My impression felt from the very first pages of Richard Langlois's book was confirmed by my reaction at the end of reading it: “If only it had been published sooner, how useful this book could have been for my previous research on the history of the theories of the firm!” Without a doubt, its historical account of both facts and ideas dedicated to the American business enterprise in the twentieth century fills a gap in the academic literature. Considered as a synthesis of the literature on American corporations, the book lives up to its main promise. Researchers and students in history, economics (particularly in law and economics or the history of economic thought), and management will find it to be a highly valuable resource. Libraries devoted to the social sciences and the humanities should not hesitate to make it available to their users.
Endorsing the analytical framework of transaction cost economics—a “revolution,” according to Langlois (272)—the book provides a reconstruction of the history of major American corporations. Yet, this analytical framework remains subtly in the background of the narrative. At the forefront are the individual trajectories of enterprises, which are often intertwined, in key sectors of the American economy. From financial corporations (like J. P. Morgan) and industrial giants (such as GE and AT&T) of the Progressive Era to today's tech behemoths such as Google and Amazon (aka GAFAM), passing through the Big Three of the car industry, Langlois tells the (hi)story of these firms within their macroeconomic, legal, political, international, and technological contexts. Through that lens, the book also serves as a parallel history of economic and political ideologies, particularly highlighting the shifts in normative considerations regarding corporations in economic theory and antitrust policy. Finally, this history leads to an analysis of the broader transformations in American society, from a supply-side rather than consumer point of view, through the history of the railroad, aerospace, automobile, radio, television, and computer industries, among others.
Langlois revisits the history of the American firm in the twentieth century by partially following in the footsteps of Alfred Chandler, while rejecting the main thesis of “managerialism”: The managerial revolution “was underpinned not by the inherent superiority of administrative planning in all times and places but rather by its contingent superiority in a specific set of historical circumstances” (5). The stories of the several businesses presented in the book aim at supporting this thesis, which serves as a common thread. The main strength of the argumentation is to show how the dynamics of corporate movements of integration and disintegration resulted from a combination of factors. In addition to the technological dimension of the production process at stake, Langlois systematically emphasizes how public regulation, in particular antitrust policies, affects transaction costs so that it generates sector-specific responses from enterprises in terms of their choices related to industrial organization, financial integration, and innovation. To give only one example, he highlights that it was “coupled with the capital controls of Bretton Woods and other restrictions” that the “antitrust hostility to international cartels helped create the large vertically integrated multinational corporation of the postwar era” (331).
An intellectually valuable resource if one wishes to navigate it with a specific purpose in mind, reading The Corporation and the Twentieth Century in its entirety, however, may prove cumbersome. In terms of structure, the length of the chapters and sections, as well as their sometimes poor organization, makes the argument somewhat disjointed. Too often, there are successive descriptions of the dynamics of three or four companies within the same sector, without drawing broader generalizations, so that Langlois's main points are drowned in a mass of details. This is all the more unfortunate since this book offers a synthesis. Because it is a juxtaposition of stories of enterprises, the narrative sometimes struggles to be convincing. And when the restatements of the main thesis occur, they appear in the form of “sound bites” that come at the end of long pages of factual description. As a consequence, these sentences sometimes appear as value judgments rather than firm conclusions derived from a rigorous historical analysis or the secondary literature. This impression is reinforced by editorial norms, since the only evidence for many judgments is a simple endnote with most of the time just an author-date citation.
A critique of the editorial practices, not of Princeton University Press, but of too many American and British publishers, in economics and more generally the social sciences and humanities, is indeed required. The widespread practice of excluding citations from the running text combined with that of using endnotes (rather than footnotes) that in turn require the reader to consult a bibliography is scientifically problematic. The researcher inevitably loses the thread of the argument, having to jump to the end to search the endnotes and then to jump to the bibliography to fully identify the secondary literature on which Langlois bases his claims. No fewer than three bookmarks are required! While there might be a trade-off between reader pleasure and scientific convenience in this type of documentation, the current mainstream solution in the English-speaking editorial landscape is not the optimal one. It even creates confusion. For example, on page 152, Langlois discuss some claims made by Chandler and Drucker. The reader believes that a quotation comes from Peter Drucker when it is actually made by Oliver Williamson. On too many occasions, it is difficult to discern when Langlois is reiterating the words of others versus when he is speaking on his own behalf with (or without) others’ words.
To conclude this review, I am sure that historians of economic thought will also find some flaws in the book, notwithstanding its usefulness. The presentation of economists’ works may be considered overly simplified on various occasions (e.g., in Langlois's discussions of IO). Overall, these simplifications are fairly acceptable. But, some concepts are presented too imprecisely, so that it prevents a good understanding. For example, John Maurice Clark's concept of “workable competition” is (erroneously) presented as “a rough-and-ready approximation of perfect competition,” so that it is impossible to understand on the next page why Clark thought that “ the rigorous model of ‘pure and perfect competition’ offers no basis for antitrust policy” (345–46). Finally, the selection of secondary sources is sometimes surprising. While recent sources are mobilized on certain topics, they are completely overlooked in other cases. Given the scope of his subject and the scholarship he demonstrates, one cannot accuse Langlois of a lack of knowledge. But the absence of methodological justification for how he constructed his corpus raises some concerns about potential selection biases.
