Increasing Market Concentration in USA: Update April 2019

Increasing Market Concentration in USA: Update April 2019

In this post, I have compiled recent articles and papers on the issues of:

  • Increased Market Power
  • Increased Market Concentration
  • Increased Corporate Profits
  • Increased Inequality
  • Anti Trust Laws and Competition policy
  • Interest rates and Business Investments
  • Interest rates and Mergers and Acquisitions
  • Stock Buybacks, Dividends, and Business Investments
  • Outsourcing, and Global Value Chains
  • Corporate Savings Glut
  • Slower Economic Growth
  • Reduced Dynamism


From Low Interest Rates, Market Power, and Productivity Growth

How does the production side of the economy respond to a low interest rate environment? This study provides a new theoretical result that low interest rates encourage market concentration by giving industry leaders a strategic advantage over followers, and this effect strengthens as the interest rate approaches zero. The model provides a unified explanation for why the fall in long-term interest rates has been associated with rising market concentration, reduced dynamism, a widening productivity-gap between industry leaders and followers, and slower productivity growth. Support for the model’s key mechanism is established by showing that a decline in the ten year Treasury yield generates positive excess returns for industry leaders, and the magnitude of the excess returns rises as the Treasury yield approaches zero.

Please see my related posts:


Competition, Concentration, and Anti-Trust Laws in the USA

Concentration, Investment, and Growth

Shareholder Capitalism: Rising Market Concentration, Slower Productivity Growth, Rising Inequality, Rising Profits, and Rising Equities Markets

Rising Market Concentration and Declining Business Investments in the USA – Update June 2018

Rising Profits, Rising Inequality, and Rising Industry Concentration in the USA

Why are Macro-economic Growth Forecasts so wrong?

Low Interest Rates and Business Investments : Update August 2017

Mergers and Acquisitions – Long Term Trends and Waves

Business Investments and Low Interest Rates

Economic Growth Theories – Orthodox and Heterodox

The Decline in Long Term Real Interest Rates

Why do Firms buyback their Shares? Causes and Consequences.

On Inequality of Wealth and Income – Causes and Consequences

Intra Industry Trade and International Production and Distribution Networks

FDI vs Outsourcing: Extending Boundaries or Extending Network Chains of Firms

Understanding Trade in Intermediate Goods

Trends in Intra Firm Trade of USA

Cash and Investments: Corporate Savings Glut in USA

Key sources:

Markups, Consumption and Market Concentration

American Economic Association



How Low Interest Rates Have Led To Increased Market Concentration

Seeking Alpha

March, 2019


Market Concentration Is Threatening the US Economy

Concentration increasing?

John Cochrane


Industry Concentration in Europe and North America



Monopolies are the ‘missing piece of the puzzle’ when it comes to analyzing US inequality, investment researchers argue

Barclays Launches New Research Study Analyzing how Market Concentration is Affecting the US Economy

March 26, 2019


The Surprising Thing About Market Concentration

by esteban rossi-hansberg, pierre-daniel sarte and nicholas trachter


Increased market power: a global problem that needs solving?

January 2019




70 Years of US Corporate Profits∗

Simcha Barkai

Seth G. Benzell

April 2018



Low Interest Rates, Market Power, and Productivity Growth

Ernest Liu, Atif Mian, Amir Sufi

January 2019


Chapter 2: The Rise of Corporate Market Power and Its Macroeconomic Effects

World Economic Outlook

April 2019


Outsourcing, Occupational and Industrial Concentration

Nicholas Bloom (Stanford), Audrey Guo (Stanford) and Brian Lucking (Stanford)
November 2018




Diverging Trends in National and Local Concentration∗

Esteban Rossi-Hansberg Pierre-Daniel Sarte

Nicholas Trachter

February 26, 2019




Macroeconomics and Market Power: Facts, Potential Explanations, and Open Questions

Chad Syverson

January 2019


A Theory of Falling Growth and Rising Rents

Author(s): Philippe Aghion, Antonin Bergeaud, Timo Boppart, Peter J. Klenow, and Huiyu Li

March 2019

Fed Reserve San Francisco

Competition and market concentration in the United States


December 2018

Concentration, Market Power and Dynamism in the Euro Area

ECB Working Paper No. 2253 (2019); ISBN 978-92-899-3515-9


Posted: 26 Mar 2019

The Rise of Market Power and the Macroeconomic Implications

Jan De Loecker
Jan Eeckhout
Gabriel Unger
November 22, 2018



The Origins and History of Management Consulting

The Origins and History of Management Consulting




Pioneers in Management Consulting

  • Edwin Booz
  • James O. McKinsey
  • Andrew Kearney
  • Arthur D Little
  • James Allen @Booz Allen
  • Marvin Bower @McKinsey
  • Bill Bain @Bain and Company
  • Bruce Henderson @Boston Consulting Group BCG


Global Strategy Consulting

  • McKinsey
  • Bain
  • Boston Consulting Group
  • GBN/Monitor/Deloitte
  • Strategy&/BoozAllenHamilton/PWC
  • Arthur D Little
  • Roland Berger
  • LEK
  • Oliver Wyman
  • Accenture
  • Ernest and Young
  • Deloitte
  • Nolan Norton Institute/KPMG
  • PwC
  • AT Kearney
  • Bearingpoint





A brief history of management consultancy

While commercial activity is as old as civilization itself, management consultancy is of more recent vintage. Business historians put the origins of consultancy in the mid-19th century when Samuel Price, Foster Higgins, James Sedgwick and others began operating “advisory practices” in England and the United States. Many historians also agree that Arthur Little was the founder of the first pure consultancy in the USA in the 1880s with a focus on technology and engineering economics. In the 1890s, George Touche and William Deloitte started accounting practices and by the first two decades of the 20thcentury they expanded into auditing and advising, focusing on large clients, offering assistance on financing , taxation, and corporate strategy. Just about all of the early accountancy firms or partnerships, with such hallowed names as Arthur Andersen, Arthur Young, Cooper Brothers, Ernst & Ernst, Peat Marwick, Touche Ross, have entered into the realm of “advice business”. Meanwhile, technology firms, and institutes, such as Stanford Research and Battelle Memorial, joined the fray, marketing themselves as technical-managerial counselors (Biswas and Twitchell, 2002; Gross and Poor, 2008). The appearance of “true” management consultants is traced to Edwin Booz in the 1910s and to James McKinsey, and Andrew Kearney in the 1920s in the USA (Kipping and Clark,2012). Their names survive to this day in partnerships or companies, but others have not fared as well. These pioneers also started with assistance on finances and taxes, but they soon got involved in long-term corporate strategy and short-term operations. In the 1930s, sensing opportunity in an era of depression, Marvin Bower took charge of McKinsey & Company.He hired graduates from top business schools, mostly from Harvard Business School, put them to work as analysts, then later as consultants, emphasizing repeatedly that “the firm”was to be the locus and focus of professionalism (Bower, 1998; Higdon, 1969; McKenna,2006; O’Mahoney, 2010). Even in these early years there was much debate about credentials, qualifications, and branding, followed by heated discussion about accountability, client cultivation, and “proper”competition. The Association of Consulting Management Firms (ACME) was formed in1929 to serve as both “spokesman and policeman”; its current name is the Association of Management Consulting Firms (AMCF). Since then several other associations arose in both USA and Europe. The driving forces behind the growth of management consultancy in the USA have been analyzed in two doctoral dissertations (David, 2001; McKenna, 2000). David identified four major forces that fueled the growth of consultancy during 1930-1960: the increasing number and complexity of companies; the spread of corporate ideology to non-corporate sectors;the organization for the World War II; and the growing impact of business education and the business press. McKenna, on the other hand, emphasized that entry and expansion of consultancies came from emulating the patterns set by three professions: accounting,engineering , and law. In contrast to both David and McKenna, several European authors (e.g. Kipping and Engwall, 2001) found that consultancies in that region owe much to the work of Taylor,Emerson, and the Gilbreths, that is the “scientific management” movement that had its start in the USA. They cite the examples of the firms of Morrini, Urwick Orr, and the REFA Institute from Italy, the UK, and Germany, respectively, to show that emphasis on efficiency,cost containment and strict work rules held sway in Europe during 1915–1965. While this signifies disagreement in regard to the forces that influence consultancies, the debate is about the impact of each specific factor. On a worldwide basis, it is estimated that revenues for management consultancies grew from about $1 billion in 1955 to over $150 billion by 2005 or at an annual rate –nearly11 percent- that is in excess of the growth rate of global trade, output, or investment. (Czer-niawska, 2006; FEACO, 2008; Kennedy Information, 2009). New firms were formed during this period, primarily in the USA, such as Bain & Company, Boston Consulting Group, and the Monitor Group. Older firms, such as McKinsey, Kearney, Booz Allen, AD Little and others also did well; McKinsey was especially successful invading the UK. Specialists did well too e.g. Hay, Hewitt, Mercer, and Watson Wyatt in human resources. The big accounting firms are still doing consultancy and high-tech firms such as IBM are now at the top of the list.Several books (and, of course, many articles) published in the past fifteen years analyzed the growth of consultancy in the second half of the 20thcentury. These volumes fall into three distinct categories: (1) “panorama” books that deal with major trends, corporate practices, cases, and profiles of key firms (Biswas and Twitchell, 2002; Curnow and Reuvid, 2001;Fombrum and Nevins, 2004); (2) “revelation” books that emphasize the politics of the sector and major missteps by consultants and/or their clients (Kiln, 2006; Micklethwait and Wooldridge, 1996; O’Shea and Madigan, 1997; Pinault, 2000); and, (3) “update” books thats how the state of the art and recent activities of companies, along with expansion of business in a given region (Armbruster, 2006; Ferguson, 2002; Kipping and Engwall, 2001;O’Mahoney, 2010; Poor and Gross, 2003; Thommen and Richter, 2004). In contrast, the doctoral theses written during this period emphasized the international expansion of consultancies (Backlund, 2004; McKaig-Berliner, 2001; Wood, 2001). Record-keeping firms also appeared in this era e.g. Kennedy Information (KI) and the Vault in the USA, Datamonitor and the Management Consulting Association (MCA) in the UK, and the European Federation of Management Consulting Associations (FEACO) in Belgium. These organizations make a valiant attempt to gather good data on firm revenues and related statistics; but problems arise in regard to terminology, classification, and data collection. Recently, these firms, much like the consultancies they survey, expanded the scope of the sector to include outsourcing ; it was simply added to the traditional four areas of strategy, operations, human resources, and information technology. We found some outright errors as well as lack of consistency and transparency in the published data. Finally,there is a tendency to exaggerate growth rates, “hot fields,” and opportunities in developing nations.

