The History of the Distillers Company, 1877-1939: Diversification and Growth in Whiskey and Chemicals (review)

Ronald Weir earned the sobriquet “the whiskey man” in a time when writing about the Scottish national drink appeared slightly immoral. Fortunately, attitudes have changed over twenty years. As one result, we now have the good doctor’s finest whiskey book to date, a book extraordinarily rich in previously unearthed facts about the Distillers Company, Limited (DCL), sometimes fascinating in context, and significant in its contribution to the “British entrepreneurial failure” debate.

One way of cutting the deck sees business histories as comprising two sorts: “inside-out” versus “outside-in” books. Inside-out books tell us that the truly important events went on within the particular firm or industry; the broader context has no great significance. They tend toward Whig history, the self-serving slap on the back. Outside-in books place the individual firm(s) or industry within broader contexts—players within the play. David Halberstam’s book The Reckoning (New York: William H. Morrow, 1986) stands as a superlative example. How does The History of the Distillers Company rate? At the outset, it seems like an inside-out sort of book, strong on facts, weak on historical context. Then something remarkable happens within this Whiggish book: it metamorphoses into an outside-in sort of book, one describing the fascinating, simultaneous evolutions of the second chemical revolution and the emergence of the large, diversified British firm.

Two events chronicled in the book highlight the contrast. Weir opens with the early-nineteenth-century story of innovating to achieve continuous distillation: the “patent” or Coffey still replaced less efficient batch distilling. How would the reader know that a landmark event in the empirically driven first chemical revolution had occurred? The book provides no context, either scientific or, for that matter, social. When Weir reaches DCL’s transition period from a whiskey baron’s amalgamation to an entrant into the modern chemicals industry, however, things change. An exciting competition within the new field of applied organic chemistry lends international drama and intrigue; the story gains historical context. DCL can now be seen to struggle to catch up in the new high-stakes poker game of research-driven technology competition.

Again, the split perspective of the book appears when Weir abruptly reveals that he possesses previously unknown insider knowledge of DCL’s twentieth-century executive workings. He offers new evidence that argues against the backward picture of DCL painted by the contemporary press and by scholars to date. His authority for his assertions? Weir believes that boardroom talk tells the truth better than the news journalists can guess it. Does it all make as compelling a read as Halberstam? Not quite, but The History of the Distillers Company is nevertheless entertaining and very informative.

In the first part of the book, Weir takes a near miss at articulating the significance of the new large-scale manufacturing processes with their attendant high-fixed-cost/low-variable-cost structures. Static capital-output ratios miss all the dynamics of competitive striving among giants for the sales volumes that make such cost structures pay. (Naomi Lamoreaux, in The Great Merger Movement in American Business [Cambridge: Cambridge University Press, 1985], gets all of this right.) Weir also labors under the limitations of an outmoded analytical apparatus. He writes of “rationalization,” for instance, rather than of “economies of scale”—strange and disappointing, given that he clearly has read and absorbed Alfred Chandler.

Then, in the second book within a book, he gives us an instructive peek under the tent flap at the world of DCL executive decision making. The view we get should dismiss the idea that British firms invariably experienced entrepreneurial failure in the interwar years. William H. Ross, managing director of DCL, more than once “bet the firm” in his pursuit of success through diversification, all the while juggling the conflicting needs for large-volume outputs from new...