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Reflections On Alfred Chandler,Jr.

September 10, 2007

I never knew Alfred D. Chandler, Jr. personally. My introduction, however, to his thinking and style as an historian came through a reading of The Visible Hand: The Managerial Revolution in American Business. While Visible Hand is not necessarily an exciting book, I learned from it some sense of history’s possibility as an argumentative profession that can engage the largest ideas in world and Western history.

My prompt in thinking about Chandler was this obit I found over the weekend in last month’s OAH Newsletter (No. 35). The piece was written by Geoffrey Jones of the Harvard Business School. My notion of Visible Hand‘s place in the canon of great history books made me read the obit more attentively than usual. Here are some highlights from Jones’s reflection–interspersed with comment:

– “Alfred D. Chandler, Jr., the Pulitzer Prize-winning business historian who exercised a profound influence on the development of management studies, passed away on May 9, 2007 at Youville Hospital in Cambridge, Massachusetts.”

TL: It seems a disservice, or a reduction at the least, to open by saying he profoundly influenced management studies only. A thoughtful historian’s work and thinking sneaks into works well beyond her or his own. For instance, William Cronon’s Nature’s Metropolis–a book of environmental and urban history–cites Chandler in many spots.


– “He was born in Guyencourt, Delaware, on September 15, 1918, and received his B.A. from Harvard College in 1940. He attended the University of North Carolina in 1945 and 1946, and received his Ph.D. from Harvard University in 1952. From 1940 until 1945 he served as an officer in the United States Navy.”

TL: Why does Jones not tell us Chandler’s specializations at North Carolina and Harvard? Who was his mentor at Harvard? This Wikipedia entry on Chandler doesn’t mention these points either. I wonder how his experience in the navy colored Chandler’s view of the effectiveness of management and business.

– “Al taught on the faculty of the Massachusetts Institute of Technology between 1951 and 1963 and the Johns Hopkins University between 1963 and 1970, serving for four years as head of the history department.”
– “He then went to Harvard Business School in 1970 as a visiting professor and a year later became the Isidor Straus Professor of Business History, a position he held until becoming emeritus in 1989.

TL: The arc of his career demonstrates how even the biggest names in history, with starts at preeminent schools, still work their way (somewhat) up the chain. I mean, what was MIT’s status in history or business in the 1950s and 1960s? My sense of the history of higher education is that MIT was not respected in either of those fields until very late in the twentieth century. I’d love for my perception to be corrected on this by a reader.

– “[Chandler], who seems to have decided to become a historian at the age of 7, was initially interested in the field of southern history, but a growing interest in sociology during his graduate studies encouraged him to study the history of business organization.”

TL: This precociousness reminds me of Schlesinger (see this link for more on him).

– “In search of a topic for his doctoral dissertation, he found by accident the papers of his great-grandfather Henry Varnum Poor, a well-known nineteenth- century railroad analyst, while cleaning out a storeroom in his great aunt’s home. This became the basis for his doctoral dissertation and subsequent first book on the development of modern business practices in American railroads.

TL: I love stories about accidents like this. How many times had Schlesinger thought of these papers before graduate school? How many times had his mother, grandmother, or great-grandmother wanted to throw them away? Or, how long had those women suspected the value of those papers before their male child could do something important with them?

– “Over the following decades Al was an assistant editor for four volumes of the papers of Theodore Roosevelt while at MIT and editor or coeditor for six volumes of the papers of Dwight D. Eisenhower at Johns Hopkins, but his primary focus became business history.”
– “Al’s reputation was made by three majestic monographs. Strategy and Structure (1962) used case studies of four large American corporations in the interwar years to explore the emergence of the decentralized, multidivisional structure. The book was a radical departure in the field of business history, which had previously consisted of monographs on individual firms or industries.”
– “His next major book, The Visible Hand (1977) explained the rise of big business in the United States before 1940. Al argued that the “visible hand” of professional managers had replaced the “invisible hand” of markets as the principal allocator of resources. He traced this process to the coming of the railroad and telegraph in the nineteenth century. In striking contrast to critics of the monopoly power of large firms, Al argued that the growth of large enterprises was both economically rational and beneficial. The book won the Pulitzer Prize for history.”

TL: While Jones’s summary is okay, I actually like Wikipedia’s analysis better:

“The thesis of The Visible Hand is that, counter to popular dogma regarding how capitalism functions, administrative structure and managerial coordination replaced Adam Smith’s ‘invisible hand’ (market forces) as the core developmental and structuring impetus of modern business.”

This goes to what I noted above about the ability of historians to engage the so-called Great Ideas (with apologies to Mortimer Adler and Robert Hutchins). In one book Chandler basically demolished the notion of the market as some kind of a natural steady state. The Belknap press sales copy, located at the link in the opening lines of this post, might summarize the book the best:

The role of large-scale business enterprise–big business and its managers–during the formative years of modern capitalism (from the 1850s until the 1920s is delineated in this pathmarking book. Alfred Chandler, Jr., the distinguished business historian, sets forth the reasons for the dominance of big business in American transportation, communications, and the central sectors of production and distribution. The managerial revolution, presented here with force and conviction, is the story of how the visible hand of management replaced what Adam Smith called the invisible hand of market forces. Chandler shows that the fundamental shift toward managers running large enterprises exerted a far greater influence in determining size and concentration in American industry than other factors so often cited as critical: the quality of entrepreneurship, the availability of capital, or public policy.

