Abstract

"The Facts of The Visible Hand Reconsidered, Lamoreaux, Raff, and Temin (AHR 2003) also"

Daniel Raff, Wharton Business School (raff@wharton.upenn.edu)

What the historian careful with sources can hope for confidently is that when the analysis or synthesis comes to subsequent attention, it still seems true to its evidentiary basis. It is harder to maintain such confidence about evidence which emerges only afterwards and about the perspective new evidence might suggest.
This paper challenges a popular impression of Chandler’s central argument in The Visible Hand and, equally, certain prominent claims in Lamoreaux, Temin, and Raff [LRT] (2003). The challenge derives from an observation about the structure and incentives regarding organization of historically key production processes. The structure of production Chandler chronicles is
ultimately one of flow-style integrated sequential production. Vitally important once, this seems to have run its course. LRT noticed and emphasized the late CXX rise in the importance of long-term vertical relationships between distinct firms. But LRT were also eventually wrong-footed by time: those long-term relationships seem now to have been just a harbinger of the modular organization and products dominating productivity growth and prospective profitability in recent decades (see Baldwin forthcoming etc.). Yet the basic LRT and Raff methodological point (see bibliography) remains intact and indeed visibly robust. In the absence of something like a classification theorem saying that the number of such forms of organization is strictly limited and the empirical observation that the varieties have all emerged already, history remains for the industrial historian a fundamentally open-ended subject and the anti-Whig forward looking perspective remains the best basis for robust historical analysis. What prompts the incidence of cross-sectional change in dominant form over time is not some τελος but rather the differential pace of opportunities for significant technical change across industries. This observation represents a complement to the LRT perspective without diminishing the latter’s force, altering the sense of the facts that essay discusses though it
does.