Penrose (1959) Golden Anniversary

21 October 2009 at 3:36 pm 3 comments

| Peter Klein |

Penrose_bookThis year marks the 50th anniversary of Edith Penrose’s Theory of the Growth of the Firm (1959), one of the most important and influential books on the firm and firm strategy. To celebrate, Yasemin Kor and Christos Pitelis organized  a roundtable at last week’s SMS conference with remarks by Christos, Yasemin, Joe Mahoney, Margie Peteraf, and Maurizio Zollo. The participants have graciously allowed me to post their slides and materials (1, 2, 3, 4). Christos, Penrose’s friend and literary executor, has edited and introduced a new edition of the 1959 book, which you can purchase here. You can read his introduction here. Nice!

Penrose trivia: During the 1950s Murray Rothbard made his living by reviewing literature and grant proposals for the William Volker Fund. When going through Rothbard’s correspondence a few years ago I came across a proposal for a study on firm growth submitted jointly by Penrose and Fritz Machlup, her dissertation supervisor at Johns Hopkins. Apparently at one point, the book was going to be a joint project. (Rothbard thought the ideas in the proposal didn’t fit with Penrose’s earlier warnings about the use of biological analogies in economics. However, as Joe Mahoney has noted, there is no inconsistency between the 1952 article and the 1959 book; Penrose is careful in her work on growth not to treat growth tendencies in firms as automatic, but to model them based on the preferences, beliefs, and actions of the firm’s personnel. In other words, she accepts natural selection in this context but not random mutation.)

BTW, what other important works in our field appeared in 1959, to be celebrated this year? Coase’s article on the Federal Communications Commission is one. The 1970s may have been the golden decade but there were major contributions in the previous decades as well. What are your favorites? Whose anniversary should we be preparing to celebrate?

Entry filed under: - Klein -, History of Economic and Management Thought, Management Theory, Strategic Management, Theory of the Firm. Tags: .

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3 Comments Add your own

  • 1. Peter Klein  |  22 October 2009 at 1:37 am

    In response to a query, Maurizio’s slides aren’t included because he didn’t have any, not because he isn’t gracious. :-)

  • 2. Richard Ebeling  |  22 October 2009 at 9:04 am

    Another “anniversary” this year is 80 years since the publication of Ludwig von Mises’ 1929 book, “Critique of Interventionism,” in which he carefully showed the inherent inconsistancies in various forms of government price and production regulations and controls that strongly suggest the inherent “instability” of the “mixed economy.”

    Mises’ conclusion was that because of the discoordinating affects of government interventions in the market place there often develops a “dynamic” of one set of government interventions creating distortions in the market that foster further government interventions in an attempt to compensate for the failures of the earlier interventions.

    As a result, the unintended logic of government interventionism is to lead to further political controls and regulations, resulting in a growing spider’s web of state management and command over the private sector.

    The only alternatives, Mises’ argued, was a continuation of the spread of government interventions until the market is replace with a planned economy — or, the government reverses its distortive manipulations and allows the market to once again be free.

    I would suggest that Mises’ analysis of the Interventionist State continues to have significant relevency given everything going on in the U.S. today.

    Richard Ebeling

  • 3. Dick Langlois  |  27 October 2009 at 9:22 am

    The Mercatus Center is apparently having a conference to honor the 50th anniversary of Coase’s famous article on the FCC.

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