This is a spectacular book whose title only hints at its true ambition. Economist Richard Langlois brings depth to both the overarching framework and to finely crafted historical details. The book’s broad scope and rigorous analysis across 816 pages (a mere 550 pages of main text with extensive endnotes) can only be hinted at in a review.
At heart, Langlois offers a retelling of the conventional view of the rise of the managerial corporation that Alfred Chandler wrote on nearly fifty years ago in The Visible Hand. Chandler’s triumphalist account of the large, multidivisional, vertically integrated corporation was published in 1977, ironically just as the shifting economic sands and corporate raiders were already beginning to transform corporate life. Until that decade, the story seemed one of linear progress away from personal, entrepreneurial capitalism and toward managerial experts. This theme of a competent managerial elite replacing the messiness of the invisible hand of the market extended beyond the business world to policy and politics more broadly. This context is not lost in the book, and Langlois evokes the broader zeitgeist, drawing on the words of figures such as Herbert Croly and John Kenneth Galbraith.
Langlois’s core task is to explain the rise of managerial corporations in the late 19th and early 20th centuries in light of the fact that market forces later dismantled these same large corporations in the late 20th and early 21st centuries. He does this with a deceptively simple theoretical argument and detailed economic history to substantiate his claims. I’ll examine these dimensions in turn.
The theoretical argument is straightforward. Building on the foundational work of Ronald Coase, we know that economic activities are organized within firms when the cost of achieving them via market transactions would be higher than organizing within the firm. That is, the visible hand of an integrated firm replaces the invisible hand of market relations when it is profitable for it to do so.
Langlois argues that large corporations proliferated in the late nineteenth and early twentieth centuries not because they were a permanently superior institutional form, but because they filled a temporary institutional gap. Rapid technological change outpaced the development of market-supporting institutions—the legal frameworks, financial markets, and infrastructure that enable decentralized coordination. In this environment, integrated firms could organize complex production more efficiently than fragmented markets could. These corporations weren’t naturally better at resource allocation; they were simply the best available solution given the institutional constraints of their era. By the late twentieth century, as market-supporting institutions matured, the advantage of large integrated firms diminished, and many were dismantled or reorganized.
After an introductory chapter introducing the main concepts and the nuanced argument of the book in précis, the eight additional chapters and the long epilogue are arranged chronologically. The author deftly weaves a narrative that combines corporate, intellectual, and political history all analyzed through the mind of an economist who has read the empirical economic literature on relevant topics. At various stages, Langlois explains the role of these different forces on the organizational form of the corporation. The result is a synthesis—patchwork in parts—of the various threads needed for this multifaceted undertaking. Readers may get mired in the detail at times, but the amazing thing about Langlois’ enterprise is that he pulls it off and the result is a magisterial book that deserves to be read widely.
These varied threads are necessary because Langlois argues for the role of contingent history in the rise of the Chandlerian corporation. The role of government misapprehensions about business practices played a serious part in the tendency towards certain types of structures. Technological change and economies of scale can explain some industries, but the phenomenon was much broader. Furthermore, the continued dominance of the Chandlerian corporations is explained by the absence of sophisticated decentralized markets the development of which was hampered by antitrust efforts and shocks. There was a reason the market forces which rose at the end of the 20th century did not emerge in midcentury: the chaos of economic turbulence, world war and cold war. The space for an efficient make-or-buy decision was necessarily closed down when, as was often the case, the courts decided that contracts necessary for external contracting decisions are anticompetitive, or the empowered regulator like the Interstate Commerce Commission or Federal Communications Commission intervenes.
In the nineteenth century, commentators increasingly distinguished between closely held businesses and large businesses. Any history stresses the role of the railroad in the rise of professional management, but Langlois brings to life the economics of the business and the politics surrounding it. Through antitrust and regulations like those on the railroads, government changed the optimal institutional structure. Work in economic theory and history has helped explain the practices of businesses that contemporary legislators and regulators dismissed as anti-competitive.
Langlois’s argument is in summary that the business practices which led to government intervention were often efficiency-enhancing and the policy response was often harmful. When this included things like banning contracting practices this led to more business being done within the firm. This rather bold argument is aided by copious references to work in economics on 19th and 20th century business practices and the implications of government policy, making scholarship on this available to the general readers for the first time.
Perhaps most important for understanding the middle of the 20th century is the string of shocks, namely the two wars with unprecedented levels of war planning and the Great Depression that happened in the first half of the century. In general, these contingencies shifted the decision to bring elements within the firm instead of purchasing on the market. The years between 1914 and 1973 can in fact be viewed as the high watermark of state planning. As more time separates this period from the present, a conception of the degree of state planning and the worldview of the managerial elite in politics, economics, and business is lost.
Among the many terrible events, Langlois calls the Great Depression, the signal catastrophe and ‘a worldwide cataclysm that would alter the history of the century in the US more fundamentally and profoundly than even its two brutal wars’ (page 186). He argues, with supporting evidence, that for the United States the century’s worst year was 1933—the second dip in the Great Depression. Between the peak in 1929 and the low point in 1933 the Dow Jones dropped some 86 percent. Over this same time unemployment rose from 4 percent to 25 percent and estimates suggest that real per capita output dropped by 29 percent to a level not seen since 1901.
Drawing on the consensus in the literature, Langlois argues that this catastrophe was not caused by inherent features of capitalism that make it prone to break down or particular features of the 1929 crash itself but was the fallout from bad policy ideas which he dissects in detail. The crucial set of facts is that the Federal Reserve failed to act appropriately when it allowed the money supply to shrink and thereby unleashed the horrors of debt deflation. Beyond this central problem, the government attempted (among other things) to keep wages from falling in a delusional idea that high wages would allow the surplus of goods to clear. Many of the most egregious attempts of the New Deal were stopped by the courts, but there was a more general attempt to control markets.
In a key summarizing passage Langlois says of the Depression and war years:
The Second World War placed resource allocation even more firmly in the hands of the government and ushered in far more comprehensive nonmarket controls. Between fall 1929 and the end of World War II, prices in the United States often transmitted either false information or no information at all about relative scarcities, and many of the institutions upon which market exchange depended were hampered or destroyed. It is against this background, and not against a counterfactual backdrop of thick and well-functioning markets, that we must explain and appraise the rise of the large American corporation in the middle years of the twentieth century.
In a very interesting chapter, Langlois shows how dynamic market forces similar to those of the 1970s and beyond were already emerging in the 1920s but were diminished by the crisis. Across different industries innovative entrepreneurs were able to access capital and generate complex contracting networks solving assorted economic issues. General Motors and other companies (unlike Ford which because of its eccentric founder was steadfast in remaining optimized for the previous environment) would take advantage of responsive, modular supply chains. Even companies like DuPont sourced their patents not in the famous research labs of the midcentury but from acquisition. Much of this energy would become concentrated in the large corporations not because of their superiority as Chandler claimed, but because they were the only ones to survive the Depression. New restrictions on banking and forms of contracting limited new entrants and startups. Furthermore, the capacity of large firms to internally finance led to the growth of R&D departments at DuPont, GM, GE and others.
