Managerial Capitalism and Public Policy

Business historians know that public policy--the mix of law, public administration, and politics--has had an important impact on the development of the American business system. The scholarly issue, of course, is how important, and in what ways in particular. Business and economic historians have produced a rich literature on the place public policy had in building a transportation infrastructure in the nineteenth century. And there is a growing literature on the role of government in regulating (and promoting) the important transportation, communication, energy, financial, agricultural, and defense industries in the twentieth century [28, pp. 33-55; 40, pp. 10-35; 29]. The role of public policy in the origins and development of the largest 100 or so professionally-managed industrial corporations--the pitome of managerial capitalism--has not until recently been accorded the same degree of attention that these other sectors have received. This paper is directed to the impact of federal antitrust and labor policy on the largest industrial corporations. The focus will be on the 1890 Sherman and the 1950 Cellar Kefauver antitrust acts, and the National Labor Relations Act of 1935 [6, 32, 15, 91 . Examining the extent to which public policy has affected the development and behavior of industrial corporations has taken on some urgency as the past successes of corporate America have been dimmed by almost two decades of troubling economic change in the face of sharp 6erman and Japanese competition [8, 43]. Why the United States lost its competitive dge in leading firms in critical industries is a large topic that will occupy business historians for some time. In view of the urgent interest in competitiveness, it should be clear that understanding the impact of past public policy on the largest industrial corporations i not a limited academic exercise. To make intelligent recommendations about what, if anything, government can or should do to affect corporate managers' short or long-term behavior, those who make policy should have a good sense of how public policy has affected the professionally-managed in ustrial corporation in the past. To be sure, unlike Japan, Germany, and France the United States did not develop a capitalism marked by frequent direct intervention in the industrial sector by a powerful professional civil service, removed from the