

87 Jacobs, Meg and Zelizer, Julian E., “The Democratic Experiment: New Directions in American Political History,” in Jacobs, Meg, Novak, William J., and Zelizer, Julian E., eds., The Democratic Experiment: New Directions in American Political History (Princeton, 2003), 3–15Google Scholar. This essay provides an excellent guide to, and synthesis of, recent studies of U.S. political processes and structures by historians, political scientists, and sociologists. The chapter by Jacobs and Zelizer and the chapters on twentieth-century subjects bring the political elements of the organizational synthesis up to date. Zelizer uses the same distinction between structure and process that I employ; see Zelizer, Julian E., “Introduction,” in Zelizer, Julian E., ed., The American Congress: The Building of Democracy (Boston, 2004), xviiGoogle Scholar: “The periods of congressional history gain their flavor from the formal and informal ‘rules of the game,’ the process and the structures through which all participants operate and all decisions are made.” For a different perspective on the decline of the liberal movement, see Hall, Jacquelyn Dowd, “The Long Civil Rights Movement and the Political Uses of the Past,” Journal of American History 91 (Mar. 2005): 1233–63CrossRefGoogle Scholar.

88 For a brilliant essay on the shift in politics that began in the 1960s, see Heclo, Hugh, “The Sixties' False Dawn: Awakenings, Movements, and Postmodern Policy-making,” in Balogh, Brian, ed., Integrating the Sixties: The Origins, Structures, and Legitimacy of Public Policy in a Turbulent Decade (University Park, Penn., 1996), 34–63Google Scholar. Heclo describes a “post-Sixties policy culture that has institutionalized the distrust of institutions and their normative authority, whether in the public or private sector” (p. 58). See also Harris, Alice Kessler, In Pursuit of Equity: Women, Men, and the Quest for Economic Citizenship in 20th-century America (New York, 2001), 239–96Google Scholar.

89 For exceptions, see Hays, Samuel B., Beauty, Health and Permanence: Environmental Politics in the United States, 1955–1985 (New York, 1987)CrossRefGoogle Scholar; Balogh, Brian, Chain Reaction: Expert Debate and Public Participation in American Nuclear Power (New York, 1991)CrossRefGoogle Scholar; and, for an earlier period, Salyer, Lucy E., Laws Harsh as Tigers: Chinese Immigrants and the Shaping of Modern Immigration Law (Chapel Hill, 1995)Google Scholar. Some information on this issue is provided in Freeman, A. Myrick III, “Environmental Policy Since Earth Day I: What Have We Gained,” Journal of Economic Perspectives 16 (Winter 2002): 125–46CrossRefGoogle Scholar.

90 See, for example, Glied, Sherry, “Health Care Costs: On the Rise Again,” Journal of Economic Perspectives 17 (Spring 2003): 125–48CrossRefGoogle Scholar. Also see: Hacker, Jacob S., The Divided Welfare State: The Battle over Public and Private Social Benefits in the United States (Cambridge, 2002)CrossRefGoogle Scholar; Blank, Rebecca M., “Evaluating Welfare Reform in the United States,” Journal of Economic Literature 40 (Dec. 2002): 1105–66CrossRefGoogle Scholar. See also Claudia Goldin, “The Rising and Declining Significance of Gender,” NBER Working Paper 8915 (Apr. 2002); and the symposium, “Women and the Labor Market,” Journal of Economic Perspectives 14 (Fall 2000): 75–164Google Scholar. Julian E. Zelizer has taken on the tax issue in “The Uneasy Relationship: Democracy, Taxation, and State Building Since the New Deal,” in Jacobs et al., The Democratic Experiment, 276–300, where he concludes that opposition to taxation has been America's “clearest manifestation of antistatism” (p. 294). Of late, the major exercise in state-building has been in health care, where an aging population, soaring costs, effective lobbying organizations, and media support have accelerated the trend toward managed health care and have forced even conservative politicians to heed the call for political intervention. One of the central issues has become the cost of Pharmaceuticals. The debate over controlling pharmaceutical prices has brought to the surface the tension between a global system emphasizing efficiency and innovation and a national system ensuring equity and security. This larger struggle is taking place all over the world. For a pessimistic view of the struggle over health care in the United States, see Gordon, Colin, Dead On Arrival: The Politics of Health Care in Twentieth-Century America (Princeton, 2003)Google Scholar. On the shift in economics, see Morgan, Mary S., “Economics,” in The Cambridge History of Science, vol. 7: The Modern Social Sciences, Porter, Theodore M. and Ross, Dorothy, eds. (Cambridge, 2003), esp. 294–305Google Scholar.