The current competitive landscape

As we noted, management consulting got its strongest impetus in the USA and the revenues from clients in this nation still account for about one half of the worldwide total. Com-petition now takes place globally among major firms. The leading organizations are information technology firms such as Accenture, CSC and IBM and firms with a strong accounting background, such as Deloitte, KPMG, and PWC have occupied the leading ranks. Global revenues and steady growth in sales, along with market share and contracts won, are objective measures of success on an annual basis. Yet longevity and recruiting are still of great importance and on these facets the old-line firm such as McKinsey, Boston Consulting Group(BCG), Bain, and Booz have done very well. They prospered by recruiting at top business schools, granting generous salaries and bonuses, stressing long-run strategy, and cultivating top management clientele (Datamonitor, 2008; Gross and Poor, 2008; O’Mahoney, 2010,Vault, 2008; etc.). Both the business and popular press in the USA espouse rankings such as “ten largest” or“twenty best,” so publishers started to evaluate not just cars and appliances, but institutions,such as colleges and hospitals. Reaction to such rankings is predictably in a dual mode;decrying them as simplistic or even misleading , while embracing them for promotional goals when one’s rank improved or is high. Kennedy Information, Vault and others now rank management consultants and report that McKinsey, BCG, Bain, and Booz are still at the top in terms of prestige, both in the USA and in Europe, but the information technology firms of Accenture, IBM, and others are making inroads in this largest sub-sector. Roland Berger of Germany was rated the top non-U.S. consultant. Observers argue that beyond financial indicators and subjective rankings lie “the true measure” of success for organizations— in building corporate culture, reputation, competence, and a solid base of loyal clients. The early pioneers of such thinking were James McKinsey and Marvin Bower, under whom McKinsey & Company became known as “The Firm.” They argued that status and success should be achieved by strong governance and reputation-building at the level of the firm. They also sought jurisdictional control, while opposing any outside regulation. Finally, they thought that emulation of accounting, engineering, law, and medicine would lead to professional recognition (McKenna, 2000; Bower, 1998). Others, including James Allen, chief executive of Booz Allen Hamilton in 1960, argued that consultancy did not possess admission and performance standards comparable to the older, established professions and that consultancy was a business. However, both sides were determined to chase out self-styled experts, aggressive salesmen, and especially charlatans.

The debate continues on where consulting really belongs and has not been settled. Hall-marks of a profession are formal education, full-time occupation, a vast body of specialized and published knowledge, and a code of conduct. In addition, regulatory bodies and associations or special groups emerge that strive to restrict entry and establish some monopoly rights. There are complex issues that have been debated at much length (Blair and Rubin,1980; Shimberg et al., 1972). Various degrees of occupational regulation exist, e.g. licensure, certification, and registration for doctors, accountants, and engineers, respectively (Hollings and Pike-Nase, 1997). But so far, states and nations have not enacted legislation for consultancies, in part due to practitioners opposing such moves and in part –as many case studies indicate- because the old-line firms contend that they are the locus of professionalism and that they would enforce rules of conduct and high standards (McKenna, 2000, Rasiel, 1999;O’Mahoney, 2010)

The Origins of Modern Management Consulting

Christopher D. McKenna

In 1993, AT&T spent more on management consulting services than on corporate research and development, and AT&T is not alone [8, p. 60]. Wall Street analysts expect billings for consulting services to advance at twice the rate of corporate revenues over the next decade. Yet, despite the size, growth, and influence of consulting firms, business historians have remained uncharacteristically silent about the origins, development, and impact of management consulting, or “management engineering” as it was known before the Second World War. 2 In this paper, I will describe the professional origins of management consulting firms at the turn of the century and discuss why, after slow, gradual growth through the 1920s, these firms took off during the 1930s. I argue (1) that historians have wrongly assumed that management consulting arose directly out of Taylorism, (2) that engineers, accountants, and lawyers, often supervised by merchant bankers, provided counsel that later became the primary repertoire of management consultants, and (3) that the legal separation of investment and commercial banking in 1933 drove the rapid professionalization and growth of management consulting during the Great Depression.

Recent historians of scientific management, including Daniel Nelson, Stephen Waring, and Judith Merkle, have traced the impact of Taylorism on contemporary institutions as diverse as business education, public administration, and British industry long after the Progressive-era craze for “efficiency” ended [29, 36, 26]. The proponents of scientific management, Frederick Taylor, Henry Gantt, Morris Cooke, Frank and Lillian Gilbreth, and Harrington Emerson, consulted with nearly 200 businesses on ways to systematize the activities of their workers through the application of wage incentives, time-motion studies, and industrial psychology [29, p. 11]. Naturally then, historians of Taylorism have assumed that they could describe contemporary practitioners of “industrial engineering,” “production engineering,” “consulting engineering,” and “efficiency engineering,” as early management consultants. Similarly, management consultants, like Thomas Cody, trying to trace the history of management consulting have assumed that:

undoubtedly the most influential factor in the growth of modern management consulting was the development of the concept of ‘scientific management’ by Frederick Taylor …. The concept combined the practice of engineering with the principles of economics, and it was out of this coupling that today’s profession was born [11, p. 24].

But Taylorists and management consultants actually had very different professional and ideological origins.