As Langlois writes:
The Depression and the policy responses to it had decisive consequences for the American corporation…. The dramatic monetary contraction, along with the failure of the Fed to act as an adequate lender of last resort, led to an amplifying cascade of bankruptcies and bank failures… this had the effect of destroying much of the capacity of the banking system, and of the financial system more generally, to supply financial intermediation. Small firms, which needed to rely on external capital markets, felt the effects far more than large firms, which could rely on internal financing and had close ties to large banks. Thus the Depression initiated or accelerated shakeouts in many industries. In some industries the process was Darwinian, with the most productive firms surviving; in others, survival depended simply on access to capital. At the same time, the New Deal instituted an unprecedented regime of price supports and entry restriction in financial, labor, and product markets. (187-88)
Absent these events one wonders how different the corporate world would have looked in the 1950s and 1960s.
Another merit of the book is the way it reflects on the way antitrust regulation, industrial policy and scientific and technological progress interacted and on the ideological and political context for them. Odd Progressive ideas underlay aspects of antitrust legislation and decisions of the FTC; odd monetary ideas underlay the decisions of the Fed. The science of industrial practices, whether in steel production or electronics, developed rapidly. Government and industry were closely intertwined in both world wars, and he discusses industrial policy at length in an even-handed but negative way. Another component of many chapters is Langlois’s focus on the role of finance, whether J.P. Morgan through the House of Morgan in earlier chapters or leveraged buyouts in the later chapters. Langlois also examines the form of pyramidal holding companies which was viewed as suspect by Progressives and partially banned in the New Deal. The demise of that form (unlike in the rest of the world) plays some role in explaining the American integrated firm and later conglomerates.
This level of historical detail and context makes the past come alive. Its coverage of the more recent past stands out as well. While the first 400 pages of the main text take readers from Standard Oil to Mad Men, the last 150 pages cover deregulation, disintermediation, and the rise of VC-backed startups. In the past decades, numerous books have been written about the revival of liberal thinking in the 1970s. Until that decade, for a variety of reasons, the story seemed one of linear progress away from personal, entrepreneurial capitalism and toward managerial experts. Many of these works suffer from depicting the changes as merely the actions of a few choice actors rather than a more widespread and diverse set of changes rooted in a disillusionment with the status quo. One illustrative example that Langlois discusses is the role of Ted Kennedy, no market fundamentalist, in the deregulation of trucking, rail, and air travel.
One of many dimensions to the book is that Langlois is seeking to undermine what he sees as a broader Progressive vision of society (he explains American Progressivism in detail and contrasts different varieties) that runs up to the present. The introduction and epilogue contain some understandably pointed remarks about the contemporary efforts by those on the right and left who have sought a more muscular state to regulate businesses. Many of these figures make explicit historical claims and hearken back to Progressive efforts to restrain the dominance of big business via antitrust and regulations banning practices like self-preferencing by Amazon. Building on the work of others, Langlois shows many ways in which past attempts failed to understand the efficiency of practices they villainized and how state regulation often empowered big business against markets and consumers. In doing so, he illuminates both past failures and the risks of repeating them. General readers may disagree with the broader view and specialists might have issues with one of the many episodes he covers, but The Corporation and the Twentieth Century is a tour de force.
‘The Corporation and the Twentieth Century: The History of American Business Enterprise’ by Richard N. Langlois was published by Princeton University Press in 2023 and came out in paperback in 2025 (978-0-691-24753-3). 816pp.
John Kroencke is a Senior Research Fellow at the Centre for Enterprise, Markets and Ethics. For more information about John please click here.
The Centre for Enterprise, Markets and Ethics was pleased to hold an event on 13 November 2025
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If one wanted to run a political campaign as an idealist left-leaning technocrat, this would be the book to write or use as manifesto. A Brief History of Equality is Thomas Piketty’s attempt to synthesize multiple years of research into a manifesto (albeit one published by Harvard University Press) that a politician could pick up to showcase not only a consistent vision of the world but also the remedies and solutions to make a better one.
Piketty argues there have been strong egalitarian forces—generated via political action leading to institutional and social change—that have worked to moderate the natural forces of capitalism that increase inequality (the argument for this natural tendency is the subject of his famous Capital in the Twenty-First Century). It was the twentieth century—particularly the period from 1914 to 1980—that generated a long egalitarian trend because this is when the egalitarian counterforces gathered momentum: progressive taxation, expansion of public education, greater regulation and social welfare program policies. Ultimately, the proposal is to continue and expand these policies.
Beyond this, any reviewer faces a struggle after reading the book. How should it be reviewed? As political manifestos go, this is outstanding work. There is substance and coherence. At the same time, however, I doubt how much a politician can win on such a manifesto because the remedies offered are also accelerants to the forces of populism and illiberalism. The politics of redistribution can lead to tensions between those who pay and those who receive. This is why numerous economists point out that policies reducing the size of the state (in both scale and scope) are associated with less populism.
For example, when using ‘economic freedom’ indices—which weigh components such as property rights protections, free trade, business regulation, monetary policy, and the size of government—in conjunction with measures of political populism (both right and left), one finds that ‘economic freedom’ depresses populism. In other studies, what some call ‘welfare chauvinism’ is what drives anti-immigrant feelings (nativism). As Krishna Vadlamannati and Indra de Soysa summarized, the ‘positive effect of a bigger immigrant share of the population on support for nativist populism is conditional upon higher degrees of social welfare’ spending. In other words, the book proposes remedies that have fueled the rise of the populist right and left.
It is not surprising, then, that in Piketty’s home country of France, the Rassemblement National of Marine Le Pen and Jordan Bardella (which seems poised to win in 2027) has been a confused mix of left-wing economic policies and right-wing identitarian ones. France, with its sprawling welfare state that goes well beyond what the near-totality of economists would call the optimally sized state, has already implemented most of what Piketty recommends—and it is precisely there that liberal democracy appears most threatened, both from the left and the right.
So, what if the book was reviewed on deeper grounds—that of the deeper scholarly arguments embedded in it? There, I feel I am hardly more positively inclined. This is because the book relies on research that has been heavily criticized in top journals and in ways that dramatically alter the interpretation of the evolution of inequality in western countries.