91 See the lively survey by James Farr, “Political Science,” in Porter and Ross, eds., The Modern Social Sciences, 306–28. See also DiMaggio, Paul, “The New Institutionalism: Avenues of Collaboration,” Journal of Institutional and Theoretical Economics 154 (1998): 696–705Google Scholar; March, James G. and Olsen, Johan P., “The New Institutionalism: Organizational Factors in Political Life,” American Political Science Review 78 (Sept. 1984): 734–49CrossRefGoogle Scholar. Powell, Walter W. and DiMaggio, Paul J., eds., The New Institutionalism in Organizational Analysis (Chicago 1991)Google Scholar; Swenson, Peter A., “Varieties of Capitalist Interests: Power, Institutions, and the Regulatory Welfare State in the United States and Sweden,” Studies in American Political Development 18 (Spring 2004): 1–29CrossRefGoogle Scholar; and Weaver, Carolyn L., The Crisis in Social Security: Economic and Political Origins (Durham, 1982)Google Scholar. One of my favorite examples of the new blend of history and political science is Hargrove, Erwin C., Prisoners of Myth: The Leadership of the Tennessee Valley Authority, 1933–1990 (Princeton, 1994)CrossRefGoogle Scholar.

92 See, for example, Studies in American Political Development 17 (Spring 2003)Google Scholar, which includes articles on mid-nineteenth-century voting, the Progressive-era presidencies of Theodore Roosevelt and William Howard Taft, and a series of articles and commentary on “American Political Development” as a subdiscipline. The work of historian Julian E. Zelizer is important in this regard. See Taxing America: Wilbur D. Mills, Congress, and the State, 1945–1975 (New York 1998)Google Scholar; and On Capitol Hill: The Struggle to Reform Congress and its Consequences, 1948–2000 (New York 2004)Google Scholar.

93 (New York, 1982). I cited this book in Org Syn II, but it was not apparent at that time what an important transition it would mark in political studies. Ira Katznelson provides a balanced appraisal in “The Possibilities of Analytical Political History,” in Jacobs, Novak, and Zelizer, The Democratic Experiment, 381–400. See also Gourevitch, Peter A., “Reinventing the American State: Political Dynamics in the Post-Cold War Era,” in Katznelson, Ira and Shefter, Martin, eds., Shaped by War and Trade: International Influences on American Political Development (Princeton, 2002), 301–57Google Scholar. The chapter by Katznelson, “Rewriting the Epic of America,” 3–23, in this latter volume notes on page 7: “The neglect of international factors is pronounced in the subfield of APD [that is, American Political Development].

94 My position here is consistent with that of Manuel Castells in 1993, but not with his view in 2000, after he changed his mind about regionalization. He frames his revised position on the basis of trade patterns; my own conclusion is based upon the tremendous opportunities to exercise power through regional blocs. See Castells, The Rise of the Network Society, esp. 111–16; and Castells, , “The Informational Economy and the New International Division of Labor,” in Carnoy, Martin, ed., The New Global Economy in the Information Age: Reflections on our Changing World (University Park, Penn., 1993), esp. 24–27Google Scholar.

95 Hogan, Michael, The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947–1952 (New York, 1987)CrossRefGoogle Scholar.

96 Middlemas, Keith, Orchestrating Europe: The Informal Politics of European Union, 1973–1995 (London, 1995), 1Google Scholar.

97 Gaddis, John Lewis, Strategies of Containment: A Critical Appraisal of Postwar American National Security Policy (New York, 1982)Google Scholar; and by the same author, The Long Peace: Inquiries into the History of the Cold War (New York, 1987)Google Scholar.

98 The Papers of Dwight David Eisenhower, vols. 14–17. The Presidency: The Middle War (Baltimore, 1996), esp. 294–95,927–28,1354–55. and 1498–99Google Scholar. In the latter reference, Eisenhower said: “I simply cannot understand why the people of Western Europe, and particularly France, do not see that, unless they unite militarily and economically, they are doomed. To me there is no alternative but some form of unified government.” See also vols. 12 and 13, NATO and the Campaign of 1952 (Baltimore, 1989), especially 457–63Google Scholar, where Eisenhower discussed the plans to have a European Army: “I am certain that there is going to be no real progress toward a greater unification of Europe except through the medium of specific programs of this kind.”

99 The Papers of Dwight David Eisenhower, vols. 18–21: The Presidency: Keeping the Peace (Baltimore, 2001), esp. 128–29, 1799–1899, 2115–18Google Scholar. Eisenhower's presidential papers are now available on line, free and fully searchable, at http://www.eisenhowermemorial.org. Click on the presidential papers icon. See also Eckes, Alfred E. Jr. and Zeiler, Thomas W., Globalization and the American Century (Cambridge, 2003), 144–55Google Scholar; the authors see less tension than I do between regionalization and globalization (224–59).

100 Evenett, Simon J. et al. , eds., Antitrust Goes Global: What Future for Transatlantic Cooperation? (Washington, 2000)Google Scholar, reviews the cases. See also “Dangerous Activities,” Economist, 9 May 2002; and Wells, Wyatt, Antitrust and the Formation of the Postwar World (New York, 2002)Google Scholar.