As Hugh Aitken pointed out in Scientific Management in Action, those executives and their advisors in large scale business who were “concerned with problems of formal organization and control at the administrative level,” came out of a different intellectual tradition than the shop management movement from which Taylor made his reputation [1, pp. 17-18]. Taylorists were largely concerned with industrial relations while early management consultants focused on problems of bureaucratic organization. While Harrington Emerson’s firm of “efficiency engineers” did survive as a very small consulting firm through the 1980s, and the British “management consultancies” founded in the 1930s were undoubtedly Taylorist, none of the large modern American management consulting firms have Taylorist origins [31, 35]. Rather, professionally-trained accountants and engineers, often with backgrounds in law or banking, founded the early “management engineering” firms to offer advice to executives on the organization of their boardrooms, not on the efficiency of their shop floors.

The growth and complexity of the largest industrial organizations in the United States created a market at the turn-of-the-century for the professional firms of engineers, accountants, and lawyers which offered independent corporate counsel [9, pp. 464-468]. By the 1890s, executives of large manufacturing companies who needed engineering advice, but did not want a full-time engineer on staff, could turn to consulting chemical engineers like Arthur D. Little or electrical engineering firms like Stone & Webster for technical knowledge [20; 19, pp. 386-391]. Similarly, in the 1890s, corporate managers employed American subsidiaries of the British accounting firms, like Price Waterhouse, to provide external audits and financial controls for their growing companies [ 9, p. 464]. By the 1900s, American-based accounting firms like Arthur Anderson, Haskins & Sells, Ernst & Ernst, and Seidman & Seidman were expanding throughout the country [23, pp. 1-3]. In law, large New York corporate law firms like Cravath Swaine, Davis Polk, and Sullivan & Cromwell provided legal advice to businesses headquartered in New York. At the same time growing regional firms like Jones Day in Cleveland and Baker and Botts in Houston served local divisions of national companies [24, p. 22]. The three professions, engineering, accounting, and law, all enjoyed strong growth in firm numbers and size from the 1890s onward because of the specialized skills that larger partnerships could offer their expanding corporate clients.

This expanding corporate clientele enabled younger partners to build practices of “management engineering” within older, larger firms or to found new specialty firms. These younger professionals intentionally borrowed skills and credentials from fields outside their professional training as they struggled to attract clients. For example, the electrical engineering consulting firm of Stone & Webster worked for J.P. Morgan & Co. after the 1893 recession, appraising the value of electrical utility companies owned by General Electric [21, pp. 21-24]. Their appraisals combined engineering expertise and accounting skills as they traded on their Wall Street contacts? While engineers were performing accounting, accountants marketed themselves as engineers. In 1927, James McKinsey, an accountant and lawyer from Chicago, put “accountants and engineers” on his letterhead, as did Miller, Franklin, Basset & Company, an accounting firm based in New York [28]. This blurring of professional boundaries was sometimes just a response to demand but frequently it was the result of training in more than one profession. James McKinsey was not alone in combining legal training with management consulting; his former boss, George Frazer, and his protege, Marvin Bower, were both trained as lawyers [17, p. 7; 6, p. 1]. Management engineers, like others struggling for professional status, used multiple professional credentials to support their claims to specialized knowledge and professional approval in their efforts to market a new and poorly understood service [7].

These engineers, accountants, and lawyers often worked for merchant bankers who, in turn, coordinated a wide array of services which were, at the turn of the century, the closest functional equivalent in the American setting to management consulting. 4 Since merchant bankers provided both commercial and investment banking services, bankers acted both as internal advisors to help their client companies and as external regulators to safeguard investors’ interests. For example, bankers hired countless engineers, accountants, and lawyers to assist them in reorganizing the thirteen large railroads which failed between 1893 and 1898 [14, p. 5]. Bankers frequently needed to evaluate the worth, organization, and prospects of companies for projects as diverse as the valuation of an initial public offering, the reorganization of a bankrupt company, or the administrative integration of two merging corporations. During the 1920s, National City Bank (now Citibank) performed management engineering studies to evaluate the initial financing of United Aircraft, troubled loans at Anaconda Copper, and the merger of six separate business machine companies to form Remington Rand. [2]. To gain a thorough understanding of increasingly complex corporations, bankers called upon and coordinated the work of both internal and external professionals. Investment houses employed engineers for valuations and organizational surveys, accountants for audits and the installation of financial cost controls, and lawyers to serve on reorganization and bond-holder committees. In the 1920s, Arthur Andersen & Company became nationally known for its investigations of “plants, products, markets, organization, and future prospects” of companies that investment banks in New York and Chicago were underwriting [ 3, p. 13-14]. By drawing on a range of professional services as they advised corporate management on planning, organization, and executive control, bankers provided a range of organizational advice, backed by a blue-blooded reputation, which only management consultants would later equal.

While management consulting services were available from the turn of the century onward, the rapid growth, both in numbers and in size, of independent management consulting firms did not begin until the Great Depression. It wasn’t until the 1930s that management consulting firms grew beyond a few founding partners and established branches in new cities. In 1926, after twelve years in business, Edwin Booz employed only one other management engineer; by 1936, Booz -Allen & Hamilton had eleven consultants on staff [5, pp. 7, vi]. Similarly, James O. McKinsey and Company, which McKinsey founded in Chicago in 1926, had, by 1936, expanded to more than 25 employees and had a second office in New York [30, p. 11 ]. The growth in the number of firms mirrored the expansion of the firms themselves. Between 1930 and 1940, the number of management consulting firms grew, on average, 15% a year from an estimated 100 firms in 1930 to 400 firms by 1940 [4, Table 2]. It was no coincidence that the economist Joel Dean wrote in 1938 that “unheralded, almost unnoticed, professional management counsel has become an important institution in our business world” [15, p. 451 ]. During the 1930s the services that management consulting firms provided began to increase in importance. In the 1920s, acquaintances in local companies hired management engineers to analyze limited, technical problems. But, by the 1930s, hundreds of large corporations including Armour, Union Carbide, Kroger, Carrier, Sunbeam, U.P.S., Borden, Upjohn, Johnson Wax, and Sears routinely hired management engineers to improve their organization’s overall strategy, structure, and financial performance. Consultants later assumed that this growth during the depression was a counter cyclical reaction as troubled firms used management engineers to cut costs and improve operational efficiency. Yet, management consultants suffered badly during the 1920-21 recession and, fifty years later, following the 1973 oil embargo – in both cases, clients simply put off expensive studies as their plants sat idle [27, 13]. The growth of management consulting in the 1930s was not simply a “natural” market response to the economic downturn. It was, instead, an institutional response to new government regulation.

New Deal banking and securities regulation propelled the growth of management consulting in the mid-1930s. Firms of management consultants prospered as companies turned from bankers to management engineers for organizational advice. In this last section of the paper, I will illustrate this process of institutionalization by describing (1) the reorganization of U.S. Steel by Ford, Bacon & Davis between 1935 and 1938, (2) the career of management engineer George Armstrong, and (3) the development of the “general survey outline” at James O. McKinsey and Company in the 1930s.

Congress passed the Glass-Steagall Banking Act of 1933 to correct the apparent structural problems and industry mistakes that contemporaries believed led to the stock market crash in October 1929 and the bank failures of the early 1930s. Glass-Steagall divided the investment and deposit-taking functions within banks like J.P. Morgan and National City Bank into two separate industries: commercial banking and investment banking. J.P. Morgan & Company, for example, chose to remain a commercial bank, but several partners left to form the investment banking firm of Morgan, Stanley & Company. Simultaneously, Congress created the Securities and Exchange Commission to regulate financial markets and enforce a more open system of corporate disclosure [25, pp. 169-171]. These legislative changes which reconfigured banking and promoted the rapid growth of independent accounting audits also shaped the institutionalization of management consulting. Since Glass-Steagall prohibited commercial banks from engaging in “non-banking activities,” like management engineering, commercial banks could no longer act as management consultants [32, p. 23]. Federal regulators forced commercial banks to cease their non-banking activities like insurance, real estate development, or management consulting. And, while Glass-Steagall did not restrict investment banks from acting as management consultants, S.E.C. regulations required that underwriters perform external due diligence on securities issues and corporate reorganizations so investment banks could not use their internal management engineers to certify new issues. Federal regulation forced investment and commercial banks from 1934 onward to hire outside consultants to render opinions on the organization of a bankrupt company or the prospects of a newly-formed public company. Commercial bankers simultaneously encouraged business executives to hire management consultants since officers inside the banks could no longer coordinate internal organizational studies of their clients. The new institutional arrangements in banking opened up a vacuum into which firms of management consultants rushed.

