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Set in September 1992, this exercise provides teams of students the opportunity to negotiate terms of a merger between AT&T and McCaw Cellular. AT&T, one of the largest U.S. corporations, was the dominant competitor in long-distance telephone communications in the United States. McCaw was the largest competitor in the rapidly growing cellular-telephone communications industry. Prior to the negotiations, AT&T had no position in cellular communications. This case and its companion (F-1143) are designed to allow students to be assigned roles to play. The case may pursue some or all of the following teaching objectives: exercising valuation skills, practicing strategic analysis, exercising bargaining skills, and illustrating practical aspects of mergers and acquisitions.

In this paper, I demonstrate an alternative explanation to the development of the American electricity industry. I propose a social embeddedness approach (Granovetter, 1985, 1992) to interpret why the American electricity industry appears the way it does today, and start by addressing the following questions: Why is the generating dynamo located in well‐connected central stations rather than in isolated stations? Why does not every manufacturing firm, hospital, school, or even household operate its own generating equipment? Why do we use incandescent lamps rather than arc lamps or gas lamps for lighting? At the end of the nineteenth century, the first era of the electricity industry, all these technical as well as organizational forms were indeed possible alternatives. The centralized systems we see today comprise integrated, urban, central station firms which produce and sell electricity to users within a monopolized territory. Yet there were visions of a more decentralized electricity industry. For instance, a geographically decentralized system might have dispersed small systems based around an isolated or neighborhood generating dynamo; or a functionally decentralized system which included firms solely generating and transmitting the power, and selling the power to locally‐owned distribution firms (McGuire, Granovetter, and Schwartz, forthcoming). Similarly, the incandescent lamp was not the only illuminating device available at that time. The arc lamp was more suitable for large‐space lighting than incandescent lamps; and the second‐generation gas lamp ‐ Welsbach mantle lamp ‐ was much cheaper than the incandescent electric light and nearly as good in quality (Passer, 1953:196–197).

Nobody concerned with political economy can neglect the history of economic doctrines. Structural changes in the economy and society influence economic thinking and, conversely, innovative thought structures and attitudes have almost always forced economic institutions and modes of behaviour to adjust. We learn from the history of economic doctrines how a particular theory emerged and whether, and in which environment, it could take root. We can see how a school evolves out of a common methodological perception and similar techniques of analysis, and how it has to establish itself. The interaction between unresolved problems on the one hand, and the search for better solutions or explanations on the other, leads to a change in paradigma and to the formation of new lines of reasoning. As long as the real world is subject to progress and change scientific search for explanation must out of necessity continue.

