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Again, because of being an historian, and teaching history, and teaching business history for one of the very first courses, I believe, in that, as well as regular American and economic history, I was interested in the whole development of modern management, modern American industrial capitalism. And had a course that started with Benjamin Franklin, where there were no managers in the whole country, except a couple of plantation overseers, to watching the whole development through the years before the railroads, which created modern management, and all modern finance, labor organizations, and so on. Then following it through to the -- up to the Second World War.

And that was essentially my course, which they still have at the Business School. It’s The Coming of Managerial Capitalism. But the title was The Visible Hand: The Managerial Revolution in American Industry. And the idea of the visible hand, as opposed to Adam Smith’s invisible hand, was that management began to coordinate the flow of goods through the economy. The market determined it. People think I’m saying something that the market wasn’t there. The market’s very important. [Laughs] But instead of going through a producer, who then went to a wholesaler, who then went to a retailer, and bought from the outside, you begin to get integration. Not necessarily ownership, but you have—what was absolutely critical was the integration of production and distribution, marketing organization.

Then with the coming of the railroads, you could suddenly get modern business, modern industry. Because before the railroads and telegraph there was no way you could guarantee getting any kind of supplies anywhere on time, or any time. You couldn’t say, “Well, we’ll have them there around October 10th.” Once you did have that, then you had the infrastructure that made possible Carnegie, and the Rockefellers. And all within ten or fifteen years you got the big, modern firms. Then I watched those modern firms grow.

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Alfred Chandler