The system of inside contracting has received little attention from economic historians despite its importance in the development of American industry. Although several authors have mentioned the system, none has described its operation in detail. The purpose of this paper, therefore, is to remedy this omission and analyze the reasons for the elimination of the system, with particular reference to one manufacturing plant (Winchester Repeating Arms Company).

As in the Middle Ages in the West, so in Tokugawa Japan (1600–1868) men were fond of explaining the hierarchical society in which they lived by comparing it to an organism. Social classes, Confucian scholars said, were like parts of the body: each had a vital function to perform, but their functions were essentially different and unequal in value. In this scheme the peasants were second in importance only to the ruling military class. Just as the samurai officials were the brains that guided other organs, so the peasants were the feet that held the social body erect. They were the “basis of the country,” the valued producers whose labor sustained all else. But, as a class, they tended innately to backsliding and extravagance. Left alone they would consume more than their share of the social income, ape the manners and tastes of their betters, and even encroach upon the functions of other classes to the perilous neglect of their own. Only the lash of necessity and the sharp eye of the official could hold them to their disagreeable role. They had to be bound to the land; social distinctions had to be thrown up around them like so many physical barriers; and, to remove all temptation to indolence and luxury, they had to be left only enough of what they produced to let them continue producing.

Mercantilism is defined for this discussion as a policy of government that expressed in the economic sphere the spirit of nationalism that animated the growth of the national state in early modern times. The policy aimed to gain for the nation a high degree of security or self-sufficiency, especially as regards food supply, raw materials needed for essential industries, and the sinews of war. This end was to be achieved in large measure by means of an effective control over the external activities and resources upon which the nation was dependent. In turn, that urge impelled the mercantilists to prefer colonial dependencies to independent foreign countries in seeking sources of supply. If the state could not free itself completely from trade with foreign nations, it sought to control that trade in its own interest as much as possible. To realize such objectives, mercantilism embraced three subordinate and related policies. The Corn Laws fostered the nation's agriculture and aimed to realize the ideal of self-sufficiency as regards food supply. State aids to manufacturing industries, such as the protective tariff, sought to provide essential finished goods, including the sinews of war. The Navigation Acts were intended to assure that foreign trade would be carried on in such a way as to yield the maximum advantage to the state concerned.

It May have been the ingrained pessimism of Bentham and McCulloch that provoked Carlyle to dub economics the dismal science. It surely must have been economists' concern over price theory, which they regarded and still regard as the central core of economics, that made the name stick. Studies of the role of prices in history are no less tedious and technical than price theory, and in hands no more skillful than mine they can be even more dreary. But this is not the worst of my worries. The evidence that I shall sketch supports the pessimistic hypothesis that during certain germinal periods price and wage behavior of the type that is now taking a distressing percentage of real income from all of us who live on our salaries has proved beneficial to society in the long run and that the type of price and wage behavior which would benefit most of us in the short run has had serious disadvantages. Yet I have the inner satisfaction of appearing to be objective in my thinking and fearless in airing my conclusions in a gathering of some of the worst aggrieved.

The poor quality of western European forests as sources of masts and the depletion of oak forests in Britain and France during the eighteenth century forced the two principal maritime powers to import naval timber and to seek far afield for naval masts. Both Britain and France gradually were forced to increase their imports of timber from neighboring states and the Baltic market. The acquisition of masts for naval vessels involved even greater dependence on markets overseas. Masting trees were sparsely scattered in western Europe; the British Isles produced none. France took some masts from forests in the Pyrenees, Auvergne, Alsace, and Dauphiné, but they were limited in quantity, lacking in flexibility, and were often condemned for their propensity to early brittleness and rot. Masts imported from French colonies in North America proved unsatisfactory in both cost and quality. Until the last quarter of the eighteenth century Britain enjoyed an advantage over France in the acquisition of colonial North American mast supplies, since die forests of New England produced excellent masts of extraordinary size. Britain's imports from New England, under a Royal Navy monopoly, satisfied a sizable part of her needs and reduced the British navy's importation of Baltic mast supplies by perhaps one third in the early 1770's. The American Revolution, however, abruptly ended Britain's monopoly of American masts. The rebellious colonists halted British imports and opened the splendid pine forests of New Hampshire, Massachusetts, and Maine to French naval exploitation.

The sort of document which explicitly formulates policy is, in any field of history, rather hard to come by. That is especially true when we search for formulations of business policy and especially for medieval formulations of medieval business policy.

