Richard Langlois, author of the book The Corporation and the 20th Century: The History of American Business Enterprise, and Will Bachman discuss the transition from entrepreneur-led businesses to modern multi-unit businesses. Richard talks about the drivers behind this transformation, including antitrust, which led to unintended consequences such as making coordination between firms illegal, and the shift from vertically integrated businesses to modular corporations.  His book highlights the impact of the depression, which eliminated many financial institutions, making it possible for internal capital markets to function and fund innovation. His book also explores the issue of  price controls and government interference with markets also interfered with market mechanisms, making it difficult for smaller businesses to coordinate resources. From Entrepreneur-led Businesses to Multi-unit Businesses Richard explains that the rise of large companies and far-flung enterprises in the mid-20th century required conscious management and professional managers who weren't also owners, and that transactions in a market require market supporting institutions, such as financial markets and legal systems, which can be provided in a decentralized way or within the firm. He argues that the success of large, vertically integrated corporations is partly due to the lack of success of alternatives to these structures. Antitrust also plays a role in this transition, as it made it difficult for firms to engage in complex contracts and do things internally. He talks about how the transition from entrepreneur-led businesses to multi-unit businesses was driven by factors such as antitrust, the Great Depression, World War 2, and the New Deal. Richard offers a few examples of antitrust in action with the concept of block booking, where movie studios pre-sell entire blocks of movies to cinemas without allowing them to preview them first to ensure the studios could recoup costs of production. Another interesting aspect he cites is the leverage theory. Taking us back to the 1930s, he talks about IBM who used control over proprietary punch cards to sell their mechanical computing equipment to maintain quality control and price discrimination, which is charging high prices to those who want the product and low prices to those who don't. He goes on to explain how this became the "one lump of monopoly theory," and what this means.  The History of Leasing Machines and Government Opposition Richard defines the concept and history of leasing machines, which began in the early industrial revolution. In Britain, the textile industry was highly vertically disintegrated. Entrepreneurs could rent equipment to get into manufacturing products. This allowed entrepreneurs to lower upfront fixed costs and easily enter the business. However, the federal government's antitrust policy made it difficult for companies to lease their machines and wanted them to sell them. This led to lawsuits against them from the entrepreneurs who, once they knew how to use the manufacturing equipment, decided they wanted to break the lease to rent cheaper equipment from a competitor.  However, manufacturers enforced long leases and prevented customers from buying cheaper equipment elsewhere, and breaking their original lease. This practice was seen as anti-competitive, as retailers couldn't compete on price, but manufacturers wanted retailers to compete on quality, service, repairs, and service rather than price. Resale Price Maintenance  In the early 20th century, companies would charge high prices for complex products like vacuum cleaners and washing machines, which required hard salesmanship and servicing. This discouraged customers from visiting full-service showrooms and purchasing cheap products online. Resale price maintenance is a strategy to prevent resellers from freeriding on services, but the antitrust authorities argued it was anti-competitive because it wasn’t allowing resellers to