Lamoreaux, N. History of American Enterprise

Economics 184: History of American Enterprise
Fall, 1997

Prof. N. Lamoreaux
9268 Bunche
email:  lamoreaux@econ.ucla.edu
Office hours:
Mon., 1:30-3:00 PM
Wed., 9:00-10:30 AM
(or by appointment)

The purpose of the course is to understand the dynamics of innovation in the 
American economy by studying historical examples.  The course will use the 
long sweep of American history to explore the shifting role in economic 
development played by markets, firms, and what are alternatively called 
networks or systems.  The first part of the course will use standard 
neoclassical tools to understand innovative behavior in the small-firm world 
of the early nineteenth century.  By the late nineteenth and early twentieth 
centuries, firms had grown much larger, and in the second part of the course 
we will use their experience to explore the various arguments that have been 
made about the role of large-scale enterprises in economic growth.  Although 
the first two parts of the course will also deal with issues of finance, 
government regulation, and location-specific supports for innovation, in the 
third part of the course we will explicitly broaden the discussion beyond 
individual entrepreneurs and firms to deal with such topics as the effect of 
government regulation on innovative activity, the rise of Òindustrial 
districtsÓ like the Silicon Valley, claims about the declining competitiveness 
of the American economy, and the concept of national innovation systems.

Part I: The Small-Firm Economy of the Early Nineteenth Century

Sept. 26: Introduction to the Course
Alfred D. Chandler, Jr., The Visible Hand, pp. 1-78*

Sept. 29: Theories of Entrepreneurship: the Supply Side
Joel Mokyr, The Lever of Riches, pp. 273-299**

Oct. 1: The Demand Side
Kenneth L. Sokoloff, ÒInventive Activity in Early Industrial America,Ó Journal 
of Economic History, 48 (Dec. 1988), pp. 813-50**
B. Zorina Khan and Kenneth L. Sokoloff, ÒSchemes of Practical Utility,Õ Ó 
Journal of Economic History, 53 (June. 1993), pp. 289-307**

Oct. 3: The Labor Scarcity Thesis
H. J. Habakkuk, American and British Technology in the Nineteenth Century, pp. 
11-63**

Oct. 6: The American System and the Role of the Military
David A. Hounshell, From the American System to Mass Production, pp. 
15-65**

Oct. 8: Networks of Inventors
Anthony F. C. Wallace, Rockdale, pp. 186-239**

Oct. 10: Collective Invention
Judith McGaw, Most Wonderful Machine, pp. 117-157**

Oct. 13: Financial Institutions
Naomi R. Lamoreaux, ÒInformation Problems and BanksÕ  Specialization in 
Short-Term Commercial Lending,Ó in Peter Temin, ed., Inside the Business 
Enterprise, pp. 161-203*

Oct. 15: Why Not the South?
Gavin Wright, The Political Economy of the Cotton South, pp. 89-127**

Oct. 17: First Midterm Examination

Part II: The Rise of Big Business

Oct. 20: New Theoretical Issues:  Transactions Costs and Agency Problems
Daniel M. G. Raff and Peter Temin, ÒBusiness History and Recent Economic 
Theory,Ó in Temin, ed., Inside the Business Enterprise, pp. 7-40*

Oct. 22: The Railroads:  The First Big Business
Chandler, The Visible Hand, pp. 81-205*

Oct. 24: The Integration of Mass Distribution with Mass Production
Chandler, The Visible Hand, pp. 209-314*

Oct. 27: The Great Merger Movement
Chandler, The Visible Hand, pp. 315-376*
Tony Freyer,  ÒLegal Restraints on Economic Coordination,Ó in Naomi R. 
Lamoreaux and Daniel M. G. Raff, eds.,  Coordination and Information, pp. 
183-205.*

Oct. 29: American Commercial Banking vs. German Universal Banking
Charles W. Calomiris, ÒThe Costs of Rejecting Universal Banking,Ó in 
Lamoreaux and Raff, eds., Coordination and Information, pp. 257-321.*

Oct. 31: Finance Capital
J. Bradford DeLong, ÒDid J. P. MorganÕ s Men Add Value?Ó in Temin, ed., Inside 
the Business Enterprise, pp. 205-49*

