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The correspondence between Baumol and Galbraith (1957–1958) An unsuspected source of managerial theories of the firm.

Abstract : Baumol’s impact on the development of managerial theories of the firm is investigated here through material found in Galbraith’s archives. In 1957 Galbraith published a paper claiming that the impact of macroeconomic policies varies with market structures (competitive versus oligopolistic). This publication prompted Baumol (1958b) to send Galbraith a manuscript dealing extensively with a crucial question of managerial theories of the firm, namely, the “trade-off” between sales and profits. I argue that Baumol’s critiques and Galbraith’s answers largely explain the way Baumol (1958a, 1959) framed his alternative model of the behavior of big corporations. He reasoned in terms of maximization of sales with a profit constraint as their main objective. In return, Business Behavior, Value and Growth fostered the development of Marris’s (1964) and Galbraith’s (1967) theories of the corporation. Contrary to the narrative by Tullock (1978) in which the sales maximization hypothesis has two main branches – Baumol for the one and Galbraith-Marris for the other – I argue here that these branches are at least partially connected.
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https://halshs.archives-ouvertes.fr/halshs-02981270
Contributor : Alexandre Chirat <>
Submitted on : Tuesday, October 27, 2020 - 9:40:15 PM
Last modification on : Tuesday, March 23, 2021 - 1:52:04 PM
Long-term archiving on: : Thursday, January 28, 2021 - 7:42:52 PM

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Alexandre Chirat. The correspondence between Baumol and Galbraith (1957–1958) An unsuspected source of managerial theories of the firm.. 2020. ⟨halshs-02981270⟩

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