Economic Theory and the Rise of Big Business in America, 1870–1910

Between 1870 and 1910, big business established itself as a prominent feature of the American economy. American economists paid close attention to its rise and confronted the difficulties of integrating large firms into economic theory. The result was a theory that emphasized the importance of entrepreneurship, that enlarged the scope of competition, that distinguished profit from other forms of income, and that was compatible with large-scale enterprise. The insights of earlier American economists have been lost to modern economic theory, which extols the virtues of small firms.