Nov. 3:Learning to Manage Information
Margaret Levenstein, ÒThe Use of Cost Measures,Ó in Temin, ed., Inside the 
Business Enterprise, pp. 71-116*
JoAnne Yates, ÒInvesting in Information,Ó in Temin, ed. Inside the Business 
Enterprise, pp. 117-59*

Nov. 5: Learning to Manage Competition
Naomi R. Lamoreaux, The Great Merger Movement, pp. 118-158**
Margaret Levenstein, ÒMass Production Conquers the Pool,Ó Journal of 
Economic History, 55 (Sept. 1995), pp. 575-611**

Nov. 7: Learning to Manage Workers
Daniel M. G. Raff, ÒThe Puzzling Profusion of Compensation Systems in the 
Interwar Automobile Industry,Ó in Lamoreaux and Raff, eds., Coordination and 
Information, pp. 13-33.*
Daniel Nelson, ÒIndustrial Engineering and the Industrial Enterprise, 
1890-1940,Ó in Lamoreaux and Raff, eds., Coordination and Information, pp. 
35-53.*

Nov. 10: Learning How to Manage
Chandler, The Visible Hand, pp. 381-500*
W. Bernard Carlson, ÒThe Coordination of Business Organization and 
Technological Innovation within the Firm,Ó in Lamoreaux and Raff, eds., 
Coordination and Information, pp. 55-99*

Nov. 12: Learning to Manage Technology
Naomi R. Lamoreaux and Kenneth L. Sokoloff, ÒInventors, Firms, and the Market 
for Technology,Ó forthcoming paper**
David C. Mowery, ÒThe Boundaries of the U.S. Firm in R&D,Ó in Lamoreaux and 
Raff, eds., Coordination and Information, pp. 147-182*

Nov. 14: Second Midterm Examination

Part III: Worries about Competitiveness

Nov. 17: The Standard View of Government Regulation
Thomas K. McCraw, Prophets of Regulation, pp. 222-299**

Nov. 19: An Alternative View of Regulation
Sally Clarke, ÒNew Deal Regulation and the Revolution in Farm Productivity,Ó 
Journal of Economic History,Ó 51 (Mar. 1991), pp. 101-123**
Kenneth A. Snowden, ÒThe Evolution of Interregional Morgage Lending 
Channels,Ó in Lamoreaux and Raff, eds., Coordination and Information, pp. 
209-255*

Nov. 21: Big Business Woes
H. Thomas Johnson, ÒManaging by Remote Control,Ó in Temin, ed., Inside the 
Business Enterpise, pp. 41-69*
Michael C. Jensen, ÒEclipse of the Public Corporation,Ó Harvard Business 
Review, 67 (Sept.-Oct. 1989), pp. 61-74**

Nov. 24: Do Firms Develop Special Capabilities?
David A. Hounshell, ÒAssets, Organizations, Strategies, and Traditions,Ó 
forthcoming paper**
Daniel M. G. Raff and Peter Temin, ÒSears Roebuck in the Twentieth Century,Ó 
forthcoming paper**

Nov. 26: Flexible Production and Industrial Districts
Michael J. Enright, ÒOrganization and Coordination in Geographically 
Concentrated Industries,Ó in Lamoreaux and Raff, eds., Coordination and 
Information, pp. 103-46*

Nov. 28: Thanksgiving Holiday

Dec. 1: Networks of Information
Louis Galambos and Jeffrey L. Sturchio, ÒSustaining Innovation,Ó forthcoming 
paper**

Dec. 3: National Innovation Systems
David Mowery, ÒThe U.S. National Innovation System,Ó Research Policy, 21 
(April 1992), pp. 125-144**
David Mowery and Nathan Rosenberg, Technology and the Pursuit of Economic 
Growth, pp. 169-202**

Final Exam as Scheduled

Course Requirements and Grading:

All reading assignments should be completed by the date in which they appear 
on the syllabus, and students should bring copies of dayÕ s readings to class. 

There will be two in-class midterm examinations, as well as the regularly 
scheduled final examination.  Each of the midterms will count for one fourth 
of the final grade, and the final examination will count for one half.  

In addition, I expect students to attend class and participate regularly in 
discussions. Students who participate actively and intelligently in 
discussions throughout the quarter will receive a boost of up to 5 percentage 
points in their final grades. 

Notes:

*Available at the UCLA Bookstore.  Also on reserve at Powell Library.

**In a course packet available at the UCLA Bookstore.  The packet is also on 
reserve at Powell Library.