Development and Underdevelopment in the History of Economic Thought

Management rising. Defining “good and healthy business” under W. Wilson’s administration.

Thomas Mueller, Université Paris 8
Sophie Aguilhon, Université Paris 8

In 19th century American firms, managerial functions and tools were being implemented at all organizational levels,replacing A. Smith’s invisible hand (Chandler, 1987). But as major case law can highlight with Sugar Trust Case of 1895, United States v. Addyston Pipe Co. (1898), United States v. American Tobacco Co. (1911) or Standard Oil Co. of New Jersey v. United States (1911), competition policy through Sherman Antitrust Act also played a major role regarding the form and functioning of this kind of enterprises. Yet, “antitrust reform remained on the political agenda because of widespread public condemnation of industrial concentration and the Court’s use of injunctions against organized laborers and independent proprietors” (Sawyer, 2019, p.8). Consequently, two acts, the Federal Trade Commission Act and the Clayton Antitrust Act, were created in 1914. At first, their aim was also to limit the unwanted consequences of monopolies and trusts. However, when Wilson administration announced its program of « busting the trusts », a powerful lobbying action took place, shaping and taming the Clayton Act. Through a careful analysis of archival material, most notably the letters and papers of the Wilson administration, the Congress and Senate deliberations, and further contextual elements from newspapers, businessmen biographies and private correspondence, our paper displays how management science emerges from a mixture of economic ideas and ideals, business practices, real politik and public opinions about legitimate trade practices. As such, management science appears to be a mirror of a societal compromise between market efficacy and regulation, between a sense of justice and concrete needs, that was somehow explicitly inscribed into law by a deliberate choice.


Keywords: management, antitrust, history of management, trust, vertical integration