Consider chapters 6 and 7 where Piketty discusses the fall of income and wealth inequality from 1914 to 1980 and its partial reversal thereafter. Considerable (though not exclusive) attention is devoted to America in these chapters. The decline is causally assigned to the rise of the welfare state and higher tax rates on the rich. However, this ignores multiple works showing that inequality started to decline before 1914—an age tied to ‘laissez faire’ and free markets. The decline has recently been noticed when some researchers (including myself) pointed out that the prices of goods and services consumed by the poor fell faster than those consumed by the rich. This means there was ‘declining’ inequality in the cost of living. This most egalitarian force essentially reverses any increase in inequality between 1870 and 1914 between the top 10% and the bottom 90% and eliminates half of the measured increase in inequality between the top 1% and the bottom 90%. At the same time, there were massive improvements in living standards which means the poor were getting richer nearly as fast as the wealthy.
Then, when one accounts for spatial differences in price levels within the country (suggesting that real incomes differed less than nominal incomes), one further reduces the level of inequality. Because of internal migration, one also reduces the trend of inequality. Extending both adjustments from 1914 to 1941 shows that inequality did not behave at all as depicted. It either stagnated or declined between 1870 and 1941.
But this is not all. The tax data used has many known flaws that historians have long documented (and that contemporaries themselves knew about), but that Piketty has ignored even after their importance was pointed out to him. For example, it is well established that unlike today, tax evasion in America was the ‘poor man’s business’ prior to the introduction of tax withholding in 1943. This is because the IRS had too few resources to investigate anyone but the very rich, and it even advertised that it never really investigated tax returns below $5,000—essentially applying to everyone below the top 1%. The result was widespread evasion below the top 1%. This evasion affects both the estimate of income of the ‘higher income groups’ and the total income of society (because tax evasion also depressed the source materials downward). The result is that we know tax evasion leads to an overestimation of inequality before 1943. By how much? Take any estimate pre-1943 and cut one fifth of it—that is the effect of tax evasion below the top 1% on the estimates of inequality.
Probably most egregiously, Piketty, alongside his co-authors Emmanuel Saez and Gabriel Zucman, was shown to have misused and misunderstood the tax data they employed while making crude assumptions to estimate inequality—even though data that would have avoided these assumptions existed in an easily available form. Correcting these errors (which I documented here before), I have shown that the level of inequality prior to 1943 is overestimated by roughly one fifth of what is reported. Combining this with the effect of evasion mentioned above is difficult because the corrections for the multiple errors of Piketty and Saez overlap with some of those to correct for evasion. However, all the clearly independent corrections suggest that a quarter of pre-1943 inequality is ‘artificial’.
Moreover, most of the decline in inequality did not happen in 1943 with the advent of a more robust tax administration, higher tax rates, and a more generous welfare state. Most of it occurred between 1929 and 1935—during the Great Depression, when virtually everyone was getting poorer. Separate independent works have pushed in exactly the same direction. A large share of the decline is due to the errors but it is computed by the use of a far-less than ideal statistical method. When we shift to a method that is more data-driven and give far fewer degrees of freedom to researchers, we see that the level of inequality is further overestimated by a bit less than one twenty-fifth of the level. Moreover, the errors induced by Piketty and Saez’s choice of method are mostly concentrated in the 1940s in ways that artificially enhance their story. With the superior data method, the majority of the decline occurred during the Depression as a result of collapsing incomes (and notably capital gains income, which is to say the income of the rich).
The overall level and movements of inequality are so massively changed—something which is also confirmed in multiple other pieces of research showing the poor understanding and shoddy treatment of the data by Piketty and his acolytes—that it leads one to accept to a more familiar claim that the only forces that can massively reduce inequality in a short period of time are wars and other catastrophes (e.g., the Great Depression). The tax policies and welfare state praised by Mr. Piketty played a minor support role.
Things only get worse from there since the argument is that the reversal of the golden age of egalitarianism from 1914 to 1980 is due to a reversal of social-democratic policies (and a turn to far more ‘liberal’ policies). In recent years, a great deal of attention has been dedicated to the estimates of inequality after the 1960s. They all show the same thing. For example, Gerald Auten and David Splinter show that the ‘golden age’ of equality was overstated. Once correcting for tax policies that altered how income was reported, they find inequality rose far more modestly. Whereas Piketty estimates the top 1% share of income rising from between 12% and 14% in the 1960 to 1980 period to 20% today, Auten and Splinter place it at between 8% and 10% in the 1960 to 1980 period with a rise to 14% today. Those results are confirmed in separate works using different methods.
Auten and Splinter also reveal that after taxes and redistribution, inequality has not risen since 1960—despite smaller government and lower tax rates—undercutting Piketty’s case for high taxation and expansive welfare states. That finding is echoed in the work of Sylvain Catherine, Max Miller and Natasha Sarin, who showed that once the valuation of social security (National Insurance in Britain) is accounted for, there are no wealth inequality changes between 1960 and today. The welfare state, despite claims to it being slashed, did what it aimed to do—redistribute and moderate inequality. Given that social security is only a part of the welfare state, this also indicts the broader claims that massive expansions of the welfare state generated the golden age.
Other parts of the book are even more problematic than this. Chapter 8 is one of the lesser offenders in that matter. There, Piketty speaks of educational equality. This is in line with a standard view in economics that human capital is important to growth and that inequality affects the capacity to make human capital investments for poor people. Nothing controversial there even if there are quibbles on details. In any case, the importance of human capital to growth and development (especially of the poor) is empirically well documented. When discussing the leveling of 1914 to 1980 and then when discussing what would be needed to generate further leveling in the future, the answer is ‘more education’ and ‘more educational access’. The problem is that there is an implicit assumption that all of the gains in human capital can be attributed to the state’s efforts to provide schooling. Ergo, since schooling reduced inequality and schooling is state-provided, more state-provided schooling is needed. There is a vast literature showing that state provision of education is often of low-quality in developing countries and that a sizable chunk of improvements in human capital (which then contributed to reductions in global economic inequality) actually comes from the market–based provision of schooling. Moreover, empirical studies of ‘educational mobility’—which compare the educational attainment of parents with that of their children—as well as studies of educational achievements over time (without comparing children and parents) consistently indicate that regions characterized by lower tax burdens and greater economic freedom exhibit higher levels of upward mobility in education and higher levels of educational achievements.
In other words, the very institutional arrangements and policy frameworks that Piketty criticizes as obstacles to equality appear, in practice, to foster intergenerational progress in educational achievement. Far from hindering mobility, economic freedom and moderate taxation seem to create an environment in which children are more likely to surpass the educational outcomes of their parents. What this chapter amounts to is a complaint about ‘not enough’ (an arguably fair complaint) and then a series of rehashed clichés about solutions for which there are good reasons (not discussed and ignored) to believe would make things worse.
The most important criticism, however, concerns something barely mentioned in the book—social mobility. The word mobility itself appears only once (page 121). There is a well-documented link between inequality and social mobility, with the logical connection being that inequality limits the ability of the poor, all else equal, to seize opportunities for upward advancement relative to the rich. This is why some speak of the ‘social reproduction of inequality,’ often with tedious distinctions that are without real differences. Yet, that argument has merit. Yet another, equally (and maybe even superior) meritorious argument exists: market–based economies systematically display higher intergenerational and intra-generational income and social mobility.
