ABSTRACT
The firm is characterized succinctly in the neoclassical paradigm in essence as a black box which connects factor and product markets and, in the course of this, maximizes profits. The black box firm not only links factor and product markets but is a powerful political force at all levels of government. To the institutionalists, the firm is a social institution engaged in production and profit-making with traditions or customs manifest in a web of rules which evolved over the course of time, rules which control and limit individual action. Economic historians and others have also studied the lives of major entrepreneurs including their brilliance with respect to the development of new products new processes of production and the strategy and technique of monopolization Karl Marx, an admirer and follower of Adam Smith, based the emergence of the manufacturing firm on Smith's productivity enhancing division or specialization of labor:.
