Free Economics Dissertations - It Was A Company, Lever Brothers, That Introduced Us To The Concept Of ‘bo’
It was a company, Lever Brothers, that introduced us to the concept of ‘BO’ (it was not enough to produce satisfactory soap’, Joseph Schumpeter once observed. ‘It was also necessary to induce people to wash’). It was a company, McDonalds, which was credited with teaching the Chinese how to queue hypothetically.
Early History
The early history of companies was often one of imperialism and speculation, of appalling rip-offs and even massacres. People who now protest about the new evil of global commerce plainly have not read much about slavery or opium. People who talk in terrified tones about the unprecedented skulduggery at WorldCom seem to have forgotten about the South Sea Bubble. Those who fear the unparalleled might of Bill Gates could do with a little reading on J.P. Morgan. Today, the number of private-sector companies that a country boasts, the United States had five and a half million corporations in 2001, North Korea, as far as we can tell, none, is a better guide to its status than the number of battleships it can muster. It is also not a bad guide to its political freedom. This leads to the point in which the West’s success owes much to technological prowess and liberal values. But Lowe and Gladstone ushered in an organization that has been uniquely effective in rendering human effort productive. The idea that the company itself was an enabling technology is something that liberal thinkers once understood instinctively. The limited liability corporation is the greatest single discovery of modern times, proclaimed Nicholas Murray Butler, one of the great sages of the progressive Era; even steam and electricity would be reduced to comparative impotence without it.
Economists worldwide believe that Companies increase the pool of capital available for productive investment. They allow investors to spread their risk by purchasing small and easily marketable shares in several enterprises. They provide a way of imposing effective management structures on large organizations. Of course, companies can ossify, but the fact that investors can simply put their money elsewhere is a powerful tool. By contrast, civilizations that once outstripped the West yet failed to develop private-sector companies, notably China and the Islamic world, fell farther and farther behind. It cannot be just coincidence that Asia’s most conspicuous economic success is also the country that most obviously embraced companies, e.g. Japan.
THE FUTURE OF THE COMPANY
In 1912, Woodrow Wilson, then on the verge of becoming president, surveyed American society with evident dismay. He lamented the rise of vast corporations, and the way that they were transforming freeborn Americans into mere cogs in the great industrial machine. ‘We are in the presence of a new organization of society’, he argues; ‘Our life has broken away from the past’.
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