Using economic freedom indices (notably the Fraser Institute’s Economic Freedom of the World), one can assume that higher scores correspond to more capitalist economies with more liberal policies—precisely less of what Piketty prescribes. Evidence shows that ‘big liberalizations’ not only raise average incomes but also lift those in the bottom deciles along with the top, leaving inequality relatively unchanged. Conceptually similar results apply to economically disadvantaged groups such as women who gain noticeably from liberalizations (there is evidence that this applies to minority groups as well). Crucially, such liberalizations also generate large increases in income mobility. These causal results align with a growing body of associational studies linking economic freedom to greater upward mobility—relationships consistently stronger than those between inequality and mobility.
The reason for this connection is that the welfare state advocated by Piketty does have some potential for uplifting. However, through taxation, it can also discourage effort and innovation, thereby pushing people down. A modest welfare state—designed to target help while minimizing these downsides—is possible. Such a welfare state can be found in the visions of Milton Friedman and Charles Murray (libertarians), Marcel Boyer and Peter Lindert (social democrats), and Arthur Brooks (a conservative). Yet the key ingredient accompanying it must be open markets, minimal regulation, a limited state, and secure property rights (another term that appears only rarely in the book, and when it does, it carries a soupçon of disdain). Ignoring this point—as I was compelled to emphasize earlier in a symposium in Analysis & Kritik (in which Piketty participated, alongside my coauthor Nick Cowen of the University of Lincoln, to discuss another book which is a longer pre-iteration of this book)—is essential for Piketty. After all, the book is a political manifesto. It is not meant to engage with academic or scholarly arguments.
Indeed, to paraphrase Percy Shelley’s Ozymandias, little beside remains of A Brief History of Equality. Round the decay of its pretensions to scholarly output, the only monument left standing is a political manifesto. If the mighty seek to run for office, they may find some use in these pages; so too might Piketty himself, should ambition turn him toward politics. But manifestos are poor substitutes for analysis. They bend to fashion and fleeting desires for fame and popularity, drift with the winds of ideology, and mistake slogans for substance. What endures is not truth, but rhetoric. And, as with so many manifestos before, the time will come when even this too will be forgotten—leaving nothing besides.
‘A Brief History of Equality’ by Thomas Piketty was published in 2022 by Harvard University Press (ISBN: 978-0-674-27355-9. 288pp.
Vincent Geloso is assistant professor of economics at George Mason University and fellow at the Centre interuniversitaire de recherche en analyse des organisations (CIRANO). He has published multiple articles on estimating historical income inequality in multiple journals such Economic Journal, Economic Inquiry, Cliometrica and Southern Economic Journal. He is also senior economist for the Institut économique de Montréal.
Magnuson, a professor of corporate law, has compiled a detailed and entertaining narrative of the key episodes in corporate history that documents how the corporation has been deployed by society’s problem-solvers. The corporation is a distinct form of human organisation that pre-dates many of those we take most for granted, such as the democratic nation state and even the Church. In Magnuson’s prosaic account, rich in surprising details, corporations are not seen as individual agents that pursue goals we can easily evaluate as simply good or evil. Rather, they are an organisational tool that enable human beings to cooperate at scale to do things that human beings might want to do, for better or worse. In their success, they transform the world around them, and often create new problems to solve. They are always impressive, but never morally pure.
The legal privilege that constitutes the corporation is what makes them useful both to society in general and to particular people’s purposes. Corporations survive the death of their members, and therefore, so do their fiduciary obligations. When undertaking large-scale and long-term projects, it makes one more attractive to creditors if the project is known to continue even if its individual members might come and go, have a career change, go bankrupt, or even die. With the reach of human agency transcending the life time and changeable circumstances of any individual, corporations can achieve what would otherwise be impossible.
For most of recorded human history, the main source of organisational capacity in society has been the state. It is the state, therefore that originally created the corporation through granting, at its discretion, this peculiar form of legal privilege. From the first corporations of Rome to the early 19th century in England, those who wanted to avail themselves of incorporation would need to be granted such a privilege by the state. For the state to agree to creating this impersonal legal agent for your purposes, it generally needed to be shown that it was also in the state’s interests to do so, and not just the entrepreneur’s. At its very conception, then, there was the possibility of divergent or even conflicting interests between the agent who controls the corporation and the agent that grants it its status.
A fascinating aspect of this history of the corporation is that they are shown to be in one sense distinctively ‘private’ entities in that they are definitionally not states. But on the other hand, they are explicitly creatures of the state. In earlier epochs the way in which corporations served state interests was much clearer – they collected taxes, lent capital, subdued foreign lands to the glory of their sovereign, etc. A corporation could only be created if it did in fact serve the interests of its state (for better or for worse – the interests of the state have not very neatly converged with the interests of the general public for much of human history). Magnuson makes this tension vivid. However, it does leave us confused as to why he sometimes refers to the corporations of the ancient and pre-modern world as ‘capitalists.’
Over the course of the 18th to early 19th centuries (in Western Europe) incorporation went from being a discretionary legal privilege to being an impersonal, general right. One now has to fill out the forms and pay the taxes, but one does not need to persuade the sovereign of the virtues of one’s intentions. The discipline of the market is what now regulates which corporations get to exist or not, rather than the discretion of the sovereign. What this means, which is well shown in the second half of the book, is that profitability takes the place of perceived service to the realm. Magnuson impresses upon the reader that profitability is a good, but imperfect, measure of a corporations’ contribution to society. What he somewhat elides, however, is that its imperfections are so much less serious than those of premodern corporations. Serving Rome meant imposing arbitrary taxes that often left people literally starving; bringing glory to England often meant war and slaughter. Whilst the difference in the way corporations functioned before and after this revolution in corporate law took place is made vividly clear in the book, Magnuson does not explicitly mention the legal changes themselves. Analysis of this change would, I think, help him to ground the normative conclusions he lays out at the end.
