The American Structural Revolution Inventing the Corporate System of Industrial Production
If the Lord had intended things to be big, he would have made man bigger--in brains and in character . . . . I have considered and do consider that the proposition that mere bigness cannot be an offense against society is false, because I believe that our society, which rests upon democracy cannot endure under such conditions.
Louis D. Brandeis1
Fathers of the American Constitution and Thomas Jefferson in particular had identified freedom as a constitutive element of the future American social and economic space. In sparsely populated and essentially rural territories, the ideal typical situation of many individual and independent entrepreneurs, competing healthily in a mostly unregulated environment, seemed a legitimate ambition. Such a 'proprietary-competitive' type of capitalism appeared to embody freedom, the very spirit of the new Nation. 2 The small firm, through which the individual acquired the means--essentially independence, wealth, and social status--of his freedom, was an economic but also a moral entity. The small firm, like motherhood and apple pie, was the stuff of the American dream. In a short period of time, though, during those years bridging the nineteenth and twentieth centuries, the economic component of the American dream would come to be radically redefined. By the 1920s, 'big' was undeniably becoming 'efficient', if not always 'beautiful', in American industry. A corporate version of capitalism, increasingly regulated at the federal level, was pushing the small producer republic to the periphery of the national economy. Emerging within the context of significant economic and technological disruptions, corporate capitalism had also been shaped within particular historical and institutional conditions. The reconstruction of American capitalism, or the invention of the corporate system of industrial production, was in fact a fairly messy process, revealing social and political confrontations as much as it was reflecting economic and technological evolutions. The institutional environment, particularly in its political and legislative dimensions, set significant constraints. Still, the multiplicity of actors, characterized by bounded rationalities as well as divergent and complex motives, meant that unintended and contingent developments were not rare.
There were three main stages to the emergence of corporate capitalism in the