In 1918, Lytton Strachey published Eminent Victorians, a biography that re-wrote the history books on some of the Victorian era’s greatest national heroes. He cut through the sentimental patriotism and deference that characterised the biographies of the time, an exercise in telling it like it is that changed the way we think of public figures.
Andrew Simms and David Boyle are out to do something similar with Eminent Corporations – the rise and fall of the great British corporation. The book tells the stories of eight famous British companies, exploring their origins and development, through to their current success or failure, as the case may be. Intertwined with the histories of the companies are the rise of the corporation as a legal entity, the machinations of government intervention, the economic consequences of war, and the complications of globalisation. It’s a book that adds up to rather more than the sum of its parts.
The stories are told in order of antiquity, beginning with the East India Company, a vast monopoly that secured concessions to all Britain’s trade in India. For over a hundred years it controlled governance and security across the region as well as trade, and accounted for one in every seven pounds of imports into Britain. Although no corporation has enjoyed the power and scope of the East India Company since, it set a template for future business, through the securing of monopoly rights, aggressive expansion, financial speculation, and an the all consuming pursuit of profit.
Interestingly, Adam Smith recognised the East India Company as a social evil. “Negligence and profusion must always prevail” he warned, “in the management of the affairs of such a company.” Later editions of his Wealth of Nations included a chapter explaining why corporations were a bad idea, a fact missed by many proponents of free trade today.
One gets the impression that Smith’s suspicions would have been confirmed, reading through the corporate histories here. Though each company is different, there are common themes – the difficulty of holding corporations accountable, the compromising of founding values, and the tendency towards monopoly control, through the merging and subsuming of competitors.
There are also lots of great stories here, some remarkable individuals with some very good ideas. I love the utopian vision of Cadburys and their sense of responsibility towards workers. The Quaker roots of Barclays Bank are inspiring, the pacifist principles that meant it would not lend to finance war or slavery. Marks and Spencer is a real rags to riches tale, a Jewish refugee who spoke no English, driven out of Russia and founding a retail empire that endures as one of Britain’s most recognisable high street brands. As each chapter moved along, those founding visions become increasingly blurred, high ideals abandoned in politics, boardroom battles, the needs of shareholders. In fact, taking a company public emerges as one of the most damaging things a company can do – many of the companies here lost control of their founding ethos the moment they became answerable only to the shareholders and the profit motive. In fact, the last chapter profiles Virgin, a much more recent venture that may have learned from those past experiences. Richard Branson only ever floated a third of the company. He regretted even that and the loss of freedom it brought, so he bought all the shares back during the stock market collapse in 1987, and it has been a private company ever since.
The authors play it pretty straight, letting the corporate histories speak for themselves, although the chapter on BP betrays more exasperation than others. As you would expect from Andrew Simms and David Boyle, there’s a new economics agenda at work too – their last book together was The New Economics after all, and Simms is the author of the corporation-baiting Tescopoly. The closing chapter calls for a ‘corporate reformation’, a reassessing of the corporation model in a world of climate change, resource depletion and debt, and a move towards more human structures, co-ops and social enterprises. It references E F Schumacher’s philosophy of work, The Spirit Level, John Kenneth Galbraith, and hints at all kinds of alternative ownership structures, from Barcelona football club to Waitrose.
“The leviathan corporations, automaton-like in their pursuit of shareholder value and the power and prestige that come with size, look increasingly out of step with the modern world” they conclude, suggesting that the emerging economy will be more like “a rugged, vibrant and diverse ecosystem compared to a vast and vulnerable monoculture”. With the economy and still reeling from the consequences of the ‘too big to fail’ doctrine, that’s got to be a good thing.
Eminent Corporations is a set of fascinating portraits of some of Britain’s best loved companies, celebrating their successes and documenting their failures in equal measure. It’s also a gentle but insistent prod towards something better.