The contrast between the old and new institutional order was evident in Ford, Bacon & Davis’ reorganization of U.S. Steel between 1935 and 1938. In 1901, J. Pierpont Morgan had personally supervised the initial organization of U.S. Steel, but in 1935, U.S. Steel’s Chairman, Myron Taylor, asked his college friend, George Bacon, to oversee the reorganization of the largest industrial firm in the country [22]. As Taylor reported to the stockholders of U.S. Steel in 1938,

In 1935 we retained the firm of Messrs. Ford, Bacon & Davis to go through all of our properties, methods, personnel and markets and, in collaboration with our engineers and executives to formulate definite recommendations [cited in 18, p. 619].

Ford, Bacon & Davis’ study took three years, cost 3.2 million dollars, and eventually included 203 separate reports produced in collaboration with five different sub-contracting consulting firms, including McKinsey, Wellington & Co [16]. It was the largest study ever done by management engineers, and the recommendations which Ford, Bacon, & Davis made on the organization, strategy, and operations of U.S. Steel influenced the company’s investment, labor, and administrative policies through the 1950s. In labor relations, for instance, the 1937 accord reached with workers overturned a long-standing antagonistic relationship endorsed by the Morgan Bank which would have immobilized U.S. Steel in the tight labor markets of the Second World War [34, pp. 15-17].

George Armstrong, a Vice-President in charge of industrial investigations at National City Bank between 1921 and 1932, personified the changes caused by the Glass-Steagall Act. During the 1920s, National City Bank had Armstrong conduct studies of their troubled loans to the Saco-Lowell Shops, of the proposed merger of Palmolive, Kraft, and Hersey, and (at J. C. Penney’s personal request) a comparative study of the Penney chain stores and their relative expense ratios [2]•

In 1932, however, with inside assurances from his uncle that Franklin D. Roosevelt intended to break apart commercial and investment banking, Armstrong resigned from National City Bank to found his own consulting firm. His timing was shrewd since lawyers who examined the new statues agreed, in Armstrong’s words,

that any financing be preceded by the exercise of due diligence. This was interpreted to mean the investigation of the subject by a firm of competent engineering consultants and the review of the Registration Statement by such consultants [2, p. 69].

Armstrong’s new firm, George S. Armstrong & Company was successful from its founding in 1933. The firm worked for a succession of investment banking firms during the 1930s investigating such corporate giants as Jones & Laughlin, Seagrams, Birdseye Frozen Foods, and Philip Morris. George Armstrong profited from the transition from banker supervision of management engineering studies to the institutionalization of management consulting even though the types of studies that Armstrong performed did not change. George S. Armstrong & Co. grew rapidly not because it offered a new form of organizational advice but because Armstrong had founded an independent firm.

The history of James O. McKinsey & Company illustrates the institutionalization of management consulting after the Glass-Steagall Act. During the 1930s, James McKinsey worked to systematize the complicated process of soliciting new clients and conducting a management engineering survey. In order to secure new clients, McKinsey methodically cultivated contacts throughout the financial community. He claimed to have taken every important banker in Chicago or New York to lunch and, in return, “‘nearly every one at one time or another has given me some work….'” [37, p. 42]. Perhaps James McKinsey’s greatest contribution to the institutionalization of his firm was the “general survey outline,” which he drafted in December 1931, to give young, inexperienced consultants a model to follow when, as McKinsey specified, they were asked to prepare a complete study of a company that was in financial difficulties [30, p. 11]. Marvin Bower, who joined the firm in 1933, has written that the general survey resembled the corporate reorganizations for bondholders’ committees which Bower had previously overseen as a young lawyer at Jones, Day [6, p. 17]. Indeed, because consultants frequently prepared these general surveys for investment firms during the 1930s, the partners at James O. McKinsey and Company came to refer to them as “banker’s surveys.” The general survey outline survived in modified form in McKinsey and Company’s training manual until 1962 [30, p. 12]. As early as the 1930s, James O. McKinsey and Company was profiting from the external imposition of banking and finance regulation, a transition it was well equipped to exploit. The firm also profited from its internal systematization of client contact and report writing. These internal arrangements allowed McKinsey and Company to overcome the limitations of novice consultants and variable economic conditions as the firm’s organization grew beyond its founder and expanded throughout the world.

The origins of modern management consulting are in the 1930s. Contrary to popular assumptions, Taylorism was not the predominant influence on the development of consulting firms. Rather, management engineers drew on the practices of accountants, engineers, and lawyers to offer CEO-level studies of organization, strategy, and operations. The major change in this emerging quasi- profession took place in the 1930s and was primarily a product of political developments. Before the 1930s, merchant bankers coordinated these studies. But, the Glass-Steagall Act and S.E.C. disclosure regulations forced commercial and investment bankers to abandon internal management consulting activities even as regulators mandated that they commission outside studies. These required studies, combined with the increasing acceptance of management engineers by corporate executives, propelled the rapid growth of consulting firms from the 1930s onward. New Deal legislation and firm-level systemization catalyzed the development of this particularly American form of professionalized corporate counsel.

Since the 1930s, management consultants have reorganized the largest and most important organizations in the world. During the Second World War, the Federal Government hired large numbers of consultants to streamline civilian production, reorganize the military, and oversee the rapid expansion of the Federal Administration. By 1949, Cresap. McCormick & Paget was working for the Hoover Commission restructuring the Executive Branch [12]. As consultants worked for the government, they carried ideas between the public and private bureaucracies, accelerating the process of organizational innovation and dissemination. Since other countries did not legislate the separation of commercial and investment banking, the institutionalization of management consulting never happened outside of the United States. When American management consultants expanded into Europe in the early 1960s, they sold American management “know- how” to European managers eager to employ the organizational structures that J. J. Servan-Schreiber labeled “The American Challenge. “• By the 1970s, McKinsey and Company had decentralized one-quarter of the hundred largest companies in Great Britain [10, p. 239]. Whether reorganizing the Bank of England, Royal Dutch Shell, the Government of Tanzania, or even the World Bank, management consultants disseminated American management techniques throughout the world. But, it was the institutional and professional growth of consultants during the 1930s that was the necessary precursor to the predominance of American management consultants throughout the world and, through them, the ascendancy of American models of corporate organization after the Second World War.


1. Hugh G. J. Aitken, Scientific Management in Action: Tayh•rism at Watertown Arsenal, ] 908-1915 (Princeton, 1960).

2. George S. Armstrong, An Engineer in Wall Street (New York, 1962).

3. Arthur Andersen & Co., The First Sixty Years, 1913 – 1973 (Chicago, 1974). -• Indeed, Servan-Schreiber, in his bestseller from 1968, noted that hand in hand with the growth of American industrial subsidiaries in Europe, “the three American consultant firms with European branches (Booz-Allen, and Hamilton, Arthur D. Little, Inc., and McKinsey and Co.) have doubled their staffs every year for the past five years” [33, p. 8, emphasis in original].

4. Association of Consulting Management Engineers, Inc. (ACME), Numerical Data an the Present Dimensions, Growth, and other Trends in Management Consuhing in the United States (New York, 1964).

5. Jim Bowman, Booz -Allen & Hamilton.. Seventy Years q[‘ Client Service, 1914-1984 (Chicago, 1984).

6. Marvin A. Bower, Perspective on McKinsey (New York, 1979).

7. JoAnne Brown, The Definition of a Pri•bssion: The Authority q[‘ Metaphor in the History Intelligence Testing, 1890-1930 (Princeton, 1992).

8. John A. Byrne, “The Craze for Consultants,” Business Week, (July 25, 1994), 60-66.

9. Alfred D. Chandler, Jr., The Visible Hand (Cambridge, 1977).

I 0. Derek F. Channon, The Strategy and Structure q[‘British Enterprise (Boston, 1973).

I I. Thomas G. Cody, Management Consulting: A Game without Chips (Fitzwilliam, NH, 1986)

12. Cresap, McCormick & Paget, A Summary q[‘the Hoover Report (New York, 1950).

13. “The Consultants Face a Competition Crisis,” Business Week, (Nov. 17, 1973), 72.

