Global Perspectives on Enterprise Systems

Syllabus

B30.2190.W1

Richard Sylla

Winter Intensive 2010: Jan 6-15, 2014

1.5 credits

Course Description and Requirements

This course of reading, writing, lecture and discussion considers how the enterprise systems of Great Britain, Germany, Japan and the United States--four successful, wealth-creating societies—developed, and how the lessons learned from them might apply to contemporary emerging markets. We pay special attention to impacts of government, financial systems, entrepreneurship, and management. Case studies of prominent enterprises in each country show the importance of each of these areas, and especially entrepreneurship and management.

The intellectual objectives of the course are to develop an understanding of different enterprise systems and to hone abilities to think comparatively, both over time and across national contexts.

Students are provided with a conceptual framework and analytical tools to assess the lessons one might learn from the histories of these four economies and their application to our own time, especially with regard to productivity, trade, shifts in comparative advantage, the relative effectiveness of industrial policy, and market regulation. The final class session(s) consider the application of mature-economy experience to emerging markets.

Classes will be a mix of lecture, discussion, and group presentations. Attendance is important; this big-picture course ranges far and wide, and happens fast. Short essays (one-page maximum, non-graded but mandatory, with course grade reductions if neglected or late) on assigned readings are required for most class sessions as a preparation for discussion. There will be a final take home essay, distributed in the penultimate class session, which will be due one week from the end of the course.

Since there are reading and homework assignments due for the first class, it is important to do the reading sufficiently in advance. Please read for comprehension. Think about what the important themes are. Don’t get lost in the mass of detail. There is absolutely nothing to memorize.

Course grades will rest mainly on the quality of the final essay, adjusted for quality of class participation, group presentations, and homework. Study groups will be announced 2 at the first class, after drop-add shakes out. Presentation slides should be emailed to [email protected]; they will be posted on the course website for later reference by all.

B30.2190

Global Perspectives

Texts and other readings, etc.

Thomas C. McCraw, ed., Creating Modern Capitalism (Harvard University Press, 1998). Available in NYU Professional Bookstore or on-line distributor.

Morgen Witzel, Management History: Text and Cases (Routledge, 2009). Available in NYU Professional Bookstore or on-line via Bobst e-books.

George David Smith and Richard Sylla, "Capital Markets," from Encyclopedia of the 20th Century (Scribners, 1996). Posted on Blackboard under “Course Documents.”

Recommended: A recent book about the BRICs and other emerging markets is Ruchir Sharma, Breakout Nations: In Pursuit of the Next Economic Miracles (Norton 2012). Sharma is head of Emerging Market Equities and Global Macro at Morgan Stanley Investment Management. It is summarized in http://www.foreignaffairs.com/articles/138219/ruchir-sharma/broken-brics

For other perspectives on success and failure, see: www.credit-suisse.com/conferences/aic/2012/doc/web/20120417_apac.pdf

Other readings listed below, on NYU Classes (BB) under “Course Documents.”

Class Schedule and assignments

Jan 6 The world today. Patterns of modernization: government and society

Read: George David Smith, Richard Sylla, and Robert E. Wright, “The Diamond of Sustainable Growth,” (BB), and, from Creating Modern Capitalism, one of the following:

If your last name begins with A to E: Peter Botticelli, “British Capitalism and the Three Industrial Revolutions”;

If your last names begins with F to K:T.K. McCraw, “American Capitalism”; 3 If your last name begins with L to P:Jeffrey Fear, “German Capitalism” and Jeffrey R. Bernstein,

If your last name begins with Q to Z: Jeffrey Bernstein, “Japanese Capitalism.”

Homework assignment due at the beginning of class: A one-page max essay in response to the following questions: What is most distinctive about the economic development of the country you studied, compared to another country (perhaps your own) whose economic history you know? What factors best account for the country’s economic success? Be prepared to discuss these questions at the first class, and to compare the country you studied with the three others based on the discussion of them.

Jan 8 Dynamics of capitalism: financial systems

Richard Sylla, “Emerging Markets in History: The United States, Japan, and Argentina,” George David Smith and Richard Sylla, "Capital Markets;" both on BB. Witzel, Ch. 6 on “Financial Management,” pp. 232-53 and Case 1A (Medici Bank) pp. 28-34; Case 6B (Coutts) pp. 258-62; and "The Deutsche Bank" [Group Presentation (GP) on Sat. Jan. 11, which will briefly summarize the Case and expand on it by relating how Deutsche Bank has developed as a financial firm over the last two decades to now] from Creating Modern Capitalism.

Homework: One page on these questions: Based on the readings and the histories of the four countries, does financial development lead to economic growth and development? Or do economic growth and development emanating from other sources lead to financial development? One page max.

