|TWA and Frank Lorenzo found out at Continental and Eastern). One who hoped to succeed would fear that other rivals would react to success by moving along the oligopolist's "kinked" demand curve to lower its price and tighten its own workplace, leaving the takeover entrepreneur with no profits, many expenses, and a chance of failure. When international competition, a strong dollar in the 1980s, and technological change took away the oligopoly and made it clear that firms had to react or would fail, then takeovers became more plausible. 61 Moreover, until conglomerates were widespread, managers didn't believe that corporate divisions could be moved around like pieces on a game board. This is not to say that perceptions of oligopoly were the only explanation for the lack of 1950s takeovers, but it is an underrecognized explanation.|
Thirty-five years after the first volume on the corporation in modern society, some of those colossuses look now and again like dinosaurs: big, ferocious, and maybe on the verge of being naturally selected out. What happened is obvious: the reconstruction of Europe and Japan forced the colossuses to compete in the international arena; an accelerating pace of technological change made old structures obsolete and brought forth new domestic competitors. While many of the old industrial firms were, or became, fit to compete in the new international arena and to ride the waves of new technological change, some weren't. Even the fit ones have to sweat to survive and cannot relax as they did four decades ago. The notion of the rule of law to control corporate power faded, and the legal questions began to focus on whether law plays some role in hindering, or enhancing, corporate competitiveness.
Thanks go to Victor Goldberg, Harvey Goldschmid, Jeffrey Gordon, William Kenneth Jones, John Kasdan, and Milton Handler for comments on a prior draft.