101 As one of my astute referees noted, there are still important distinctions between the EU—where significant political and legal integration is taking place—and the U.S.-led economic consolidation through NAFTA and plans for the FTAA. At present, it is unclear whether political integration will follow economic integration in the case of the Western Hemisphere and of the Asian economies.

102 Estevadeordal, Antoni et al. , Integrating the Americas: FTAA and Beyond (Cambridge, Mass., 2004)Google Scholar. In that book, Kimberly Ann Elliot, “Labor Standards and the FTAA,” 641–72, takes an understandably skeptical position regarding the steps thus far to ensure that FTAA would promote uniform “core labor standards.” The Organization of American States has produced a guide. See Salazar-Zirinachs, Jose Manuel and Robert, Maryse, eds., Toward Free Trade in the Americas (Washington, 2001)Google Scholar. The contributors are of course upbeat. Barbara R. Kotschwar, for example, in “Standards and Technical Barriers to Trade,” writes, “Increasingly, a common base for hemispheric regulation of standards-related measures at the multilateral level is emerging, in fact as well as in word” (p. 161).

103 Galbraith, John Kenneth, American Capitalism: The Concept of Countervailing Power (Boston, 1956)Google Scholar; on coevolution, see Murmann, Johann Peter, Knowledge and Competitive Advantage.(New York, 2003)CrossRefGoogle Scholar. For a different perspective—one stressing fragmentation—see Ferguson, Niall, The Cash Nexus: Money and Power in the Modern World, 1700–2000 (London, 2001), esp. 369–86Google Scholar.

104 Frankel, Jeffrey A., Regional Trading Blocs in the World Economic System (Washington, 1997)Google Scholar.

105 Bergsten, C. Fred and Noland, Marcus, eds., Pacific Dynamism and the International Economic System (Washington, 1993)Google Scholar; Funabashi, Yoichi, Asia Pacific Fusion: Japan's Role in APEC (Washington, 1995)Google Scholar. For a less optimistic account, see Ravenhill, John, APEC and the Construction of Pacific Rim Regionalism (Cambridge, 2001)Google Scholar. The author asks, “Can APEC be Fixed?” and concludes that scaling down the group's objectives and thus eliminating “exaggerated expectations” may help an organization “whose achievements remain modest… “ (pp. 215–16, 222).

106 Castells, The Power of Identity, esp. 12–23, 108–67, analyzes the “Social Movements Against the New Global Order.” Castells sees a general conflict between “globalization and identity,” a set of categories that journalist Friedman, Thomas L. describes as The Lexus and the Olive Tree (New York, 1999)Google Scholar. Neither author offers much hope that the “resistance identities” (Castells, p. 8) will stem the tide of the new order, but Castells sees promise in the “turbulences,” the “incremental changes of symbols,” that occur “away from the halls of power” (pp. 427–28). My focus in this article is, of course, on the halls of economic and political power.

107 Huntington, Samuel P., “The Clash of Civilizations?” Foreign Affairs 72 (1993): 22–49CrossRefGoogle Scholar; Barber, Benjamin, Jihad vs. McWorld (New York, 1995)Google Scholar.

108 For an informative discussion of careers during that long era, see Mitch, David, Brown, John, and Leeuwen, Marco H. D. Van, eds., Origins of the Modern Career (Aldershot, U.K., 2004)Google Scholar.

109 For comparisons of the EU and the United States, see Bergström, Fredrik and Gidehag, Robert, “EU Versus USA” (Stockholm, 2004)Google Scholar.

110 See, for example, Robert J. Gordon, “Why Was Europe Left at the Station When America's Productivity Locomotive Departed?” NBER Working Paper 10661 (August 2004). As Gordon points out, the convergence of productivity figures has been reversed: in addition to working longer hours than Europeans, Americans are making more efficient use of their time, largely as a result of the IT revolution. See also by Gordon: “Exploding Productivity Growth: Context, Causes, and Implications,” Brookings Papers on Economic Activity 2 (2003): 207–96Google Scholar; “Hi-tech Innovation and Productivity Growth: Does Supply Create Its Own Demand?” NBER Working Paper No. 9437 (Jan. 2003); and “Two Centuries of Economic Growth: Europe Chasing the American Frontier,” NBER Working Paper No. 10662 (Aug. 2004). Gordon's conclusions about the post–1995 divergence are discussed and placed in context by Gianni Toniolo in “A Tale of Two Globalizations: Europe vs. America, 1860–2000,” a draft discussion held at Duke University on 16 Nov. 2004. For a recent effort to forecast the future of the United States and Europe, see Atlantic Council of the United States, “The Transatlantic Economy in 2020: A Partnership for the Future?” Policy Paper, Nov. 2004.