14. Stuart Daggett, Railroad Reorganization (Cambridge, 1908).

15. Joel Dean, “The Place of Management Counsel in Business,” The Harvard Business Review, 16 ( 1938), 451-465.

16. Ford, Bacon & Davis, United States Steel Company: Final Study Summarizing the Survey (New York, 1938).

17. Frazer, George E., First Forty Years (Chicago, 1957).

18. N.S.B. Gras, and H. M. Larson, Casebook in American Business History (New York, 1939).

19. Thomas P. Hughes, Networks q[‘Power: Electrification in Western Society, 1880-1930 (Baltimore, 1983).

20. E.J. Kahn, Jr., The Problem Solvers.’ A History of Arthur D. Little, Inc. (Boston, 1986).

21. David Neal Keller, Stone & Webster, 1889-1989 (New York, 1989).

22. Thomas W. Lamont Papers, Box 133, File 6, Historical Collections, Baker Library, Harvard Business School.

23. Miles Lasser, 75 Years •’ Total Involvement: A History (•[‘Seidman and Seidman (New York, 1985).

24. Kenneth J. Lipart(to, and Joseph A. Pratt, Baker & Botts in the Development of Modern Houston (Austin, 1991).

25. Thomas K. McCraw, Prophets of Regulation (Cambridge, 1984).

26. Judith A. Merkle, Management and Ideology: The Legacy of the International Scienti/ic Management Movement (Berkeley, 1980).

27. Miller, Franklin, Basset & Company, The Industrial and Production Engineering Service q/’Miller, Franklin, Basset & Company (New York, 1920).

28. Miller, Franklin, Ba•set & Company, The First Quarter Century (New York, 1927).

29. Daniel Nelson, ed., A Mental Revolution.’ Scientific Management since Taylor (Columbus, 1992).

30. John G. Neukom, McKinsey Memoirs: A Personal Perspective (New York, 1975).

31. James P. Quigel, Jr., The Business *•[‘Selling Efficiency: Harrington Emerson and the Emerson EJJ•ciency Engineers, 1900-1930 (Ph.D. Dissertation, Pennsylvania State University, 1992).

32. Peter S. Rose, The Changing Structure q/’American Banking (New York, 1987).

33. J.J. Servan-Schreiber, The American Challenge (New York, 1968).

34. Paul A. Tiffany, The Decline q/’American Steel (New York, 1988).

35. Patricia Tisdall, Agents of Change: The Development and Practice •’Management Consultancy (London, 1982).

36. Stephen P. Wari ng, Taylorism Tran•s/brmed (Chapel Hill, 1991).

37. William B. Wolf, Management and Consulting: An Introduction to James O. McKinsey (Ithaca, 1978).

Key sources of Research:

The Origins of Modern Management Consulting

Christopher D. McKenna

• The Johns Hopkins University



A brief history of strategy consulting



The Firm: The Story of McKinsey and Its Secret Influence on American Business

The Making of McKinsey: A Brief History of Management Consulting in America




AD Little, Inc



Boston Consulting Group



McKinsey and Company, Inc.



Booz Allen






Roland Berger



Bain and Company










Top 10 consulting firms in the world




Researching Management Consulting: An Introduction to the Handbook  

Matthias Kipping and Timothy Clark



View story at



McKinsey & Company, Inc. History




Top Consulting Firms


An Introduction of Management Consulting



The history of management and technology consultancy BearingPoint



Big 3 consulting firms: McKinsey, BCG and Bain (MBB)


The Creative Consulting Company

Robert S. Kaplan Richard Nolan David P. Norton




Consulting on the Cusp of Disruption








Profiles in Operations Research

Profiles in Operations Research


There are several sources for profiles of luminaries of OR field.

  • Book – Profiles in Operations Research
  • INFORMS – History website
  • UK OR society


From Profiles in Operations Research


From IFORS Hall of Fame




Key Sources of Research:

Profiles in Operations Research

Pioneers and Innovators

Editors: Assad, Arjang A., Gass, Saul I. (Eds.)


Profiles in Operations Research:Jay Wright Forrester

David C. Lane

John D. Sterman



Profiles in Operations Research

John D. C. Little Profile

By Glen Urban and John Hauser



George B. Dantzig

John D. C. Little



Anthony Stafford Beer


Russell L. Ackoff

Abraham Charnes

William W. Cooper

C. West Churchman

Leonid V. Kantorovich

Tjalling C. Koopmans

Harry Markowitz

Oskar Morgenstern

Philip M. Morse


John F. Nash, Jr.


Herbert A. Simon

John von Neumann



History of OR Excellence





IFORS Hall of Fame

Operations Research: Opportunities and Challenges

History of Operations Research

History of Operations Research


Please see links to papers/articles/books for history of OR.

US Military Operations Research History Volume 1 to Volume 3



An Informal History




Investigating the Development of Operations Research through the Lens of Kuhn’s Model of Scientific Development

Mohammad Reza Mehregan1, Mahnaz Hosseinzadeh




A Brief History of Linear and Mixed-Integer Programming Computation

Robert E. Bixby



History of OR








The History and Future of Operations

June 30, 2015




History of IFORS




Operations Research Time Line




Tinne Hoff Kjeldsen





Gene H Fisher and Warren E. Walker

Quantitative Models for Closed Loop Supply Chain and Reverse Logistics


Quantitative Models for Closed Loop Supply Chain and Reverse Logistics



Closing the Supply Chain Loop

  • Repair/Refurbish
  • Reuse
  • Remanufacture
  • Recycle


Industrial Sectors

  • Automotive
  • Beverages
  • Paper and Paperboard
  • Packaging
  • Food
  • Plastics
  • Metals
  • Electronics
  • Others


Key Terms:

  • Reverse Logistics
  • Closed Loop Supply Chain
  • Sustainability
  • Recycling
  • Green SCM
  • European Network on Reverse Logistics (REVLOG)







From A Review on Strategic, Tactical and Operational Decision Planning in Reverse Logistics of Green Supply Chain Network Design













Please see my related posts:

Towards the Circular Economy

Resource Flows: Material Flow Accounting (MFA), Life Cycle Analysis (LCA), Input Output Networks and other methods

Production and Distribution Planning : Strategic, Global, and Integrated

Hierarchical Planning: Integration of Strategy, Planning, Scheduling, and Execution






Key Sources of Research:



‘Agility and reverse logistics: a conceptual framework’


Soosay, Claudine


11th ANZAM Operations, Supply Chain and Services Management Symposium, pp. 1-14





An Overview of Research Characteristics on Reverse Logistics

Mohamad Tabikh






A Review on Strategic, Tactical and Operational Decision Planning in Reverse Logistics of Green Supply Chain Network Design

Farahanim Misni1,2, Lai Soon Lee1,3*





Reverse Logistics Network Design: A Framework for Decision Making

Theresa J. Barker and Zelda B. Zabinsky




The Reverse Logistics Process in the Supply Chain and Managing Its Implementation

Joseph Raymond Huscroft, Jr.;sequence=2




Adopting Circular Economy principles in supply chain management of organizations: reverse logistics.










Introduction to Management of Reverse Logistics and Closed Loop Supply Chain Processes

Donald F.Blumberg









Optimizing the Supply Chain in Reverse Logistics

Pitipong Veerakamolmal

Surendra M. Gupta






Reverse logistics and closed-loop supply chain A comprehensive review to explore the future


Govindan, M.E., PhD., , Kannan; Soleimani, Hamed; Kannan, Devika
European Journal of Operational Research






Reverse Logistics

How to realise an agile and efficient reverse chain within the Consumer Electronics industry





Closed Loop Supply Chain Management and Reverse Logistics -A Literature Review

N. Raj Kumar and R.M. Satheesh Kumar





The Returns Management Process in Supply Chain Strategy






The Reverse Logistics Process in the Supply Chain and Managing Its Implementation

Joseph Raymond Huscroft, Jr.;sequence=2



Quantitative Models for Reverse Logistics

Moritz Fleischmann





Resolving forward-reverse logistics multi-period model using evolutionary algorithms.