The analysis summarized below was made in an attempt to study long-term changes in the level and composition of national income in the United States. For reasons that will become dear, this attempt had to be limited to measures for years since 1870; but before this decision was reached, I had to scrutinize and reject the current and rather widely used estimates for the years prior to 1870. The notes below summarize the results of this scrutiny and may be of interest to other workers in the field.

Adolf Hitler's position in the economic life of his days has been the object of ardent discussions from his early beginnings down to the present time. The Marxist and leftist view which sees in the Führer one of the most outstanding servants of German monopoly capitalism has been contested not only by Hitler's own followers but, to an even greater extent, by the spokesmen and legal representatives of the German industrial circles, who wished to disclaim any responsibility for the disastrous events of that period. A scientific investigation of this problem is the more imperative, since die preponderant role played by socioeconomic factors in the rise of the Führer is quite obvious. A leader of an insignificant little group who distinguished himself from the many antiproletarian dictator candidates of his time mainly by his qualities as a demagogue, rooted in his neurotic reaction to the experience of social decline, Hitler in 1923 suffered a complete political fiasco, because his following was too small. While times of full employment and economic boom were unfavorable for his party, his movement benefited greatly from periods of depression, such as die one that followed the stabilization of the mark in 1923, and especially from the big depression after 1929. This depression not only caused the ruined masses of the German middle class to follow a leader who knew how to fight his social decline by donning a field-grey uniform but it also made some big German producers more eager than before to listen to a man who seemed to be conquering a disaster that had been caused, to a large extent, by their own rationalization policy.

Until very recently scholars have been able to solve certain problems of historical interpretation to their own and presumably to their reader's satisfaction by merely uttering the magic words, “laissez faire.” Thus, much of what was done and most of what was not done, some of what was good and practically all of what was evil in nineteenth-century England and America have been accounted for by a facile reference to laissez faire. During the past few years, however, several studies have cast much doubt on the validity of this catchall interpretation. Laissez faire, it seems now, is a principle more easily imposed upon nineteenth-century data than found there; and in successive investigations supposed instances of this principle have dropped away one by one.

Financially, the Federal Government was more poorly prepared for war in the early months of 1861 than it had been since its establishment. The financial policies of the government in the period preceding the war weakened its credit; and this, along with the urgency of the conflict, was to make short-term borrowing and the printing of paper money attractive but costly wartime expedients. Although the failure to finance the war on a sound basis cannot be ascribed merely to prewar financial conditions and policies, the stage was set by them. The regression to earlier methods of war finance began even before the war.

The task of discussing sociological changes in the field of European enterpreneurship is not an easy one, mainly because of the scarcity of historical data of the earliest period and the fact that there has been comparatively little individual biographical research relating to that period. These changes can perhaps best be illustrated by attempting to define the individual typifying the entrepreneur in each of the three economic periods that Sombart has designated as early, middle or mature, and late capitalism.

Translator's introduction: To understand the significance of this paper, the American reader should recall that, as Talcott Parsons says, German “idealistic empiricism” led to a repudiation of analytical social and economic theory “in favor of the concrete uniqueness and individuality of all things human.” The “general analytical level of scientific comprehension [was] a priori excluded” from the field of human action. Understanding of things human “in terms of the concrete individuality of the specific historical case became the goal.” Professor Arthur Spiethoff, once a student, later an assistant, of Gustav von Schmoller, and a friend of Edwin F. Gay while the latter studied in Berlin, moved away from that point of view. He recognized analytical theory as a legitimate subject and thereby deviated from what can be considered the typical nineteenth-century German attitude.

Puerto Rico became an insular possession of the United States following the Spanish-American War in 1898. Shortly thereafter the island was brought within the monetary and tariff structures of the United States, and mainland capital began to flow into the island, especially in the form of investments in the sugar industry. These factors were mainly responsible for shaping the Puerto Rican economy and for tying it closely to the economy of the United States.

During the two decades prior to 1900, electrical manufacturing companies grew from small, single-plant firms, producing only a few items and employing several hundred workers, to large, multiplant organizations, with hundreds of products and thousands of employees. This change in the scale of operations required the invention and application of new organizational forms and new administrative procedures. The men who were responsible for these developments were among the first to recognize and solve the administrative problems of large industrial corporations. The work of these men is the subject of this paper.

The purpose of this paper is to describe briefly the administrative organization and planning system of the typical large Soviet steel plant, and then show how the plant director carries out one of his essential functions both with the help of and in spite of the institutional framework within which he has to operate. Our attention will be focused primarily at the level of the individual firm, but in order to appreciate the problems of firm management we must first see how the individual enterprise fits into the all-pervading Soviet industrial bureaucracy.