In "The Visible Hand: The Managerial Revolution in American Business", Alfred Chandler distinguishes two different phases in the history of American business: before 1850, in what could be called market capitalism, companies were most of the time managed by their owners and were driven by market mechanisms. They were also usually single location companies.
After 1850, big, complex, multiple locations companies started to grow, thanks to the development of modern, reliable transports and telecommunications systems. In such complex organisation, administrative coordination did better than market mechanisms to improve productivity and reduce production costs. It was the beginning of what Chandler calls managerial capitalism. This change brought a revolution in the enterprise, for the operation of the company was transferred from the owner to a full-time, salaried, professional manager.
For Chandler, the railroad companies were both catalysts and pioneers for this managerial revolution: railroad companies were the first multiple, geographically-dispersed locations organisations where operations had to be carefully coordinated. They created the first formalized organisations, including job descriptions, organisation and communication charts and, for the first time, accurate cost accounting.
The irony is that Chandler wrote this major book in the early 70s, just before the changes that saw the end of industrial capitalism and the dawn of financial capitalism... "Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
By the way, in France, nationalisation of railways occurred only in 1938. "Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
It was only finished then, with the establishment of SNCF. But in the West and North, the Chemin de Fer de l'État existed from 1878. *Lunatic*, n. One whose delusions are out of fashion.