The book is divided into seven periods of corporate history, told through the story of a particular corporation or industry that defined its era. In the beginning was the corpus economicus of the Roman Republic, first created to raise private funds for the overstretched military ambitions of Rome, and then to collect taxes on behalf of the later territorially stretched Republic. Such ‘tax-farming’ was the standard way states raised revenue. It was not until the dawn of early modernity that states had the bureaucratic capacity to do it themselves and thereby cut out the middle man. Such middle men were essentially local gangsters who extorted as much as they could from the population because a fixed sum was owed to Rome, and they got to keep any surplus they could squeeze out (hence the New Testament’s constant equation of tax-collectors and sinners). Rome could never have ascended to the power it did without them. But, inevitably, they became a source of political and economic interests unto themselves, separate from the Republic. Next comes the first bank, started by the Medicis, which made available huge amounts of wealth for European princes and merchants, as well as the Church, and were able to manipulate their debtors in the interests of their own long-term profits. Then we come to the joint-stock companies of England, created for seafaring trade to generate revenue for the Crown and bring glory to the realm. The most famous among them, the East India Company, would become so rich and powerful, with its own armies, currency, and slaves, that it was a de facto state in India. Eventually it became such a rival to England herself that the Crown would, bit-by-bit, take it over. Next, we turn to the American railroad companies that were granted monopolies for the purposes of connecting and thereby modernising a vast and internally conflicted country. The particular way in which they were granted privileges over land and the trade that would take place on their rails presented various opportunities for them to exploit, which would inform a whole era of American anti-trust legislation. The next episode occurs firmly within a legal and economic context in which corporations no longer had any special privileges but rather had to compete with one another on legal terms that tended to favour value-creation and efficiency over government favour. Henry Ford’s ambitious and successful plan to make a high-quality vehicle every working American family could afford required no special monopoly privileges but rather an innovative technology (the petrol-powered engine) and production method (the assembly line). Then the narrative moves onto multinational oil companies, which, on the one hand were able to coordinate oil supply far better than separate nations were, and on the other used their wealth and influence to suppress climate change science. The final two chapters are on private equity, and then Facebook as the archetypal tech start-up. In both cases, head-spinning profitability was reached at lightning speed. While there is no doubt they provide value to society, it is also clear they found ways to make profits without creating value, in the former case through arbitrage of the tax code, and in the latter case by purposefully drawing on compulsive human behaviour.
Magnuson says from time to time that profit-maximisation is what often leads to corporate abuse. However, by his own account Ford was driven by keeping his profits low so as to keep quality and volume as high as possible, and prices as low as possible so that all Americans could afford one of his cars. From time-to-time Magnuson invokes various cliches about corporations being short-termist. But this is in tension with the general idea that what corporations do is enable longer-term planning and risk-bearing investment than individuals are otherwise capable of. Nonetheless, the driving normative lesson from this fantastic account Magnuson has compiled is that corporations are a tool of human ingenuity, and human ingenuity is not always benign. He gives many examples of how well societies tend to respond to the new problems introduced by corporations – typically in the form of adaptive regulation – but this should in no way give corporations or the entrepreneurs that wield them moral permission to disregard their consciences, and tell themselves that whatever is good for them must be good for the public. This is a fascinating book and one of which there is very much more to speak about!
‘For Profit: A History of Corporations’ by William Magnuson was published in 2023 by Basic Books (ISBN: 978-1-541-60157-4). 368pp.
Billy Christmas is Associate Professor at West Virginia University, in the John Chambers College of Business and Economics, affiliated with the Kendrick Center for an Ethical Economy.
Prior to joining WVU he was Senior Lecturer in Political Philosophy at King’s College London, in the Department of Political Economy.
How We Found Our Callings
While all definitions of calling share in common the notion that work becomes meaningful within a person’s life, they differ on whether the source of the calling is internal, based on one’s own values, needs, and preferences, or external, based on either a calling from a higher power, a ‘transcendent summons,’ or a sense of fulfilling one’s destiny. Our own academic work together – which began with research on how the work of 9/11 victims was seen in the eyes of their close relations, and which has led to the publication of two books and several scholarly papers – feels secular in origin. We were both called to academia within a year of 9/11, when we were both living and working in New York City as management consultants, and although the call came from both a world in need of repair and from inside of us, it did not in our experience come from on high.
Religious and Secular Callings in the Financial Capital of the World
The first name on the New York City Medical Examiner’s list of casualties of the September 11, 2001 terrorist attacks is that of Father Mychal Judge. He died carrying out his calling amid danger, praying to God over victims when he was killed by falling debris. Many people who died that day in a variety of uniforms were characterized as having lived out their callings, according to research we conducted. Most obviously, included are first responders like Jonathan Ielpi, a firefighter who followed his father into a profession in which he was ‘more concerned about others than he was about himself,’ Whether or not those callings were equally heroic, their origins were not always overtly religious.
Some callings sounded decidedly secular in origin, such as those of trader Frank Garfi, who ‘found a job that suited him precisely…fast-paced, demanding and as power-filled as an extreme sport,’ and trader Atsushi Shiratori, who was ‘so obsessed with the stock market that he once spent a two-week vacation in a day-trading salon. Sheryl Rosenbaum, who had known since her childhood visits to her father’s accounting office that ‘this was what she wanted to do,’ continued while she raised two young children of her own.
The History of Religious Callings
The notion of work as a calling has religious origins. As fellow management scholars Stuart Bunderson and Jeff Thompson detail in one of the foundational academic studies of calling toward work, the Protestant Reformation – and specifically the writings of Martin Luther – witnessed the transition of ‘calling’ from a narrow association with clergy work to a broader association with potentially any type of work. The important part was performing one’s work diligently and faithfully, laying the foundation for Max Weber’s notion of the Protestant Work Ethic.
This historical period also marked the culmination of a gradual transition of perceptions of work ‘from curse to calling,’ in the words of philosopher Joanne Ciulla. In Ancient Greece, work – especially manual labor – was seen as drudgery, punishment, and a distraction from one’s main goal of living a good life which was fully experienced in the life of the mind and certain types of leisure pursuits. When work becomes a calling, it becomes not a means to an end, but a meaningful end unto itself, a way to make a unique contribution to the world. The religious view of calling still has purchase in today’s conversations, in both scholarly writings and in the popular press. However, a different view has also emerged more recently that takes this same spirit into an explicitly non-religious context.
The Rise of Calling as a Secular (and Managerial) Concept
In another study, Thompson and Bunderson suggest that religious callings are typically ‘outside-in,’ emphasizing ‘destiny and duty’ and anchored in ‘societal obligations or an external summons.’ They contrast them with secular conceptualizations of calling that are typically ‘inside-out,’ emphasizing ‘passion and self-fulfillment’ and anchored in ‘internal preferences.’ Proponents of the former may express skepticism about whether the latter constitute ‘true’ callings. Proponents of the latter may doubt whether duty absent the passion to carry it out is sufficient to constitute a calling. Proponents of both tend to recognize that the best callings are those in which one feels to called in one’s heart to do what one is called by the world to do – or, in the words of theologian Frederick Buechner, ‘where your deep hunger and the world’s deep gladness meet.’
By the mid-1970s, when the field of management and organizational behavior was gaining traction as an academic discipline, scholars and other writers were increasingly considering work as a calling in a non-religious sense. For example, Studs Terkel’s famous compendium of interviews, Working, had a section titled, ‘In Search of a Calling’ that featured an editor, an industrial designer, and a nun-turned-massage therapist.
