Kenneth Lipartito

System Building at the Margin: The Problem of Public Choice in the Telephone Industry

This article considers whether natural monopoly conditions or AT&Ts market power was responsible for the formation of a single, standardized network in the United States telephone industry. It shows that AT&T was able to move the industry towards a single system under its management through a strategy of competition and compromise with competitors. The article also examines the impact of AT&Ts actions on state regulators, concluding that public officials, lacking necessary knowledge and authority to set policy, ended up supporting AT&Ts position in the industry.

What Have Lawyers Done For American Business? The Case of Baker & Botts of Houston

Although lawyers made crucial contributions to the development of business, scholars have said little about their role. As the following article explains, lawyers fought restrictions on business growth, worked to make laws uniform, and helped to establish legal rules in the areas of corporate reorganization, finance, and regulation. Pioneering a new type of organization—the large firm—they moved beyond the realm of legal doctrine and acquired the political influence, local knowledge, and community connections needed to reform the nations decentralized legal system in ways that fit the demands of national-scale business.

The Future of Alfred Chandler

One could make a career of throwing darts at the work of Alfred Chandler. I don’t mean just criticizing him. You could take the pages of Chandler’s books, paste them up on a wall, and start throwing. Almost everywhere a point struck would be a little gem of business history to draw your interest. I didn’t need a dartboard, but in 1980 when I first read The Visible Hand I came across a reference to futures trading that fascinated me. It was something I knew little about, yet there it was, its history deftly laid out in a few pages. Classic Chandler: futures trading emerged out of a combination of new technology—the telegraph—and market growth in Chicago. It progressed smoothly and logically, lowering transactions costs, redistributing risk to those able to bear it, promoting the growing scale and scope of distribution. For whatever reason, I seized on futures trading as something to research for my first graduate school paper in 1981. This led me, with Lou Galambos’s help, into the oak paneled offices of the New

Mediating Reputation: Credit Reporting Systems in American History

Examining the development of credit reporting in the United States, this article shows how new, formal methods of assessment of risk and trustworthiness came to mediate business reputations in the credit market over the past century and a half. It focuses on the confl icts over reputation provoked by the new means of assessment and how those confl icts were controlled through organizational procedures and routines as new methodologies were introduced. After World War II seemingly objective quantitative methodologies for evaluating credit worthiness were developed, but they did not eliminate the place of reputation in business decision-making.

The Economy of Surveillance

Surveillance is integral to modern societies. This paper considers the economic forces behind surveillance, the use of surveillance in the private sector, and the social consequences for the continued growth of surveillance over the past several centuries. It argues that the demand for surveillance of people will grow, while the cost of providing surveillance continues to fall. As a result, surveillance will feed upon itself, with detrimental social consequences.

Structuring the Information Age: Life Insurance and Technology in the Twentieth Century (review)

With millions of policies to track and a vast assortment of demographic data to process, insurance companies are among the most intensive business users of information. JoAnne Yates explores their adoption of information technology, mostly mainframe computers and accompanying database software, from the beginning of the twentieth century through the 1970s. In great detail she describes how firms made decisions, highlighting the interaction between producers of technology, notably IBM, and these technology users. While decisions to adopt information technology (IT) reflected basic economic criteria, such as the growing costs of storing policies, processing claims, and billing clients, insurance firms also responded to their political environment. Lambasted in the Armstrong Hearings in 1905 for their high profits and questionable service to the public, they saw technology as a way to professionalize through the institution of set procedures of systematic management. Individual company leaders and emerging IT departments within firms played important roles in the decision-making process, as did bodies responsible for setting standards and trade and professional associations. But for historians of technology, the biggest contribution here is Yates’s careful reconsideration of the process of technology adoption. Contrary to enthusiasts who view every new bit of electronic hardware as the harbinger of a social revolution, Yates shows that insurance firms adopted computers and related products slowly and incrementally. They feared being locked into obsolete systems and worked with producers to design technologies that met their needs. In this regard, she finds in an earlier era what economists had puzzled over in the 1980s and 1990s: despite massive spending on computers and related office equipment, it took firms T E C H N O L O G Y A N D C U L T U R E