Published by EH.Net (March 2024).

Richard Langlois. The Corporation and the Twentieth Century: The History of American Business Enterprise. Princeton: Princeton University Press, 2023. xii + 799 pp. $50 (hardcover), ISBN 978-0691246987.

Reviewed for EH.Net by Amanda G. Gregg, Middlebury College.


In Alfred Chandler’s The Visible Hand, the American managerial corporation emerged to take advantage of economies of scale and scope in a unified domestic market. In The Corporation and the Twentieth Century, Richard Langlois revises this classic narrative as he chronicles twentieth-century American history, where the business corporation serves as a prism for understanding the development of American politics, technology, culture, and of course, economics and enterprise. This is a history of the corporation and the twentieth century in the United States, not just the corporation in the twentieth century.

Langlois aims to revise the classic Chandlerian argument on several dimensions. His narrative emphasizes a bi-directional process, the effects of politics and policy, and the impacts of large events for shaping the organization of enterprise. Langlois characterizes Chandler’s narrative of the dominance of the managerial corporation as too hermetic. Chandler often neglected critical outside forces that influenced corporate structure. Langlois emphasizes how wartime economic planning, restrictions on international trade through the Bretton Woods system, monetary policy, and antitrust shaped the structure of American business corporations. Antitrust is a particular bogeyman in the book: antitrust enforcers’ longstanding distrust of nonstandard contracting often pushed firms to integrate horizontally and vertically.

Echoing Coase (1937), Langlois explains that the large, vertically integrated, managerial corporation emerged and succeeded in environments in which markets functioned poorly. When markets became more connected after the end of Bretton Woods, these large corporations no longer dominated. A similar argument appears in Lamoreaux, Raff, and Temin (2003), whose framework arranges economic arrangements along a one-dimensional scale, ranging from one-shot transactions to pure hierarchy, with long-term relationships forming an important and too-often neglected middle. Both extremes can suffer from important information problems: long-term relationships can somewhat mitigate the uncertainty from one-shot interactions and the principal-agent problems of pure hierarchy. Long-term contracting also occupies a central position in Langlois’s narrative: antitrust regulators often demonized these kinds of nonstandard contracts.

Langlois guides the reader through this vision in an introduction, eight hefty narrative chapters, and an epilogue. The first body chapter, “Origins,” begins with a brisk account of American economic and business history since the Civil War, focusing on the “three pillars” of nineteenth-century American political economy: “the gold standard, the protective tariff, and the political construction of a national market” (p. 24). Discussing the Sherman Antitrust Act and the Great Merger Wave, the book also introduces one of its central motifs, the interaction of antitrust enforcement and corporate organization.

For Langlois, the root of many misguided American policies has been progressive thinking (Chapter 3, “The Progressive Era”). This chapter covers a lot of ground, from the Pure Food and Drug Act through trust-busting, the Northern Securities decision, a defense of pyramiding, the founding of the Fed, and the Clayton Act. A highlight is the dramatic confrontation of George Perkins and Louis Brandeis at the Committee on Interstate Commerce in 1911, which underscores two divergent strands of Progressivism, each misguided. Perkins, a progressive with ties to International Harvester and US Steel, sounds like Chandler, pointing out how improvements in communication and transportation made antitrust enforcement “disastrous for modern business, which relies on planning and control” (p. 83). For Perkins, markets represented chaos. Brandeis also mistrusted the market but advocated for stronger antitrust action. To Brandeis, an unregulated market would naturally lead to monopoly (p. 84). Brandeis’s desire to regulate not only organizational outcomes but also business practices ultimately influenced the Clayton Act.

In Chapter 4, “The Seminal Catastrophe,” Langlois argues that the Great War encouraged American firms to integrate because of the urgent needs of the war effort and government interference in markets. The subsection on “wartime socialism” provides a fascinating account of how American industry supplied the war. The war ended, and the American economy demobilized (Chapter 5, “Interlude”). A postwar recession ensued, and firms adapted anew to withstand the pressures of the market. One adaptation was the multidivisional form, or M-form (p. 150). But Langlois argues that these examples of increasing integration are exceptional: “by the middle of the decade, the trend toward vertical integration had decisively reversed, generating an increasing deverticalization of production” (p. 156). Meanwhile, while some historians have characterized the 1920s as an era of neglect in antitrust, Langlois argues that “many of the changes in this era…were sensible…reforms” (p. 163), for example allowing trade associations to discuss codes of behavior. Meanwhile, other important technological and organizational innovations impacted daily life, for example the invention and proliferation of radio and the emergence of chain stores.

The Great Depression (Chapter 6, “The Real Catastrophe”) encouraged integration through two forces: banking contraction, which hurt small firms’ ability to access credit, and large-scale government meddling in market forces. Markets did not function well. Returning to a major theme, progressive thinking permeated the policy response to the Depression. Hoover reflected Progressive ideology in his asking industrialists not to cut wages, his efforts to prop up agricultural incomes, and the Smoot-Hawley Tariff (which, even if it did not cause the Depression, did not help). Here the chapter charts the story of Prohibition and its repeal as background for Roosevelt’s presidential win and the ensuing shift in economic policy, especially monetary policy (devaluing the dollar). An important figure in Roosevelt’s administration was Adolf Berle, who with Gardiner Means wrote The Modern Corporation and Private Property. Langlois reminds us that “Berle and Means were not in fact principally concerned with agency problems between managers and stockholders” but instead about the power of those who select the board of directors (p. 212). From this backdrop, we see important regulatory changes with consequences for corporations, including the birth of the SEC (p. 221) and ending pyramidal holding companies in utilities (p. 222). Two cornerstone policies of the New Deal particularly obstructed the functioning of markets: the AAA and the NIRA. However, in a silver lining, “the Depression nevertheless set in motion a technological revolution in industry” (p. 233) in the form of in-house research laboratories. These laboratories were not merely an outgrowth of the M-form, as Chandler had argued, but also a result of the poor functioning of the market and as firms generated new products to use their excess capacity (p. 237).

