Stages in Historiography (historical analysis) of anti-trust>>>>>>(Lecture? + Kolko, McCraw readings) Not only was there a backlash against the bigness of "Big Business", but BB continue to grow in scale regardless. 1890 - SHERMAN ANTI-TRUST ACT 1888 NJ law allowed corp mergers 1914 CLAYTON ACT, FEDERAL TRADE COMMISSION ACT Classic Progressive view: Teddy Roosevelt as Trust-Buster, lead popular interests against business interests, food regulation, conservation... 1950s: R. Hofstadter began emphasizing some of the shortcomings of the Progressive Era. While middle-class citizens supported progressivism, support from the working class was less visible. Also, he made connections between populism & later Nazism and McCarthyism as potentially dangerous majority-tyranny movements. He theorized that middle-class support for Progressive regulation was not so much goodwill towards the working class, but to control the backlash against Big Business; it was anti-modern, whatever that means. 1960s-70s: G.Kolko: TR distinguished, rather arbitrarily, between "good" and "bad" trusts, mostly based on personal relationships that led him to evaluate leaders of the "good" trusts as fundamentally good people. Ultimately, TR believed that trusts were inevitable given the economic changes of the day. Furthermore, the Bureau of Corporations did not conduct third-party investigations, but obtained data from the companies themselves and were relatively lax when they cooperated. Also, meat regulation was again aimed to contain worker unrest; conservation movement aimed to manage resource use efficiently but not to protect them outright. 1970s-80s: "New Revisionism" & T. McCraw's representation of "new school" perspective. He believed that, due to the unsophisticated understanding of economies of scale at the time, it was difficult to tell when antitrust laws were being validly enforced, and when they were just restricting business unnecessarily. McCraw criticized Justice Brandeis' rigidly anti-Big Business stance and notion that Bigness bred inefficiency. This analysis is in line with the Reagan era's generally pro-business stance. Significance: American cultural ambivalence and confusion towards Big Business...interpretation of antitrust legislation/the Progressive Era of late 1800s/early 1900s depended heavily on the outlook of each of the eras that followed. • LOVE/HATE • FEARS/HOPES Business attitudes. Impacts on market structure.... Americans have largely learned to live with imperfect competition. Rule of Reason>>>>>>(Lecture) 1911 Standard Oil case was a significant application of Rule of Reason; that is, not targeting structural monopoly but whether the firm in question was clearly unreasonably, abusively restricting free trade. (The doctrine, therefore, justified not breaking up structural monopolies.) 1917 FTC investigation of the meatpacking industry>>>>>>1917-18 Meatpacking industry. Big 5 firms, high barriers of entry, economies of scale, vertically integrated. However, the FTC found no evidence of price-setting at monopoly levels (b/c their product was being sold more cheaply than smaller producers), nor any proof than they were abusing their power. 1920: the companies agreed to divest some assets, but allowed to continue operating its largescale warehouses, refrigerated cars, etc., had to promise not to enter non-meat food categories. (While the FTC had more experience and thus conducted more sophisticated analysis than Roosevelt's Bureau of Corporations, third-party auditors are inevitably dependent on firms' cooperation for research data.) Key Elements of Sloan's Strategy for dealing with GM Crisis>>>>>>(Sloan reading) Key problems • No coordination • No internal transfer pricing Outcome: +MULTIDIVISIONAL ORGANIZATIONAL STRUCTURE • Divisions based on product line • Each division has its own organizational structure based on function • e.g. sales, operations, finance, R&D +CENTRALLY PLANNED PRODUCT STRATEGY +Interdivisional committee structure • Executive committee, Operations committee, Finance committee, General Technical committee, etc + Management accounting system • Operating divisions created forecasts and report results on • Annual/monthly input output data • Annual monthly demand data