When a community of fifty thousand people have all their eggs in two baskets and one is dropped it is a serious matter, not only for the industry concerned but for all who live upon it indirectly. Especially is this so when geographical isolation makes it impossible for the worker to transfer to other employment when his job fails. Jersey, the largest of the Channel Islands, has experienced the slings and arrows of outrageous fortune on several occasions since liberation from German thraldom revived both hope and opportunity to make up the loss and deprivations of those five weary years. It has not been all plain sailing. In addition to starved soil, depreciated and often ruined buildings, and other drawbacks experienced in common with agriculturalists in other countries, Jersey has had her own problems, chief of which has been the Colorado Beetle. A legacy of German neglect, this pest had established itself so widely on the island that the first crop of potatoes raised after Liberation was not safe to be imported to England, and was therefore sold to France. This was unsatisfactory from a financial point of view, and so the following year the crop was taken up by the Army of Occupation on the Rhine. By the season of 1947 sufficient progress had been made in the elimination of the beetle to allow crops from unaffected areas to enter England, and once again normal trading, in so far as controls of all kinds would permit, was resumed. Jersey is a two‐crop island and potatoes must be succeeded by tomatoes if the highly‐priced land is to be made to pay for itself. So while the first of these crops was just paying its way, the second was expected to clear costs and to make the farmer or grower his profit. When it looked as though this might be possible this season the islanders came up against another, and quite unexpected, snag—too much fine weather. It may sound ungrateful to say this, in view of the many thousands of visitors which the continued sunshine brought to the island, and actually the farmer was glad enough to have the fine dry days in which to get his work done. But it reacted against him by bringing on his fruit too early and all at once, which meant that it arrived upon the market when there were still quantities of Guernsey and English glasshouse tomatoes as well as Dutch and other foreign‐grown available, and Jersey shipments were so heavy that they caused a glut. Where a grower is situated near an industrial or residential area he has the opportunity in such circumstances of disposing of at least part of his fruit as it ripens, by retail or direct sale, even if only to passers‐by. But on an island where three‐quarters of the population is engaged in growing tomatoes or in handling them in some way, everyone is soon sick of the sight of them and it is impossible to give them away if a glut occurs. That happened this summer when on two occasions of several days each it was necessary for the authorities to prohibit picking the fruit. The island crop must be gathered when it is first turning from green to yellow in order to allow it to ripen during the process of grading, packing and transit by sea and rail to the wholesale distributors, and thence via the retailer to the ultimate consumer. Therefore, when the position arose that the distributors could handle no more of the 12 lb. trays and the order went out that no more fruit should be picked there were many thousands of these containers en route between the farmsteads and the ships which awaited them at the quayside. All this fruit became useless within a matter of hours, and the only thing to do with it would have been to drive to a disused quarry or to the seashore and dump the lot, had it not been for the local canning factory. Jersey Canners Ltd. has been in existence from the early days of this century, but were not in a position to handle a great deal of produce until this year, when they were taken under the wing of the National Canning Co. Ltd., with Mr. S. W. Smedley in control. A great deal of this surplus was therefore taken over by this factory and converted into puree and sauce, as well as being canned whole. The development and processing of the fruit in this way is a story of its own, but perhaps the most interesting feature of this factory's work is that of the preparation of tomato juice on a commercial scale. This latter process, as apart from the more usual methods of dealing with the tomatoes, was due to the foresight of Mr. Smedley, who early this year visualised the possibilities of utilising any surplus crop and thus, when the position arose, was able to put upon the market the first tins of pure tomato juice ever to have been produced commercially outside of the U.S.A. To do this it was necessary to install an American pre‐heating vacuum pasteurising machine, but all other necessary mechanical appliances are British. These consist of endless belting, elevator, seamer, rotary cooker and cooler, and labelling machines. On arrival at the factory the fruit is conveyed from the lorries by roller belt to the elevator leading to the rotary washing machines. After thorough cleansing it passes on to a sorting belt, where diseased and immature samples are discarded and the remainder are stemmed by a small staff of women. The fruit is then fed automatically to the chopping machine and after treatment it experiences its first heating in the pasteuriser. This prepares it for the actual juice extraction, which is carried out in a machine which discards the cores, skins and seeds, and pumps the pure juice back into the pre‐heater, where it is pasteurised at a temperature of 180 degrees. After passing through this process the juice flows to the automatic filling machine, which handles 60 cans per minute, and so to the seamer, where the lids are sealed down before the cans pass into the cooker. This is an automatic rotary machine which ejects the cans after 15 minutes at a temperature, of 212 degrees. They are then cooled off for ten minutes in a cold water tank and set aside for labelling. The purely mechanical processes here described appear to make the preparation of tomato juice a simple matter. Actually, however, it is one requiring much investigation into the problems of fermentation, colouring, etc., beforehand, and careful attention to temperatures and timing of the various processes while in operation. Cooking of the juice is effected by steam with the cans in a vacuum, this process conserving the vitamin contents and the natural colouring of the juice, two most important features which would be sacrificed if the liquid was exposed to the light at a high temperature. The plant at present installed at Messrs. Jersey Canners Ltd. is capable of handling up to four tons of fruit per hour and has been turning out about 30,000 cases of assorted 16 oz. and 32 oz. cans per month during the height of the rush period. At that time the factory was working right round the clock with the aid of volunteer workers, many of whom put in time at night after their own day's work, in order to save as much as possible of the crop that would otherwise have been thrown away.

