The vanishing hand: the changing dynamics of industrial capitalism

Alfred Chandler's portrayal of the managerial revolution of the late nineteenth and early twentieth centuries does not extend well into the late twentieth century, when widespread vertical disintegration began replacing the classical multi-unit managerial enterprise. This paper attempts to explain the new economy in a manner consistent with Chandler by providing an enlarged theoretical account of industrial evolution. in this account, clusters of Chandlerian firms appeared as a temporary episode within a larger Smithian process of the division of labor.