Jobs, Careers, and Callings
The presence of calling in management research – where we first encountered it – originated with a book by Robert Bellah and colleagues, Habits of the Heart. This book was not about callings or even work – the section on work was just over five pages long, the same length as a section on ‘leaving church’ – but rather about understanding how Americans’ private lives contributed to or detracted from their civic engagement. Yet, the writings about work proved to have a profound and outsized impact in codifying how ordinary people relate to their work. Based on interviews, the authors distinguished between work as a job or a means to make money, a career or a means to climb a career ladder, or a calling where work is a meaningful end in itself and ‘morally inseparable from [a person’s] life.’
These categories were further popularized and disseminated when they became the subject of study within organizational psychology by Amy Wrzesniewski and colleagues as one of three work orientations. In a pioneering study, Wrzesniewski found that, compared to a job or career orientation, employees who viewed their work as a calling reported greater satisfaction with work and with life and missed fewer days of work. As in Martin Luther’s view, any work could be viewed as a calling by the person holding it – even seemingly low-paid, low-status, and/or ‘dirty work,’ from hospital cleaners to zookeepers to administrative assistants. As a psychological construct, work orientation held that two people with the same position in an organization could come to view their jobs in wildly different ways: one a job, the other a calling.
What Do We Know Today?
Callings Can Be Sacred And/Or Secular
Academic research on work as a calling has exploded in the past two decades, which almost exactly mirrors a focus in the popular press on finding one’s calling through work. Reviews of calling research are quick to note the dual (if not dueling) perspectives on whether callings are sacred or secular. The neoclassical view of calling preferred by Bunderson and Thompson aims to build directly on the classical, religious view put forth by Luther and later Weber, defining calling as ‘that place in the occupational division of labor in society that one feels destined to fill by virtue of particular gifts, talents, and/or idiosyncratic life opportunities.’ The modern view, articulated by Dobrow and Tosti-Kharas, defines calling as ‘a consuming, meaningful passion people experience toward a domain, such as work.’
Both Kinds of Calling are Paths to a ‘Good Life’
A recent meta-analysis, of which Jen was a coauthor, examined more than 200 empirical studies of calling over the past 20 years, finding that experiencing a strong calling toward one’s work was related to a sense that one’s life was good. Whether a function of our work-centered modern culture, or of some jobs becoming objectively ‘better’ in post-industrial society, work is no longer necessarily a curse. The meta-analysis authors then looked at whether the type of calling, internal/modern or external/neoclassical, related to different types of well-being, hedonic (happiness or pleasure) or eudaimonic (meaningfulness, purpose, and self-realization). Both internal and external callings related to both types of well-being; however, internal callings were more strongly related to hedonic well-being, while external callings were more related to eudaimonic well-being.
What Does This Mean for Workers?
Callings Have Great Benefits…
In any case, possibly because we spend so much of our waking time at work, feeling that work has positive meaning has the potential to enhance our own and others’ flourishing. This is especially so with eudaimonic well-being, which can be supported by callings whether they are religious or secular in origin.
…And Can Come at Great Costs
Yet, the picture of how callings contribute to our lives is complicated, because they often demand sacrifices that can have deleterious effects on our well-being. The zookeeper study, which employed a neoclassical lens, portrayed calling as ‘a painfully double-edged sword.’ On one hand, a sense of calling elevated the importance and meaningfulness of work in subjects’ lives; on the other hand, it required sacrifices in the form of pay, long hours, and even social esteem. Further research supports that, regardless of whether callings are seen as secular or religious, they are intensely-felt and may involve a host of irrational behavior, from over-estimating one’s ability at work to ignoring the advice of trusted mentors to sacrificing money. A study of church ministers found that those with strongest callings had the hardest time disengaging from work at the end of the day, which in turn negatively affected their sleep quality and their vigor the next morning.
Callings are Worth Pursuing…
All of this is to say that, if we are fortunate enough to have a choice in the matter, we should choose wisely about whether to pursue work as a calling and which callings are worth pursuing. We should be realistic about what to expect of a calling, because even people who love their work may not be happy about the sacrifices and demands it requires every day. The cliché that if you ‘do what you love and you’ll never work a day in your life’ is often false, as anyone who has so much passion for their work can attest when the lines between their personal and professional lives blur to the point that they cannot escape work. We should also be mindful about whether some callings are ‘better’ than others. In our 9/11 research, which was based on close relations’ idealized reflections of how they wished their loved ones’ lives to have been, we found not only that a disproportionate share of victims were depicted as having worked at a calling but also that those callings which emphasized helping others and cultivating relationships with them were particularly admired. In those portraits of victims’ lives, their close relations found reasons for why even the most mundane or low status work – including that of receptionists and security guards and window washers – might have been worth loving.
…But Are Not a Panacea
As university professors, we counsel students not to feel undue pressure to ‘find their callings,’ especially as a surefire path to a perfect life. We teach them that some people are born knowing exactly what they were called to do and others search their entire lives in vain for a calling. They can’t control which one they might be, but it is within their control to carefully consider what pursuits are worth undertaking in a life worth living.
Jennifer Tosti-Kharas is the Camilla Latino Spinelli Endowed Term Chair and Professor of Management at Babson College.
Christopher Wong Michaelson is the Barbara and David A. Koch Endowed Chair in Business Ethics and Academic Director of the Melrose and The Toro Company Center for Principled Leadership at the University of St. Thomas and on the Business and Society faculty at NYU’s Stern School of Business.
Jen and Christopher are the authors of Is Your Work Worth It? How to Think About Meaningful Work (New York: Public Affairs, 2024) and The Meaning and Purpose of Work: An Interdisciplinary Framework for Considering What Work is For (London: Routledge, 2025).
It has long been a fundamental maxim in business that trust and integrity are integral to the extension of credit between businesses, partners, and clients. It is a central theme of Josh Lauer’s book that, despite the revolutionary effects of technological capability, the central elements of trust and integrity remain in place. Lauer contrasts this continuity of principles with transformative changes in the fin-tech sectors, resulting in financialization of the modern American economy, the construction of individual financial identity, and customized financial products.
Lauer’s book, part of the ‘Columbia Studies in the History of U.S. Capitalism’ series, consists of nine chapters, recounting the historical evolution of systematic credit surveillance amid cumulative changes in the credit sub-sector of financial services. It is highly informative, immaculately researched, and written in crisp, precise prose. The earlier chapters are particularly insightful in explaining the transition from localized face-to-face economies to more impersonal modern financial institutions. The broader historical perspective on surveillance is identified and conceptualized, with historical parallels drawn from factory and prison surveillance, noted by Marx, Taylor, and Foucault (pages 10-11).
