Taming the Octopus: The Long Battle for the Soul of the Corporation

by Kyle Edward Williams

A groundbreaking history of corporate social responsibility shows how efforts to hold big business accountable changed American capitalism. Recent controversies around ESG investing and “woke” capital evoke an old the Progressive-era vision of a socially responsible corporation. By midcentury, in fact, the notion that business leaders could benefit society had become a consensus view. But as Kyle Edward Williams’s brilliant history shows, New Deal liberalism realized a kind of big business supervision narrowly focused on the financial interests of shareholders. This inadvertently laid the groundwork for a set of fringe views to become that market forces should rule every facet of society. Along the way American capitalism itself was reshaped, stripping businesses to their profit-making core. As a rising tide of activists pushed corporations to account for societal harms from napalm to seatbelts to inequitable hiring, a new idea that managers could maximize value for society while still turning a maximal profit. This elusive ideal, “stakeholder capitalism,” still dominates our headlines today. Williams’s necessary history equips us to reconsider democracy’s tangled relationship with capitalism. 4 line illustrations

Genres: Economics, History, Business, Nonfiction, Politics

304 pages, Hardcover

Published February 20, 2024

Reviews

[Marks54 · Rating 3 out of 5]

I had high hopes for this book but ultimately found it to be disappointing. As the title suggests, the book is framed around the threat posed to the economy and to society more generally by the diversified and overly acquisitive menace of the Standard Oil Trust. The idea from the start is that the newly dominant industrial corporation became powerful and ubiquitous and needed to be reigned in moderated by … who? The state? Non-governmental actors? The firms themselves? Concerned citizens? … you get the idea, I hope. Which of these directions one chooses to follow will dictate what sort of book develops from the initial framing. Each direction would provide the grist for a substantial account and a potentially informative book. What we got, however, was a little bit of this, a little bit of that, throw in a dash of corporate self-regulation, and what you get is a general history of how the broad area know as “corporate social responsibility” - or several related buzzy terms — developed into the public consciousness and remains there today (think ESG and related more recent trends). The account is largely historical and goes up through the 2008 crash, although there is some mention of what came afterwards.

The problem is that while many will quickly agree with (or at least acknowledge) the issues of excessive corporate power, few are willing or able to invest in establishing some sort of infrastructure to regulate and control the excesses of corporate power. Let’s everybody go back to the 1860s with a 2024 US population of 300+ millions to feed and employ! So not that much of lasting impact occurs and for every step forward, there rapidly appear new actors to exploit new possibilities for power, influence, and wealth. This result is understandable and even predictable from the start. I am sure I am not the only one who saw it coming.

A related disappointment is that the book is also concerned with what names were applied to efforts to conceive of and explain the purposes of the corporation from shareholder value to stakeholders to other issues in addressing environmental and societal concerns. There are lots of stories that have been told about the purposes but apart from market-based ones, they have been consistently underdeveloped and unsatisfactory.. I have been reading these explanations for years and having them all collected in a single history does not make the result any more satisfying or reasonable. The idea of “stakeholder” management is a good example. In its basics, one can trace it back to Chester Barnard in “The Functions of the Executive” although he may have not used the exact term. That an entire academic and pundit based industry has developed around it in the absence of any real theory or research is downright depressing and indicate the proliferation of buzzwords more than anything resembling real change

I could go on but the general story arc is way too broad to be done well. I ran into little in the book that I did not already know. The critique of corporate efforts at self-management as self-serving was on-target and valuable. The combining of various theoretical stories, some of which argued for a much more market driven story, and others which argued for a more regulated and less market driven story was confusing. How does following Henry Manne’s work constitute “taming” of the Octopus? Some of the examples and stories of key individuals were interesting but they do not together compensate for the limitations of the book.

I wanted to get more from this book and was disappointed.

[Marlowe Glass · Rating 5 out of 5]

I will be the first person to concede—a book about corporate social responsibility? Yawn. Blah. Who cares?

However, Williams beautifully intertwines micronarratives of individual actors—like Louis Wolfson, whom I now adore—into a sweeping account of the nonlinear development of anti-monopoly sentiments throughout the 20th century. Well, maybe "anti-monopoly sentiment" is a bit reductive or an entirely inaccurate way to describe his argument. Maybe "theories of corporate social responsibility" is a better replacement. In any case, 100000/10. I absolutely loved it.

[Roger · Rating 3 out of 5]

"What is the corporation good for?"

This review of the history of the corporation (almost exclusively focused on the US version) is quite good at description but lacking in prescription. There are allusions to the shortcomings of the corporate form, especially in the Milton Freedmanesque "maximize shareholder [at the expense of all other] value" manifestation, but the author gets fuzzy in the end about what he'd do about that. Abolish the corporate form altogether, significantly modify governance to be more inclusive of other stakeholders? Or something else?

[Lloyd Fassett]

2/24/24 Found it through a wall st journal Saturday Review. It sounds line a good bit of Business History with regard to balancing capitalism with the purpose of why we have a society and government at all.

[Emily · Rating 3 out of 5]

maybe more like 3.5.