Kumar, V.N.S.A., Kumar, V., Brady, M. et al. (2 more authors)





Reverse Logistics Planning: A Strategic Way to Address Environmental Sustainability While Creating a Competitive Advantage

Melissa R. Icenhour







An overview of exclusive challenges in reverse logistics operations and areas where decision support tools are needed.$FILE/Reverse%20Logistics-VNL%20Magazine.pdf




Operations Research for Green Logistics – An Overview of Aspects, Issues, Contributions and Challenges

Rommert Dekkera , Jacqueline Bloemhof b and Ioannis Mallidisc





A bibliometric analysis of reverse logistics research (1992-2015) and opportunities for future research


Reverse Logistics

Quantitative Models for Closed-Loop Supply Chains

Editors: Dekker, R., Fleischmann, M., Inderfurth, K., van Wassenhove, L.N. (Eds.)


Inventory Management in Reverse Logistics in FAW Co., Ltd





Characteristics of the Research on Reverse Logistics (1995-2005)


Sergio Rubio, Antonio Chamorro, Francisco Javier Miranda





Identification of Reverse Logistics Decision Types from
Mathematical Models


Pascual Cortés Pellicer , Faustino Alarcón Valero









How the reverse supply chain impacts the financial performance of original equipment manufacturers

Samuel Bruning Larsen







CAPTURING THE VALUE OF The Circular Economy Through Reverse Logistics


Ellen MacArthur Foundation





The Use of Recycled Materials in Manufacturing: Implications for Supply Chain Management and Operations Strategy

Joy M. Field





Design of a Forward/Reverse Logistics Network with Environmental Considerations

Masoud Rabbani *, a, Niloufar Akbarian Saravi a, Hamed Farrokhi-Asl ba



Quantitative models for reverse logistics: A review


Moritz Fleischmann a, Jacqueline M. Bloemhof-Ruwaard ~, Rommert Dekker b,*,
Erwin van der Laan ~, Jo A.E.E. van Nunen a, Luk N. Van Wassenhove c

Impact of Product Recovery on Logistics Network Design





Chapter 4

Reverse Logistics Network Design

Moritz Fleischmann, Erasmus University Rotterdam

Jacqueline M. Bloemhof-Ruwaard, Erasmus University Rotterdam

Patrick Beullens, University of Leuven

Rommert Dekker, Erasmus University Rotterdam





Reverse Logistics – Capturing Value in the Extended Supply Chain

Moritz Fleischmann1∗, Jo van Nunen1, Ben Gräve2, and Rainer Gapp3





Closed Loop Supply Chain (CLSC): Economics, Modelling, Management and Control


Int. J. Production Economics 183 (2017) 319–321








by Yong Joo Lee, Ph.D. Washington State University May 2009



A New Approach in Supply Chain Design: studies in reverse logistics and nonprofit settings


Berenguer Falguera, Gemma





Reverse Logistics: Network Design Based on Life Cycle Assessment


Joanna Daaboul, Julien Le Duigou, Diana Penciuc, Benoît Eynard





Collection Center Location with Equity Considerations in Reverse Logistics Networks

I ̧sıl Taria,b, Sibel A. Alumurc….pdf?sequence=1






Giuseppe Stecca


University of Rome “Tor Vergata”, Italy






Paul Alfred Colligan






Progress, effects and perspectives

© PBL Netherlands Environmental Assessment

The Hague, 2014




Reverse Logistics: Overview and Challenges for Supply Chain Management


Sergio Rubio1,*and Beatriz Jiménez-Parra






Reverse Logistics Network Design: A Framework for Decision Making


Theresa J. Barker and Zelda B. Zabinsky





Strategic Planning Models for Reverse and Closed-Loop Supply Chains

Kishore K. Pochampally, Satish Nukala, Surendra M. Gupta


Recycling, International Trade and the Environment

An Empirical Analysis

Authors: van Beukering, P.J






Modelling and analysis of international recycling between developed and developing countries


Pieter J.H. van Beukering a,∗, Jeroen C.J.M. van den Bergh




Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future

Kannan Govindan a,⇑, Hamed Soleimani b, Devika Kannan





Concepts, design and implementation of Reverse Logistics Systems for sustainable
supply chains in Brazil


Henrique Luiz Corrêa

Lucia Helena Xavier




Strategic Modeling of Service Parts Closed-Loop Supply Chain of Philips Healthcare:

A system dynamics approach

M.C. Koeken BSc


A Review of Decision-Support Tools and Performance Measurement for Sustainable Supply Chain Management








A Systematic Literature Review of the Supply Chain Operations Reference (SCOR) Model Application with Special Attention to Environmental Issues

Eric N. Ntabe1,2,*, Luc LeBel1,2, Alison D. Munson2, Luis Antonio De Santa-Eulalia3





Perspectives in Reverse Supply Chain Management(R-SCM): A State of the Art Literature Review

Arvind Jayant*,a, P. Guptaa, S.K.Gargb





A robust optimization approach to closed-loop supply chain network design under uncertainty

Mir Saman Pishvaee, Masoud Rabbani *, Seyed Ali Torabi





Towards supply chain sustainability: economic, environmental and social design and planning

Bruna Mota a, *, Maria Isabel Gomes b, Ana Carvalho a, Ana Paula Barbosa-Povoa a



An NPV Optimization Model for Closed-Loop Supply Chain Network Design and Planning






Strategic and Tactical Planning of a Closed-Loop Supply Chain Network: A Linear Physical Programming Approach

Satish Nukala and Surendra M. Gupta





Roberto Poles





Wojciech Stecz





Closed-loop supply chain management: From conceptual to an action oriented framework on core acquisition

Jighyasu Gaur a, *, Ramesh Subramoniam b, Kannan Govindan c, Donald Huisingh





Closed Loop Supply Chain Management and Remanufacturing in the Automotive sector


Modelling and Optimization of Closed Loops Supply Chains

A Closed-loop Supply Chain Model for Managing Overall Optimization of Eco-efficiency

Wei D. Solvang, Ziqiong Deng, Bjoern Solvang








Modeling and Simulation of Closed-Loop Supply Chains Considering Economic Efficiency


Yoshitaka Tanimizu, Yusuke Shimizu, Koji Iwamura, Nobuhiro Sugimura

Closed-loop supply chains: What reverse logistics factors influence performance?




Adopting Circular Economy principles in supply chain management of organizations: reverse logistics





Strategic Planning and Design of Supply Chains: a Literature Review

Alessandro Lambiase1,*, Ernesto Mastrocinque1, Salvatore Miranda1 and Alfredo Lambiase

Open Business Models and Closed-Loop Value Chains: Redefining the Firm-Consumer Relationship

Sebastian Kortmann
Frank Piller

California Management Review 58, 3 (May 2016)



Surendra M. Gupta

CRC Press

Strategic Closed Loop Supply Chain Management

Baptiste Lebreton

Springer 2007

Closed-Loop Supply Chain Planning Model of Rare Metals

Dongmin Son, Songi Kim, Hyungbin Park and Bongju Jeong

Ratio Club: A Brief History of British Cyberneticians

Ratio Club: A Brief History of British Cyberneticians


The Ratio Club: a melting pot for British cybernetics


When Alan Turing was working at Manchester University, he was invited to join the Ratio Club, a dining club comprised of a mixture of biologists and engineers with an interest in cybernetics. There he was able to air and discuss new research and draw inspiration from an eclectic, yet extremely gifted group of individuals. examines the club and its influence on British science.

The Ratio Club was a group of young academics who came together to discuss cybernetics. It was founded in September 1949 by neurologist John Bates at the National Hospital for Nervous Diseases.

The club gathered in a basement room below the nurses’ accommodation and over beer and food participants would listen to a speaker, then have a discussion. The other members were a combination of neurobiologists, engineers, mathematicians and physicists and included Alan Turing. Professors were banned; anyone promoted to this position was supposed to resign their membership.

The aim was to keep the atmosphere informal and the discussion flowing.

