Oliver E. Williamson Quotes
Vertical intergration is an organizational response to the contracting difficulties that attend intermediate product markets where trades that are supported by transaction-specific assets are exposed to hazard.
Williamson, Oliver E. The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting. New York: Free Press, 1985.
Fogleman came out of retirement at the request of Air Force General Bernard Schriever, Commander of Air Force Systems Command, which was responsible for acquiring all missiles. He oversaw 40 percent of the Air Force budget most of which was spend on procurement contracts with companies. Schreiver wanted an experienced business man to oversee his procurement. In 1964 Foglemen volunteered to start up and train the procurement department for Sargent Shriver, President Johnson’s designee to direct the War on Poverty. 210 Job Corps Centers had to be constructed and corporations hired to operate the largest ones—all within a two year span. Fogleman faced the same problem where the Federal officials responsible for the Job Corp had very little business experience. He was very successful and persuaded Shriver and his key staff to hire a cadre of people with business experience and pay them at the high end of the Federal pay scale. The unit met the President’s deadline and obtained great prices, making exemplary use of taxpayer’s money. Fogleman retired for the third time, and after a few years the Job Corps was transferred to the Labor Department and the typical government procurement staff and norms began to operate. Forlleman and General Schreiber were unable to institutionalize Fogleman’s methods and after the General retired, the command that had been so effective for a few years, reverted to standard DOD procurement. See {634893} for a quotation of one of Fogleman’s trainees on military procurement.
This quotation illustrates how the super rich can actually profit from recessions and market crashes. As long as they are rich enough not to have to sell anything at the depressed prices, they have the operational advantages that Harriman articulates plus they can usually buy more assets cheaply. The super rich generally have been able to do very well in economic crashes while the rest of society usually suffers.
This was an excellent prediction. Canada was one of the largest targets of American capital investment.
Oliver Eaton Williamson was an American economist, a professor at the University of California, Berkeley, and recipient of the 2009 Nobel Memorial Prize in Economic Sciences, which he shared with Elinor Ostrom. His transaction costs theories are influential in the social sciences.