Business cycle theory is normally described as having evolved out of a previous tradition of writers focusing exclusively on crises. In this account, the turning point is seen as residing in Clément Juglar's contribution on commercial crises and their periodicity. It is well known that the champion of this view is Schumpeter, who propagated it on several occasions. The same author, however, pointed to a number of other writers who, before and at the same time as Juglar, stressed one or another of the aspects for which Juglar is credited primacy, including the recognition of periodicity and the identification of endogenous elements enabling the recognition of crises as a self-generating phenomenon. There is indeed a vast literature, both primary and secondary, relating to the debates on crises and fluctuations around the middle of the nineteenth century, from which it is apparent that Juglar's book Des Crises Commerciales et de leur Retour Périodique en France, en Angleterre et aux États-Unis (originally published in 1862 and very much revised and enlarged in 1889) did not come out of the blue but was one of the products of an intellectual climate inducing the thinking of crises not as unrelated events but as part of a more complex phenomenon consisting of recurring crises related to the development of the commercial world – an interpretation corroborated by the almost regular occurrence of crises at about 10-year intervals.

With this number the Library Review enters on its ninth year, and we send greetings to readers at home and abroad. Though the magazine was started just about the time when the depression struck the world, its success was immediate, and we are glad to say that its circulation has increased steadily every year. This is an eminently satisfactory claim to be able to make considering the times through which we have passed.

Many jurisdictions fine illegal cartels using penalty guidelines that presume an arbitrary 10% overcharge. This article surveys more than 700 published economic studies and judicial decisions that contain 2,041 quantitative estimates of overcharges of hard-core cartels. The primary findings are: (1) the median average long-run overcharge for all types of cartels over all time periods is 23.0%; (2) the mean average is at least 49%; (3) overcharges reached their zenith in 1891–1945 and have trended downward ever since; (4) 6% of the cartel episodes are zero; (5) median overcharges of international-membership cartels are 38% higher than those of domestic cartels; (6) convicted cartels are on average 19% more effective at raising prices as unpunished cartels; (7) bid-rigging conduct displays 25% lower markups than price-fixing cartels; (8) contemporary cartels targeted by class actions have higher overcharges; and (9) when cartels operate at peak effectiveness, price changes are 60–80% higher than the whole episode. Historical penalty guidelines aimed at optimally deterring cartels are likely to be too low.

THE new library building has been open for six months now. It is pleasantly situated in an area of new buildings, and occupies a prominent island site just on the edge of the shopping centre. The old library was in the middle of a shopping area, and it has been interesting to note that our removal from that site has had a more considerable effect on the traffic pattern than one would have thought.

Allyn Young′s lectures, as recorded by the young Nicholas Kaldor, survey the historical roots of the subject from Aristotle through to the modern neo‐classical writers. The focus throughout is on the conditions making for economic progress, with stress on the institutional developments that extend and are extended by the size of the market. Organisational changes that promote the division of labour and specialisation within and between firms and industries, and which promote competition and mobility, are seen as the vital factors in growth. In the absence of new markets, inventions as such play only a minor role. The economic system is an inter‐related whole, or a living “organon”. It is from this perspective that micro‐economic relations are analysed, and this helps expose certain fallacies of composition associated with the marginal productivity theory of production and distribution. Factors are paid not because they are productive but because they are scarce. Likewise he shows why Marshallian supply and demand schedules, based on the “one thing at a time” approach, cannot adequately describe the dynamic growth properties of the system. Supply and demand cannot be simply integrated to arrive at a picture of the whole economy. These notes are complemented by eleven articles in the Encyclopaedia Britannica which were published shortly after Young′s sudden death in 1929.

The very large number of books at present being issued relating to, or connected with the War, conclusively shows to what a great extent the intellectual as well as the material strength of the nation is engrossed by the terrible struggle in which we are engaged. But without abating any of our own interest in the supreme events now taking place, we may well pause to remember that things will not always be thus, and consider carefully before we crowd our shelves with works that are in many cases of very ephemeral value.