Cybernetics is the science concerned with the study of systems and how they interact with each other — be they natural systems or machines. The club met regularly between 1949 and 1955, with a final reunion meeting in 1958. Founder Bates believes that cybernetic ideas could be important tools for developing new insights into the nervous system.

The Ratio Club was noteworthy because many of its 21 members went on to become extremely prominent scientists. These included: – Horace Barlow, the great-grandson of Charles Darwin who has become an enormously influential neuroscientists specialising in the field of vision. – Thomas Gold, who became one of the most prominent astrophysicists of the 20th century and gave the first explanation of pulsars among many other contributions. At the time of the Ratio Club he was working in the Zoology department of Cambridge University studying the inner ear. – John Pringle was a leading invertebrate neurobiologist and was the first scientists to get recordings from single neurons in insects.

He went on to become professor of zoology at Oxford University. – Albert Uttley, who researched radar and automatic tracking during WWII. He later became the head of the Autonomics Division at the National Physical Laboratory where he researched machined intelligence and brain modelling. Later he became Professor of Psychology at Sussex University. – William Grey Walter was a world leader in EEG research, discovering the theta and delta brain waves and developing the first EEG brain topography machine. When he wasn’t researching EEG, he was developing the world’s first autonomous mobile robots, called Elmer and Elsie, which he used to study ideas about brain function.

Many of the club members were interested in developing brain-like devices as a means to either understand biological brains or develop machine intelligence. As a result the conversation tended to focus on the mechanisation of the mind.

Most Ratio talks provided an opportunity for members to discuss their current research. Turing led three different talks. His second talk on Educating a Digital Computer, which took place on 7 December 1950, introduced the Turing Test and focused on how intelligent machines might be developed. Turing suggested using adaptive machines that could learn over their lifetime.

Turing’s third talk at the club, in February 1952, described his then unpublished work on reaction-diffusion models of morphogenesis. This launched him into new directions of theoretical biology and was incredibly influential in the field of computer modelling.

It was through Turing’s communications with fellow Ratio Club members that he expressed his interest in using a computer such as the ACE to study the brain. In a letter to psychiatrist William Ross Ashby, he said: “In working on the ACE I am more interested in the possibility of producing models of the action of the brain than in the practical applications of computing.”

The club had run its course by the summer of 1955, a year after Turing had died from cyanide poisoning after having been chemically-castrated. By that point many of the members’ research had been recognised internationally and cybernetics had become a respected discipline.

You can find out more about the organisation in The Ratio Club: A Hub of British Cybernetics, by Phil Husbands and Owen Holland.


Members of Ratio Club

  • W. Ross Ashby
  • John Bates
  • George Dawson
  • Thomas Gold
  • I.J. Jack Good
  • W. E. Hick
  • Victor Little
  • Donald Mackay
  • Turner McLardy
  • Pat Merton
  • John Pringle
  • William Rushton
  • Harold Shipton
  • D.A.Sholl
  • Eliot Slator
  • Alan Turing
  • Albert Uttley
  • W. Grey Walter
  • John Westcott
  • Philip M. Woodward
  • Horace Barlow


From The Ratio Club: A Hub of British Cybernetics

The definitive list of twenty-one members, with very brief details of expertise and achievements, is given below. Of course these summaries are far too short to do justice to the careers of these scientists. They are merely intended to illustrate the range of expertise in the club and to give a flavour of the calibre of members.

W. Ross Ashby (1903-1972), trained in medicine and psychiatry, is regarded as one of the most influential pioneers of cybernetics and systems science. Author of the classic books Design for a Brain (Ashby 1952a) and An Introduction to Cybernetics(Ashby 1958), some of his key ideas have recently experienced something of a renaissance in various areas of science including Artificial Life and modern AI. At the inception of the club he was director of research at Barnwood House Hospital, Gloucester. He subsequently became a professor in the Department of Biophysics and Electrical Engineering, University of Illinois.

Horace Barlow FRS (1921- ), a great-grandson of Charles Darwin, is an enormously influential neuroscientist, particularly in the field of vision, and was one of the pioneers of using information theoretic ideas to understand neural mechanisms (Barlow 1953, 1959, 1961), a direct consequence of his involvement in the Ratio Club. When the club started he was a PhD student in Lord Adrian’s lab at the department of physiology, Cambridge University. He later became Royal Society Research Professor of Physiology at Cambridge University.

John Bates (1918-1993) had a distinguished career in the neurological research unit at The National Hospital for Nervous Diseases, London. He studied human EEG in research into voluntary movement and became the chief electroencephalographer at the hospital. The Club was his idea and he ran it with quiet efficiency and unstinting enthusiasm.

George Dawson (1911-1983) was a clinical neurologist at the National Hospital, Queen square. At the time of the Ratio Club he was a world leader in using EEG recordings in a clinical setting. He was a specialist in ways of averaging over many readings which allowed him to gather much cleaner signals than was possible by more conventional methods (Dawson 1954). He became Professor of Physiology at UCL.

Thomas Gold FRS (1920-2004) was one of the great astrophysicists of the 20thcentury, being a co-author, with Bondi and Hoyle, of the steady state theory of the universe and having given the first explanation of pulsars, among countless other contributions. However, he had no time for disciplinary boundaries and at the time of the Ratio Club he was working in Cambridge University Zoology Department on a radical positive feedback theory of the working of the inner ear (Gold 1948) – a theory that was, typically for him, decades ahead of its time. He went on to become Professor of Astronomy at Harvard University and then at Cornell University.

I.J. (Jack) Good (1916- 2009) was recruited into the UK top secret code cracking operation at Bletchley Park during the second world war, where he worked as the main statistician under Alan Turing and Max Newman. Later he became a very prominent mathematician, making important contributions in Bayesian methods and early AI. During the Ratio years he worked for British Intelligence. Subsequently he became Professor of Statistics at Virginia Polytechnic Institute.

W.E. Hick (1912-1974) was a pioneer of information theoretic thinking in psychology. He is the source of the still widely quoted Hick’s law which states that the time taken to make a decision is proportion to the log of the number of alternatives (Hick 1952). During the Ratio years he worked in the Psychology laboratory at Cambridge University. He went on to become a distinguished psychologist.

Victor Little (1920-1976) was a physicist at Bedford College, London, who worked in acoustics and optics before moving on to laser development.

Donald Mackay (1922-1987), trained as a physicist, was a very highly regarded pioneer of early machine intelligence and of neuropsychology. He was also the leading scientific apologist for Christianity of his day. At the birth of the club he was working on a PhD in the Physics department of King’s College, London. He later became a professor at Keele University where he founded the Department of Communication and Neuroscience.

Turner McLardy(1913-1988) became an international figure in the field of clinical psychiatry. He emigrated to the USA in the late 1950s to develop therapeutic techniques centred around planned environments and communities. Later he became a pioneer of understanding the role of zinc in alcoholism and schizophrenia. At the inception of the club he worked at Maudsley Hospital, London.

Pat Merton FRS (1921-2000) was a neurophysiologist who did pioneering work on control theoretic understandings of the action of muscles (Merton 1953). Later he carried out a great deal of important early research in magnetic stimulation of the cortex for which he is justly celebrated (Merton and Morton 1980). During the Ratio years he worked in the neurological research unit at the National Hospital. He later became Professor of Human Physiology at Cambridge University.

John Pringle FRS (1912-1982) was one of the leading invertebrate neurobiologists of his day. He was the first scientist to get recordings from single neurons in insects, something that had previously been thought to be practically impossible (Pringle 1938). He did much important work in proprioception in insects, insect flight and invertebrate muscle systems. At the birth of the club he worked in the Zoological laboratory, Cambridge University. He subsequently became Professor of Zoology at Oxford University.

William Rushton FRS (1901-1980) is regarded as one of the great figures in 20thcentury vision science. He made enormous contributions to understanding the mechanisms of colour vision, including being the first to demonstrate the deficiencies that lead to colour blindness (Rushton 1955). Earlier he did pioneering work on the quantitative analysis of factors involved in the electrical excitation of nerve cells, helping to lay the foundations for the framework that dominates theoretical neuroscience today (e.g. Rushton 1935). He worked at Cambridge University throughout his career where he became Professor of Visual Physiology.

