An Evolutionary Program for Business History?

Dan Raff offers a proposal for reform of the practice of business history. Since I am not a business historian, and also because my view of the field is strongly influenced by interactions with Dan, I will largely abstain from commenting on the interesting questions about the relationship of his proposal to recent practice in the field. How sharp is the turn it calls for and how constructive? If there are now few exemplars of the style Raff advocates, is that primarily a reflection of scholarly intent, or is it mostly a reflection of the magnitude of the practical challenges confronted by scholars trying to pursue such a program? Alternatively, perhaps the exemplars are actually fairly abundant . . . . I will risk saying that if this is the case, the fact had not come to my attention.

Recently, I have been involved in a controversy on a piece of intellectual terrain that might appear to lie far from business history. To that other audience, I argued that business history provides important illumination for some of the questions in controversy, relating particularly to the origins of organizational capabilities.¹ I offered selected references in support of that position—citing, as it happens, Usselman and Raff.

The present context offers another opportunity to point to the possible gains from trade along an under-utilized trade route. This time I am not promoting the importation of answers from business history. Rather, the focus here is on the identification of the most interesting questions, and the best approaches to answering them—it is, if you will, about market guidance for the exporters of the future. The phrase “most interesting” must reflect some premises, of course. Broadly speaking, the viewpoint is that of an audience for whom the “history” aspect of business history is valued as furthering understanding of the “business” or “economic organization” part. Further clarification of the perspective is offered below.

My natural role here is to assess Raff’s paper in this Symposium from the viewpoint of modern evolutionary economics. Raff characterizes his “. . . essay’s subject as a question of evolutionary economic history” and generously acknowledges the influence of the Nelson and Winter (1982) book on his view of business firms. Unsurprisingly, I find myself in broad agreement with the arguments that he derives from such premises. The first section below highlights this general agreement and expands on some specific points. In the second section, I discuss some issues relating to the role, character, and causal significance of decision processes in firms—which Raff sees as central to the drama that business historians seek to understand. My discussion is partly an amplification of the essay’s treatment, partly a call for an adjustment of its emphasis, and partly an expression of discomfort at some of its specific language. If the parsing among these possibilities is ambiguous, it may be a reflection of some residual puzzlement about Raff’s stance.

Premises and Purposes

In his essay, Raff provides helpful sketches of the links between his argument and some issues of much broader scientific or philosophical significance—e.g., the meanings of “cause” and “explain.” I take it that these pointers are offered by way of signaling awareness of the issues and supporting the reader’s understanding of the premises of the essay. It is clear enough from the sketches and the cited references that a thorough probing of the issues and premises would be a large-scale undertaking. As part of such an undertaking, I personally would like to see a bridge built between the discussion of the Duhem-Quine thesis and the Keith Thomas quote that evokes verstehen and the compelling metaphor of the local guide. Raff intimates, intriguingly, that such a construction is possible, but in the end, we benefit not from such a bridge but from a better sense of where Raff’s intuition is taking him.

Following this example, I offer a brief sketch of the sources of my own interest in business history, and hence in the proposal.² In my home discipline of economics, even the definition of the discipline is controversial. I favor the old definition...