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Contextualizing the Corporation
Thomas K. McCraw, ed. Creating Modern Capitalism: How Entrepreneurs, Companies, and Countries Triumphed in Three Industrial Revolutions. (Cambridge, Mass.: Harvard University Press, 1997). Pp. xii, 711. $59.95 cl., $29.95 pb.
Neil J. Mitchell. The Conspicuous Corporation: Business, Public Policy, and Representative Democracy. (Ann Arbor: University of Michigan Press, 1997). Pp. 249. $42.50 cl.
William G. Roy. Socializing Capital: The Rise of the Large Industrial Corporation in America. (Princeton: Princeton University Press, 1997). Pp. xv, 338. $45.00 cl., $18.95 pb.
In recent years, historians, political scientists, and historical sociologists have moved beyond the technological and economic determinisms that have for so long dominated scholarship on the rise of the modern corporation, and have begun to write a history of big business that is sensitive to contingency, the legacy of past institutional arrangements, and the vagaries of time and place. This contextualist reconsideration should be particularly welcome for readers of this journal, since it has generally been accompanied by a renewed appreciation of the role of governmental institutions as an agent of change. Unfortunately, this scholarship is often overlooked by neoclassical economists and other policy analysts who persist in treating the corporation in highly reductionist terms, and, more often than not, in demonizing public policy and the state. Each of the three books under review is a partial corrective to this view and, in different ways, reminds us that current assumptions about government-business relations are a poor guide to the past [End Page 287] and may well provide us with a misleading view of the future.
Neil J. Mitchell's Conspicuous Corporation sets out to explain why, despite their formidable advantages in the policy process, business leaders in the United States and Great Britain have sometimes failed to secure sought-after legislation. Drawing primarily on recent survey data, Mitchell documents the various advantages that business leaders enjoy as well as the obstacles they have sometimes confronted. The very fact that the corporation is "conspicuous," he concludes, makes it, at least in certain circumstances, an easy target.
Among the business setbacks that Mitchell considers are recent environmental and safety legislation, the collective-bargaining clause in the Wagner Act of 1935, and the abolition of the slave trade in Great Britain in 1807. Business leaders are most likely to fail to shape the policy process, Mitchell concludes, when their objectives conflict with policymakers' conceptions of desirable outcomes and the interests of their constituents. This is a plausible--if hardly earthshaking--conclusion, and is intended to remind Mitchell's fellow political scientists of the importance of cultural norms, civic activism, and what he calls the "calculated heroism" of political leaders (219). Mitchell intends his hypothesis as a critique of the political scientist Charles Lindblom, who, in Mitchell's view, has exaggerated the influence of business in the framing the public policy.
More ambitious in conception is William G. Roy's Socializing Capital, a stimulating sociological analysis of the rise of big business in the United States in the late nineteenth century. Like many sociological works, Roy's book can be tough going, and it conspicuously lacks the taut prose and narrative energy that animates such related efforts as Paul Starr's Transformation of American Medicine. Yet it does repay careful study and, at the very least, will send interested readers scurrying to check out the sources upon which it is based.
Roy, a sociologist at UCLA, frames his work as a critique of the well-known thesis of the influential business historian Alfred D. Chandler Jr.--who has argued, in a series of books, that the rise of the modern industrial corporation is best explained as a product of expansion of the market and the spread of new technologies. Far more important, Roy contends, were concurrent developments in finance, politics, and law.
Roy's account focuses on two periods: the early republic and the great merger movement that spanned the half-decade between 1898 and 1903. How, Roy asks, did the corporation--an organizational form that...