Business Cycles was Joseph Schumpeter's least successful book, measured by its professed aims and several other yardsticks. Yet the book has two vital aspects that have largely been overlooked. First, the prodigious research that went into its writing caused a significant change in Schumpeter's thinking about capitalism. It moved him to a more historical and empirical approach that shaped nearly all his subsequent work. And second, much of the book constitutes a preview of modern, rigorous business history. This article explores both of these elements—not in the spirit of rescuing a neglected classic, because the book is not a classic. Instead, Business Cycles is a noble failure that paid unexpected dividends both to the author and to scholarship.

The Mittelstand sector of the German economy, which is made up of small and medium-sized family firms, is generally not mentioned in debates about German capitalism. This article makes the case that the focus of research on the German economy should shift from large corporate structures to these smaller firms. The classic Mittelstand model, which dominated the economy until about 1970, was characterized by identity of ownership and management, strong emotional investment by owners and staff, and an emphasis on continuity, paternalism, and independence. Beginning in the 1960s, this model was undermined by fundamental changes in the country's economic and sociocultural environment. In response, the firms abandoned a number of their traditional attributes, a process that led to the demise of some businesses and the regeneration of others. Although the modern form adopted by the surviving Mittelstand firms allows them to be less dependent on individual families, to enjoy more access to external capital, and to display more openness and international orientation, they can no longer rely on the prospect of long-term stability, as they did in the past.

The primary importance of long-distance telephone service to the American Telephone and Telegraph Company in the first two decades of the twentieth century was not commercial but organizational and political. The so-called Bell System was not a single firm before 1910 but was, rather, an association of regional companies with considerable autonomy. As AT&T's leaders worked both to overcome independent competitors and to curtail the autonomy of their own local affiliates, long-distance service offered them a powerful technological justification for the consolidation of control. Outside the Bell System, long distance also served as a vivid symbol of interconnection and integration. Long distance proved central to AT&T's campaign to convince Americans of its own legitimacy and that of nation-spanning corporations in general.