In earlier centuries, creditworthiness was assessed locally but as the American economy expanded, surveillance emerged as a surrogacy for personal knowledge and observation. Mercantile agencies, forerunners of credit bureaus, used advanced methodologies of reporting, surveillance, and intelligence-gathering. Creditworthiness was not primarily about wealth per se but honesty and integrity, that is, not whether you could pay but whether you would pay (pages 19-20). Evaluating and quantifying risk was always somewhat subjective, when assessing the alliterative core signifiers, or the ‘three Cs’, of character, capital, and capacity’ (page 20). Technology played a role in offsetting subjectivity, through quantitative data of balance sheets, statements, and alphanumerical coding, signifying recorded financial experience and activity (page 69).
Credit reports increased exponentially in the second half of the nineteenth century, and significantly, at the fin de siècle, two of the three leading contemporary credit bureaus were founded. ‘Credit Men’ within companies, acting as professional custodians and interpreters of creditworthiness, were organized into the National Association of Credit Men (NACM) in 1896 (page 83). While indicative of the (gendered) professionalization of credit management, after 1914, more women entered the sector and the nomenclature of the professional association was revised accordingly.
The post-1945 democratization of credit, underpinned by Mass Production, increasing availability of household goods, and installment deals, expanded the consumer base. It was accompanied by a relentless drive to educate consumers and to induce ‘Credit Consciousness’ (pages 135-136). Credit reporting networks extended across the national business landscape, strategically positioned to serve multiple sectors (page 84). Equally, a national credit infrastructure was closely aligned with the rise of department stores, with credit checks often made at point of purchase (page 87). Codes signified credit status, and authorization or refusal was conveyed within stores by pneumatic tubes. Technology again, in the form of the Dewey card-file system, vertical filing, and telephone usage, allowed for greater functionality and efficiency, not least through facilitating tighter control on credit limits.
Database marketing in the 1970s and 1980s made consumer segmentation possible, especially important given social fragmentation and rapid demographic change. Moreover, the sales potential of credit rating data had been quickly recognized, with customized information in promotional literature and correspondence. Identifying and locating income brackets and market segments became a powerful marketing tool, understood statistically through the Pareto Principle of the ‘vital few and trivial many’ (page 153). Typically, with 20% of customers providing 80% of sales, clearer financial visibility and micro-targeting of high-value and high-volume customers was possible (pages 153-154).
Computerization was transformative, not least by hastening standardization. It was a great leap forward in terms of efficiency, and decision-making was far more rapid than could be achieved by personal interviews and pneumatic tubes. Statistical scoring and ranking did have their limits, and even well into the 1960s, traditional methodologies were not fully obsolete. How character could be quantified and scored was resolved by a multi-variable approach, whereby possession of assets and commodities, such as a mortgage, a home phone, and a savings or checking account, provided a profile of creditworthiness based on personal stability and institutional validation (page 206). Affirmative and negative reporting of lifestyle, employment, income, and health, were bell-weathers of creditworthiness. Adjustable and variable interest rates followed the risk-based pricing model of the insurance sector but as the sub-prime crisis in the Federal home-loan markets of Fannie Mae and Freddie Mac indicated, the temptation for lenders was to relax credit limits. (page 209-210).
Throughout the 1990s and 2000s, credit data played a vital role in the interstices of the State apparatus and criminal justice system. Yet, issues surrounding data-sharing and confidentiality became more contentious, and fittingly, privacy, data collection, and regulation dominate the second half of the book. Historically, the credit sector developed without close legislative scrutiny, but self-regulation was increasingly untenable. A raft of legislation, such as the Fair Credit Reporting Act (FCRA) of 1970, following the 1968 Consumer Credit Protection Act, including Truth in Lending clauses, provided powers of oversight, transparency, and accountability (page 226). There were societal welfare gains from a more efficient credit system but the trade-off was greater surveillance and data mining to inform credit decisions and to act as a marketing tool (page 234).
While credit bureaus sought to act as neutral information-gatherers, credit availability could not escape the broader socio-economic framework of modern America, with race, gender, class, occupational status, and residence all profiling factors (page 143). There were winners and losers. Single women and minorities were often excluded from mainstream credit and exposed to predatory lending. This ‘credit discrimination’ was tackled by Equal Credit Opportunity Acts (ECOA) in the 1970s, prohibiting credit refusal on the basis of gender or race, and promoting ‘blind’ scoring to eliminate discrimination (pages 235-236). Yet, financial identity based on economic stability and institutional status often still reflected entrenched racial and gender disadvantages. Statistical credit scoring can’t eliminate proxy discrimination since it deals with the effects rather than causes of disadvantage and discrimination (pages 237-238).
More positively, greater efficiency was driven by risk modelling and database marketing, with powerful information systems generating predictive data for different types of lenders (page 249). Crucially, electronic data is not containable in the same way as paper, thus privacy concerns are again viably raised. The practice of financial institutions, outside the purview of the FCRA, continuing to share financial information with affiliates and third parties in joint marketing activities, is a particularly egregious example (pages 263-264). The oligopolistic triumvirate of Equifax, TRW, and TransUnion may be able to use their market power to regulate the spread of information, but the credit landscape will not regress to an earlier iteration. From a process of localized character assessment to national FICO scores, creditworthiness remains central to an economy largely built on corporate, household, and individual debt. Identifying potential defaulters and extracting more profitability from ‘good’ borrowers remains central to creditors.
Indeed, that dichotomy portrayed by Lauer between the efficiency and functionality of the credit sector, and an increasingly intrusive surveillance apparatus, is convincingly validated by an impressive body of research. In many ways, the book is another thoughtful testimony to the disruptive effects of modern technology, and how there are positive and negative effects of innovation and expansion. Credit bureau databases were predictably an early target for hackers, but ironically a large volume of data is now provided by consumers themselves on social media, through declared data. Surprisingly, until fairly recently, there appeared to be little opposition to credit surveillance, but now, the mantra ‘All data is credit data’ resonates widely (page 267).
It may have been useful to have drawn an international comparison to test American exceptionalism, by assessing the creation of national markets through mass production, product uniformity, and standardization in less commercial societies. As Adam Smith famously wrote: ‘The division of labour is limited by the extent of the market’. Certainly, the expansion of the credit sector is part of that larger narrative of national markets and institutions eclipsing local economies, institutions, and relationships. In that sense, the development of the sector is indicative of a thriving capitalist economy.
Lauer arrives at a somewhat ominous conclusion as to technology, in stating: ‘No digital presence goes untracked; no digital profile goes unmined. This is by design’ (page 274). While algorithms facilitate high-level micro-targeting, and thus further erode human interaction, AI threatens to go further, most notably through automated screening in multiple contexts. The positive features of financialization and financial identity have clearly come at a cost to individual privacy. Avoiding further quasi-Orwellian intrusion may now depend, somewhat ironically, on robust government regulation and oversight.
