• bigger than a partnership
• initially they conferred some kind of monopoly
  
• investors can buy stock--it was initially a way to fund public works projects like toll roads (investors were paid back from the tolls)
  
• limited liability (Lloyd's of London is not limited liability)
  
• in many states they were difficult to create until the 1840s (first general law was New York in 1811)
  
• makes sense only on a large scale so only if there are economies of scale and energy is in plentiful supply
• cheap transportation to provide large markets to make large scale production useful
• economies of scale--if you make more of something you can lower the cost
• factories are cheaper because they substitute machines driven by mechanical energy for human labor
  

larger businesses were possible with larger markets and faster communication
it takes a while to figure out how large businesses should work
by the 20th century corporations are playing a key role in technological progress because they have figured out that they can compete by innovation

running a railroad by the book or by telegraph

• by the book: you assume the train is where it is scheduled to be
• this is particularly important because many railroads used a single track for traffic in both directions
• the telegraph provided near-instant information about where trains were actually located
• but this kind of information was such a new idea that in some cases railroads were slow to adopt it--in one case 20 years
• a railroad required layers of management
  

Corporations make new products possible

• widespread use of iron stoves instead of fireplaces
  
• factory made plows and reapers in the 1840s
• farm windmills to pump water from wells
• labor to produce 20 bushels of wheat (p. 113)
  
• 61 hours in 1830
• 3 hours in 1896 (before the gasoline powered tractor came into use)
• increasing regional specialization of agriculture
  
• food was increasingly produced by corporations
• meat packing
• canned food

New sources of energy

• gas derived from coal
• oil pumped from the ground starting in 1859 for light and heating and then for internal combustion engines

Corporations grew particularly by managing the market, but they realized by 1900 that they could grow by managing innovation