Then, with these institutional changes in place, the United States geared up for the Second World War (Chapter 7, “Arsenal Again”). The chapter opens not with war mobilization but with policy responses to the 1937 downtown. Here the Roosevelt administration focused on deficit spending and antitrust enforcement, blaming firms for raising costs and prices. Thurman Arnold, who turned antitrust “into a bureaucratic machine” (p. 270) further broadened the scope of antitrust. Langlois argues that the consumer standard of antitrust truly originated with Arnold, not the Chicago School (p. 270). Arnold was also particularly suspicious of vertical relationships established via contract. Moving into the buildup to war, the early years are portrayed as chaotic until planning transitioned to a system where the War Production Board, not producers, set priorities and reformed it into the Controlled Materials Plan. (p. 285). This chapter’s account of wartime technology deserves re-reading.

Emerging from the Second World War, American firms occupied a unique position in history, as foreign competition was essentially destroyed by the war. This complex chapter (Chapter 8, “The Corporate Era”) argues that the large vertically integrated corporation of the postwar era emerged because of two forces: the Bretton Woods system, whose capital controls stifled international capital markets, and newly vigorous antitrust enforcement that was especially suspicious of nonstandard contracting. Firms organized production internally. Langlois throws considerable shade on Judge Learned Hand’s decision that Alcoa sought monopoly through its good performance and the government’s antitrust prosecution of A&P for its vertical structure. Then again, this period also saw the origin of the Structure-Conduct-Performance paradigm in the 1960s and 1970s. Moreover, while there were some positive technological spillovers from the war, the war was overall hugely disruptive to markets. When the war ended, firms refocused on eager consumers. I enjoyed Langlois’s defense of suburbs against cultural critics and his impassioned critique of urban renewal and the corporate history of the transistor and the early days of computing.

Langlois’s considerable gifts for explaining the history of technology especially shine in Chapter 9, “The Undoing,” which documents the unraveling of corporate structure in the era following the end of Bretton Woods. In conglomerates, Langlois argues that the “spread of managerial capitalism and the separation of ownership from control would be their own undoing” (p. 410). Once again antitrust lurks behind changes in corporate behavior. Because of antitrust policy, firms avoided acquiring related activities and instead diversified into unrelated activities, often performing poorly. The large and clunky American conglomerates began to face more nimble competitors. The Rust Belt declined as crises emerged in industries like steel and automobiles. Toyota, Nissan, and GE found success with new managerial ideas. GE moved away from the M-form (p. 457). World markets became more integrated with deregulation in railroads and airlines and the widespread adoption of shipping containers. Antitrust softened under Reagan, and the FTC dropped its case against IBM. Once the chapter examines Silicon Valley, Langlois moves quickly in explaining the history of key players like Intel, Apple, IBM, Google, eBay, Amazon, Dell, Walmart, and Netscape. The chapter ends with the FTC’s suit against Microsoft, which ended with a settlement but no breakup (p. 518), thus ending Langlois’s grand narrative of the twentieth century.

The book’s epilogue (“Then and Now”) brings us to the present day, from the Dotcom bubble through the 2008 crisis and onto cloud computing, the gig economy, and the current “Neo-Brandeisian” political turn in antitrust, particularly as it concerns large tech firms like Amazon. The book ends by underscoring the decline in the large public corporation, for example evinced by the proliferation of startups (p. 550). Completing the story by moving beyond the twentieth century, Langlois writes, “The twenty-first century has witnessed the end of the large managerial corporation as a centerpiece of American life” (p. 551).

The length of this review gives a sense of the length and complexity of the book. Like Chandler himself, Langlois is prone to detailed storytelling. The final chapter, perhaps the best in the book, is over 100 pages long, and others exceed 50 or 60 pages. I am of two minds about this rhetorical style. On the one hand, I found myself gleefully monologuing stories from the book to all willing nearby victims. The richness reflects reality, shaped by individuals in their circumstances. Many examples from the book will be helpful for teaching. On the other hand, I could not always connect each detail to the book’s intricate arguments and their interrelated moving parts. Langlois’s epic account of the American corporation requires some patience and concentration, but its value is hard to overstate.


Chandler, Alfred. The Visible Hand. Cambridge: Harvard University Press, 1993.

Coase, Ronald H. “The Nature of the Firm.” Economica 4, no. 16 (1937): 386-405.

Lamoreaux, Naomi R., Daniel MG Raff, and Peter Temin. “Beyond Markets and Hierarchies: Toward a New Synthesis of American Business History.” American Historical Review 108, no. 2 (2003): 404-433.


Amanda Gregg is an Associate Professor of Economics at Middlebury College. She is currently working on a project on Imperial Russian corporate governance with Steven Nafziger, a paper on the slave trade with Anne Ruderman, a project on agricultural transformation in New England, and a new project on the American guitar industry.

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