Jan. 11 am Dynamics of capitalism: entrepreneurship and management: pt. I

Read: "Josiah Wedgwood;" and “Henry Ford, Alfred Sloan, and the Three Phases of Marketing” from Creating Modern Capitalism. Witzel, Case 2A, “Pierre du Pont and the M-form business”, and Case 9B, “Henry Ford, 1910 and 1927.” [Two Group Presentations—brief summaries of the Wedgwood and Ford/Sloan cases plus accounts of the last two decades of these iconic companies’ histories] 4 Homework: One page ranking Wedgwood, Ford, and Sloan 1, 2, 3 as entrepreneurs, and also 1, 2, 3 as managers, with brief explanations of your rankings under each of the two headings. One page max.

Jan. 11 pm Dynamics of capitalism: entrepreneurship and management: pt. II

Read: “August Thyssen,” “IBM…”, and “7-Eleven…” from Creating Modern Capitalism. Witzel, Case 6A, “United States Steel”, 4D. “”Carl Zeiss Jena,” and Case 5E, “Thomas Cook”. [3 Group Presentations comparing 1)Thyssen and US Steel, 2) IBM and Zeiss, and 3) 7- Eleven and Thomas Cook in terms of entrepreneurship and management.]

Homework: Write on: Of the six companies, which two represent the greatest entrepreneurial insights? Why? Which two, based on the case readings and their subsequent histories, appear to have been the best managed? Why? One page max.

Jan. 13 Leaders and Laggards in Asia: Japan and China

Read: David Landes, “Why Europe and the West? Why Not China” and Acemoglu/Robinson, “Why Nations Fail,”on BB. Plus Witzel, Case 7E, “The Ming dynasty’s navy”, Case 6D, “Hongkong and Shanghai Banking Corporation”, and Case 9E, “Li Hongzhang.” And “Toyoda Automatic Looms…;” in Creating Modern Capitalism. [2 GPs, using the Diamond framework if it helps: 1) Why did Western Europe (and its offshoots) surge far ahead of China in economic development and wealth accumulation in recent centuries when the two areas arguably were at similar levels of development 4-5 centuries ago? 2) Why did Japan surge far ahead of China in economic development and wealth since the middle of the 19th century when the two countries arguably were at similar levels at that time?]

Homework: The Japanese Toyoda/Toyota companies managed to capture markets from superior players in both the textile machinery and auto industries and became world-class companies in each of those industries. What factors contributed to the company’s success in each of the areas in which it succeeded? One page max.

Jan. 15 Lessons for (and from) emerging markets

Read: Ruchir Sharma, “Broken BRICS”, references and link on p. 2 above.

A decade or more ago the “BRICs” (Brazil, Russia, India, and China) were identified as the emerging economies that would become future world 5 leaders, just as the JUUGs (Japan, UK, USA, and Germany) emerged and became world economic leaders in history.

Now, more than a decade later, let’s debate the pros and the cons of the case for or against each of the BRICs, using the Diamond framework if it helps. Each group will need to do a little research beyond the course readings to make its case. Each group will make its case for or against one of the BRICs becoming a future economic leader in the mold of the JUUGs:

Brazil: Group 1 for, Group 2 against

Russia: Group 3 for, Group 4 against

India: Group 5 for, Group 6 against

China: Group 7 for, Group 8 against

Each group has about 10-11 minutes to make its presentation, to be followed after the pro and con presentations by Q & A and discussion. The presentation slides can be as detailed as groups wish, but the presentations themselves should stick to the time allowed. All presentations will be posted on the course site as they come in to the instructor so that they will be available for reference and study during the course and after the last class.

Some web sources of information are: www.nationmaster.com, www.cia.gov/cia/publications/factbook, EIU country reports: www.nyu.edu/library/bobst/vbl.country info.html, www.state.gov/r/pa/ei/bgn 6

Instructor’s Biographical Information

RICHARD SYLLA

Richard Sylla is Henry Kaufman Professor of the History of Financial Institutions and Markets, and Professor of Economics at the Stern, NYU. He is also a Research Associate of the National Bureau of Economic Research, and a Fellow of both the American Academy of Arts and Sciences and the Cliometric Society.

Professor Sylla received the B.A., the M.A., and the Ph.D., all from Harvard University. He is the author of The American Capital Market, 1846-1914 (1975); co- author of The Evolution of the American Economy (1993; 1st ed., 1980) and, with the late Sidney Homer, A History of Interest Rates, (4th ed., 2005); and co-editor of Patterns of European Industrialization—The Nineteenth Century (1991), The State, the Financial System, and Economic Modernization (1999), and Founding Choices: American Economic Policy in the 1790s (2011), as well as of journal articles, essays, and reviews in business, economic, and financial history.

Professor Sylla is a former editor of The Journal of Economic History. His current research focus is on the financial history of the United States in comparative contexts. He served as chairman of the board of trustees of the Cliometric Society, 1998- 2000. In 2000-2001, Sylla was president of the Economic History Association, the professional organization of economic historians in the United States. In 2005-2006, he was president of the Business History Conference. Sylla is chairman of the board of trustees of the Museum of American Finance, a Smithsonian affiliate located in New York City at 48 Wall Street.