Monday, June 26, 2006
One of my favorite pieces that explores the tensions between economies of scale and competition is a three-part series by political economist Richard T. Ely in the May, June, and July issues of Harper's Monthly Magazine in 1887. His articles were entitled "The Nature and Significance of Corporations," "The Growth of Corporations," and "The Future of Corporations."
From a historical viewpoint, the tension between economies of scale and competition is unmistakeable, as is the difficulty that the makers of competition policy and economists have had in coming to grips with it. Now, according to a review in the FT, a new book on the history of economic thought takes this as its central theme -- a must-read on my list.
Tim Harford, "Nerds and saints of economic thought," Financial Times (U.S. edition), 26 June 2006, 14 -- review of David Warsh, Knowledge and the Wealth of Nations: A Story of Economic Discovery (W. W. Norton).
Finally, it seems, the long tussle between Arcelor and Mittal is being resolved. The concept of management culture is a familiar one, and the challenge of merging very different management cultures has long been recognized as a risk factor affecting the success of a merger. But do shareholder cultures matter in a similar way? Judged by the voting-rights provisions in their articles of association, Arcelor and Mittal occupy opposite ends of the prevailing spectrum of governance structures, so the merger, if it is consummated, will offer a good test.
Peter Marsh, "Arcelor succumbs to Mittal," Financial Times (U.S. edition), 26 June 2006, 1.