Firms, Networks and Business Values: The British and American Cotton Industries since 1750 (review)

Firms, Networks and Business Values: The British and American Cotton Industries since 1750. By Mary B. Rose (New York, Cambridge University Press, 2000) 352 pp. $64.95

In Firms, Networks and Business Values, Rose offers a broad, comparative synthesis of the business history of the cotton textile industries in Britain and the United States since 1750. Based on a wide reading of the secondary literature, Rose provides rich, detailed comparisons of the interconnections between business behaviors in each industry and industry structures, markets, and legal and political influences in Britain and the United States, respectively. Her final chapters offer a thoughtful comparison of the course of textiles' industrial decline in both countries.

Rose's is a dense but rewarding treatment. The primary focus in the first half of the book is on the "causes and consequences of varying types of family firm networking" in the cotton textile industries of the two countries (10). In her analysis, Rose looks at the ownership patterns and management practices of cotton textile firms in Lancashire and in the geographically dispersed textile industry in northern New England, Philadelphia, and the antebellum South. She discusses the different ways in which family connections operated within the two cultures and across regions within the United States, revealing, among other things, the unique emergence of the corporate form in the Boston region, the collective nature of American textile management in the nineteenth century, and the different relations between industry and the state in the United States and Britain. Free trade predominated in Britain, whereas relatively high tariffs in the United States provided important protection for New England industry. Although the United States relied on experienced British operatives and British machinery for its early development, a unique industry structure emerged; the vertical integration of spinning and weaving processes was much more likely in the United States than in Britain. Moreover, U.S. firms typically produced mass goods for a broad, domestic market, adapting to the high turnover and limited skill levels of their workforce. In Britain, specialized niche firms relied on a more permanent, skilled male workforce, and over the course of the nineteenth century, depended more on export sales than was common in the United States.

The growth of the two industries after the American Civil War was shaped by the nations' distinctive imperial experiences. The British came to depend on markets in India and China, in particular; U.S. firms relied on a mass, domestic market. Rose argues against taking an "exceptionalist" view of the divergences between business practices in the two countries, opting instead for an approach that emphasizes the "entirely different competitive processes" in the respective industries (196).

Deindustrialization provides a focus for the final third of the book, in which Rose examines cotton textiles' decline since World War I. Over-capacity in a period marked by the Great Depression provides a link between the two stories in the interwar years. In adjusting to world depression, mercantile interests played a more significant role in Britain than in the United States, but the emergence of the Commonwealth as a zone of privileged trading undermined British exports. The British industry declined more rapidly and lost much greater ground than did the American industry during the twentieth century. By 1980, American output was more than ten times that of Britain (251). The greater size of the American domestic market and the success of American industrial leaders in maintaining high tariff barriers around it largely account for the nations' differing experiences of industrial decline.

Rose has produced a nuanced comparative picture, attuned to national differences as well as regional variations within national settings. She eschews monocausal explanations or a reliance on innate cultural differences, offering instead a complex analysis of interconnections across various dimensions of economic and business life in Britain and the United States. Thus does she successfully bring into focus the different national experiences of...