But back to excerpts from Jones’s obituary:

– “In Scale and Scope (1990), [Chandler] provided a comparative history of managerial capitalism in the United States, Britain, and Germany based on a study of the two hundred largest corporations in those countries.”
– “[Chandler] continued to research and write until the end of his life, publishing studies of the consumer electronics and chemicals industries in recent years. His extraordinary achievements were recognized by the award of numerous honorary degrees. He served as president of the Economic History Association and the Business History Conference, and was on the executive board of the Organization of American Historians. He remained generous and unassuming, and a great supporter of younger scholars.”
– “[Chandler] will be long remembered as one of the most important American historians of the second half of the twentieth century.”

Well, Mr. Jones, this might be true, but your obit in the OAH Newsletter is not really going to help people know why. Is this the fault of Newsletter editors not assigning the obituary to someone more familiar with historiography in general? I don’t know. Did another obit did a better job? I think so. Here are some excerpt’s from The Economist‘s remembrance:

– “TODAY’S business leaders are voracious consumers of management advice. They are forever calling in the consultants and surfing the business press for the next big thing. So here is a free tip. Get off the whirligig of management fads. Forget about ‘long tails’ and ‘wikinomics’ for a while and do something old-fashioned. Sit down with a handful of books—admittedly rather fat books—and contemplate the life’s work of Alfred Chandler.”

TL: I know zero about long tails and wikinomics, but so far, so good on the introduction.

– “Mr Chandler was the dean of American business historians, the man who more or less invented the history of the big corporation. But he was more than an ivory-tower academic. For much of his life he taught at Harvard Business School, where he made business history mainstream. (In 1970, when he arrived, few took the course; in time, hundreds enrolled.) This gave his work a sharp practical edge.”

TL: To my point above about Chandler’s time at MIT, well, he wasn’t even a superstar at Harvard when he finally “arrived.”

– “[Chandler] influenced a generation of consultants with his insistence that structure must follow strategy—that changes of strategy can be successful only if managers are willing to wrench their organisations into new forms.”

– “His fingerprints are all over one of the 20th century’s classic business books, My Years with General Motors by Alfred Sloan. (Mr Chandler ascribed his habit of drinking sherry every lunchtime to Sloan’s influence. Sloan used to hit the martinis at lunch when they were working on the book together. The younger historian thought it more prudent to stick to sherry.)”

TL: Could it be that Chandler’s friendship, and perhaps influence, with Sloan helped in the latter’s humanistic endeavors, such as the Sloan Foundation?

– “Mr Chandler could easily have missed his vocation. He was born into a patrician family in Delaware, and remained passionate about patrician sports: some of the best duck-hunting anywhere, he would say, was found round Guantánamo Bay. At the height of the Depression he went with his family on a year-long cruise to the Galápagos. He liked to show visitors a photograph of the Harvard sailing team of 1940, a group of five handsome young men in ties and jackets that included himself and Jack Kennedy.”

TL: This paragraph puts Jones’s entire obituary to shame. More is conveyed about Chandler’s upbringing and potential professional assumptions here than talking about being interested in history as a seven-year old, or simply noting that he was born in Guyencourt, Delaware.

But now we get to the real reason why Economist readers might want to know more (or something—anything) about Chandler:


– “Giant corporations, [Chandler] argued, arose in the late 19th century as a result of the integration of mass production and mass distribution. They swept all before them with their superior management techniques, relentlessly internalising transactions that had previously been done by the market, and they continued to evolve and expand, adapting new forms to deal with new problems. The 1920s saw the rise of multi-division firms—notably Sloan’s General Motors—that welded separate business sections into a co-ordinated enterprise.”

TL: Nice tie-in with the Sloan book.

– “Mr Chandler’s massive body of research…took serious issue with some of the basic assumptions of economics. He questioned Adam Smith’s emphasis on the invisible hand. …For Mr Chandler it was managers, patiently building and running large organisations, who were the real heroes of the industrial age, and not fly-by-night entrepreneurs, as some romantics taught.”

TL: And here it is! The Economist tells its readers: You are the heroes!

– “He also challenged the reigning assumption that oligopolies were inherently inefficient. On the contrary, he argued, the industries that drove economic growth for much of the 20th century…were quickly dominated by a small number of vertically integrated firms that nevertheless continued to grow and innovate. These companies were successful precisely because they were able to make huge investments in management and production.”

And finally, The Economist tells its readers that the bigger the business, as a manager you’re likely to be a bigger hero!

—————

My apologies for the long post, but I thought a few points needed to be made. To summarize:

a. The Economist hit all the major points with its obituary. In some ways, it conveyed more information about Chandler as a person and history professional. Of course you have to put up with business propaganda at the end.

b. Chandler is a more important historian than many recognize. The conclusions of his work reach as far as business, or capitalism, is integrated into any culture and society. In other words, I’m not sure one can understand the United States today without a firm (no pun intended!) understanding of the ideas in Visible Hand.

c. Chandler shows historians how the mundane — the Babbitts of U.S. history — can mingle with the great ideas. That’s no small feat. – TL

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