Harold Shipton (1920- 2007) worked with Grey Walter on the development of EEG technology at the Burden Neurological Institute, Bristol. He was the electronics wizard who was able to turn many of Walter’s less than precise designs into working realities. Later he became a professor at The University of Washington at St. Louis, where he worked on biomedical applications. At the time of the Ratio meetings, his father-in-law, Clement Attlee, was prime minister of Great Britain.

D.A. Sholl (1903-1960) did classic research on describing and classifying neuron morphologies and growth patterns, introducing the use of rigorous statistical approaches (Sholl 1956). Most of the classification techniques in use today are based on his work. He also published highly influential papers on the structure and function of the visual cortex. He worked in the Anatomy department of University College, London where he became Reader in Anatomy before dying young.

Eliot Slater (1904-1983) was one of the most eminent British psychiatrists of the twentieth century. He helped to pioneer the use of properly grounded statistical methods in clinical psychiatry. Slater’s work with Rudin on the genetic origins of schizophrenia, carried out in Munich in the 1930s, still underpins all respectable Anglo-American work in psychiatric genetics, a field to which Slater made many important contributions (Slater et al. 1971). He worked at the National Hospital for Nervous diseases, London.

Alan Turing FRS (1912-1954) is universally regarded as one of the fathers of both computer science and artificial intelligence. Many regard him as one of the key figures in twentieth century science and technology. He also anticipated some of the central ideas and methodologies of Artificial Life and Nouvelle AI by half a century – for instance, he proposed artificial evolutionary approaches to AI in the late 1940s (Turing 1950) and published work on reaction-diffusion models of the chemical origins of biological form in 1952 (Turing 1952). At the inception of the club he was working at Manchester University, where he was part of a team that had recently developed the world’s first stored-program digital computer.

Albert Uttley (1906-1985) did important research in radar, automatic tracking and early computing during WWII. Later he became head of the pioneering Autonomics Division at the National Physical Laboratory in London where he did research on machine intelligence and brain modeling. However, he also became well know as a neuropsychologist, having made several important contributions to the field (Uttley 1979). At the birth of the club he worked at TRE, Malvern, the main British military telecommunications research establishment. Later he became Professor of Psychology at Sussex University.

W. Grey Walter (1910-1977) was a world leader in EEG research. He discovered theta and delta brain waves and, with Shipton, developed the first EEG brain topography machine (Walter and Shipton 1951). At the time of the Ratio Club he was at the Burden Neurological Institute, Bristol, where, alongside his EEG research, he developed the first ever autonomous mobile robots, referred to as tortoises, which were controlled by analogue electronic nervous systems (Walter 1950a). This was the first explicit use of mobile robots as a tool to study ideas about brain function, a style of research that has become very popular in recent times.

John Westcott FRS (1920- ) made many very distinguished contributions to control engineering, including some of the earliest work on control under noisy conditions. He also worked on applications of control theory to economics which resulted in his team developing various models used by the UK Treasury. At the inception of the club he was doing a PhD in the department of Electrical Engineering, Imperial College, London, having just returned from a year in Wiener’s lab at MIT. He later became Professor of Control Systems at Imperial College.

Philip M. Woodward (1919- ) is a mathematician who made important contributions to information theory, particularly with reference to radar, and to early computing. His gift for clear concise explanations can be seen in his elegant and influential 1953 book on information theory (Woodward 1953). He worked at TRE, Malvern throughout his entire distinguished career (one of the buildings of the present day successor to TRE is named after him). In retirement Woodward has come to be regarded as one of the world’s greatest designers and builders of mechanical clocks (Woodward 1995).

Bates’ own copy of his typed club membership list of 1st January 1952 has many hand-written corrections and annotations (Bates 1952a). Among these, immediately under the main list of members, are the following letters, arranged in a neat column: ‘Mc’, ‘P’, ‘S’ and then a symbol that may be a ‘U’ or possibly a ‘W’. If we assume it is a ‘W’, then a possible, admittedly highly speculative, interpretation of these letters is: McCulloch, Pitts, Shannon, Wiener. The first three of these great American cyberneticists attended club meetings – McCulloch appears to have taken part whenever travel to Britain allowed. Wiener was invited and intended to come on at least one occasion but travel difficulties and health problems appear to have got in the way. The ‘W’, if that’s what it is, could also refer to Weaver, co-author with Shannon of seminal information theory papers and someone who was also well known to the club. Of course the letters may not refer to American cyberneticists at all – they may be something more prosaic such as the initials of members who owed subs – but it is just possible that Bates regarded them as honorary members.

It is clear from the membership listed above that the centre of gravity of the club was in the brain sciences. Indeed the initial impetus for starting the club came from a neurologist (Bates) who believed that emerging cybernetic ideas and ways of thinking could be very important tools in developing new insights into the operation of the nervous system. Many members had a strong interest in developing ‘brain-like’ devices, either as a way of formalizing and exploring theories about biological brains, or as a pioneering effort in creating machine intelligence, or both. Hence meeting tended to centre around issues relating to natural and artificial intelligence and the processes underlying the generation of adaptive behaviour – in short, the mechanisation of mind. Topics from engineering and mathematics were usually framed in terms of their potential to shed light on these issues. This scope is somewhat different to that which had emerged in America, where a group of mathematicians and engineers (Wiener, von Neumann, Bigelow, Shannon, Pitts) and brain scientists (Lorente de No, Rosenblueth, McCulloch) had formed an earlier group similar in spirit to the Ratio Club, although smaller and with a centre of gravity further towards the mathematical end of the spectrum. Their influence soon spread, via Frank, Mead, Bateson and others, into the social sciences, thereby creating a much wider enterprise (Heims 1991). This difference in scope helps to account for the distinct flavour of the British scene in the late 1940s and for its subsequent influences.


Key Sources of Research:



Ratio Club




The Ratio Club: a melting pot for British cybernetics



The Mechanical Mind in History

Phil Husbands, Owen Holland, and Michael Wheeler



The Ratio Club: A Hub of British Cybernetics


Phil Husbands and Owen Holland




Alan Turing and the Ratio Club




Warren McCulloch and the British cyberneticians

Competition, Concentration, and Anti-Trust Laws in the USA

Competition, Concentration, and Anti-Trust Laws in the USA


Currently the US FTC has been having hearings on concentration, competition, and anti-trust laws in the USA.  Several conferences are organized starting with September 2018.  I present links to hearings details and videos of the sessions.  As of now, two hearings have already taken place.  I have given the links to the third hearing below.  Economists Joe Stiglitz and Jason Furman have given speeches and presentations during first and second hearings.

Key Sources of Research:

Hearings on Competition and Consumer Protection in the 21st Century

Hearings on Competition and Consumer Protection in the 21st Century

The Federal Trade Commission will hold a series of public hearings during the fall and winter 2018 examining whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection law, enforcement priorities, and policy. The PDF version of this content includes footnotes and sources. All the hearings will be webcast live.



Hearings on Competition and Consumer Protection in the 21st Century: Opening Session

September 14, 2018




FTC Hearing #1: Competition and Consumer Protection in the 21st Century

Hearing #1 On Competition and Consumer Protection in the 21st Century, September 13-14, 2018





FTC Hearing #2: Competition and Consumer Protection in the 21st Century

FTC Hearing #2: Competition and Consumer Protection in the 21st Century


FTC Hearing #3: Competition and Consumer Protection in the 21st Century

FTC Hearing #3: Competition and Consumer Protection in the 21st Century - George Mason University







Nobel Prize-winning economist Joseph Stiglitz says the US has a major monopoly problem



Competition Conference 2018

What’s the Evidence for Strengthening Competition Policy?

Boston University


Slower Productivity and Higher Inequality: Are They Related?

Jason Furman and Peter Orszag

June 2018




Market Power and Monetary Policy

Speech given by

Andrew G Haldane Chief Economist Bank of England

Co-authors: Tommaso Aquilante, Shiv Chowla, Nikola Dacic, Riccardo Masolo, Patrick Schneider, Martin Seneca and Srdan Tatomir.

Federal Reserve Bank of Kansas City Economic Policy Symposium Jackson Hole, Wyoming

24 August 2018