‘Creditworthy: A History of Consumer Surveillance and Financial Identity in America’ by Josh Lauer was published in 2024 by Columbia University Press (ISBN: 978-0-23-121663-0). 352pp.)
Gordon Bannerman is a professor teaching Business History at Wilfrid Laurier University and the University of Guelph-Humber, Ontario. His primary research interests focus on modern British political and economic history.
It takes a brave person to challenge one of the consensus beliefs of a society, but that is precisely what Erik Baker does in, Make Your Own Job: How the Entrepreneurial Work Ethic Exhausted America. His book puts firmly in its sights ‘the idea that everyone should strive to be entrepreneurial’ which he promotes to the status of a ‘work ethic’ that ‘promises material rewards and intangible benefits’ but drives a ‘spike in burnout and despair’ and an ‘epidemic of exhaustion’ (page 3). The book gives a grand historic sweep of corporate America from Henry Ford’s adoption of the ‘New Thought’ Movement in the 1920s to the ‘Great Resignation’ of the 2020s.
At each stage on this industrial timeline the thought-provoking question is how entrepreneurial strategies and activities bred an entrepreneurial work ethic which became so embedded that it was adopted as assumed wisdom for all, rather than the choice of a few. His issue isn’t with entrepreneurs but with ‘our collective commitment to entrepreneurialism’ which he suggests isn’t helping because ‘it enjoins us to work more intensely than we need to and leaves us feeling devoid of purpose when we don’t have work, or the right kind of work, to do’ (page 3). But I couldn’t help replying, ‘Really?’ Is the core proposition proven that entrepreneurial work and making your own job leads to an innate drivenness and risks profound emptiness not experienced by those who work in corporate structures? This doesn’t take away from the fascinating content but does add a warning label that the historical overview needs processing and applying.
One strength in the book is the rich historical detail that deconstructs the beliefs of industrialists, politicians and thought leaders and shows how strong an influence they have had on our attitude to doing work we love – a phrase that is common on co-working walls but is attributed to Elizabeth Jones Towne in the 1900s with phrases such as ‘A man’s success is measured…by the amount of LOVE he feeds his work with’ (page 33). What the book left me wondering however was what other work ethics were at play and how they also impacted our view of entrepreneurial endeavour. Puritan New England is mentioned as an ethic that denied ‘desire and selfhood’ (page 33) but is quickly dismissed as a ‘baleful, anachronistic influence’ in contrast to the success-orientated New Thought luminaries, such as Towne (page 33). If religion is referenced at all it is in a thread throughout the book which separates the new mechanical ideas of business efficiency from the ‘extra endowment’ of ‘foresight – the philosophic power of understanding the complex flux of the varieties of human societies’ (page 56). The idea of a ‘divine energy’ which ‘releases in man a power and a force beyond human capacity to generate’ (page 87) was made popular by Norman Vincent Peale, author of The Power of Positive Thinking in 1952. The glaring gap is the teaching from religion about the purpose of work as a gift from God and part of his eternal purposes. If work is about channelling our own energies, then it is not surprising that we will get exhausted. But when we work with all God’s energy working powerfully in and through us (Philippians 2:13), then we will be restored and enjoy meaningful work and Sabbath rest!
The book is a detailed survey from an almost exclusively USA perspective. This shouldn’t be surprising as the title gives due warning of which side of the pond it’s placed, but it did mean that some transatlantic translation is necessary. The experience of the Blitz and ‘labour’s not working’ election posters are just two amongst many British cultural moments that shape our attitude to work and entrepreneurship. The description of Sun Belt entrepreneurs as a ‘Promethean master race’ full of ‘good-looking, healthy, superior Americans’ (page 114) is slightly at odds with the picture of people in 1960s Britain – the creative energy was there but it looked very different and shaped an entrepreneurial work ethic very differently. By its nature, the book focuses on some aspects of corporate America which help tell the story of an entrepreneurial work ethic, but I’m sure many other threads to that story could be added. One striking insight is how much influence Harvard Business School had in shaping the corporate mindset and several professors are frequently quoted. Since the author is a lecturer at Harvard it is less unexpected but still noteworthy, especially as the influence from and on academic institutions is in a liminal phase right now.
The later chapters describe the entrepreneurial philosophy of Steve Jobs and the rise of ‘philosopher-kings’ (page 163) who thought very differently from the academics in the elite east coast business schools. In contrast to the accepted wisdom, Steve Jobs focused on the intersection of the arts and the sciences, and the conservative executives of middle America emphasised ‘the analogy between the entrepreneurial firm and the patriarchal family; the entrepreneurial leader as a paternal authority; the entrepreneurial work ethic as an expression of faith in God and country’ (page 164). The contrast in the ways the power of entrepreneurialism is applied in the lecture halls of Harvard, the Silicon Valley offices of Apple and the training institutions set up by business leaders in St Louis, is a helpful reminder of how people shape very similar ideas with very different worldviews.
As our narrative timeline propels towards the present there is a fascinating focus on social entrepreneurship – a current phenomenon well worth studying in its historical context. If the outworking of the entrepreneurial spirit’s drive is exhaustion and the enforcing of ‘unforced enthusiasm’ amongst those who ‘survived the cut’, are in ‘the winners circle’ and working ‘extreme jobs’ (page 189), there is a useful exploration of how gain of other types of value legitimises entrepreneurial purpose. One conclusion, which I’m a big proponent of and is the focus of my research, is to reevaluate what we mean by value and what we are therefore applying our entrepreneurial energies to generating. But the conclusion that seems more favoured here is that it is inevitable to create ‘duds of the new economy’ as ‘a significant fraction of the population was condemned to be economically valueless’ (page 231) while the elite are just plain exhausted.
The ongoing tension is in the starting hypothesis. If the entrepreneurial work ethic is causing exhaustion because it ‘leaves us feeling devoid of purpose when we don’t have work, or the right kind of work, to do’ (page 3) what alternative would give meaning and renewing energy? The answer, which many theologians not mentioned in this book have suggested over the centuries, is to find purpose in serving an entrepreneurial God who is creative, redemptive and holistically entrepreneurial.
Would I recommend this book? Yes, to a specific audience who have interest in the story of entrepreneurship or to an engaged audience who are willing to apply the history from a land far away, and in some parts a time long ago, to the present challenges of work. Don’t expect ready answers to exhaustion, but do explore the many reasons in the history of corporate America why doing what we love has become the new religion at work.
‘Make Your Own Job: How the Entrepreneurial Work Ethic Exhausted America’ by Erik Baker was published in 2025 by Harvard University Press (ISBN: 978-0-67-429360-1). 337pp.
Andrew Baughen is a management consultant specialising in mapping the whole value of organisations. He researches business worldviews and teaches ethics at Bayes Business School and is also an associate minister at St Margaret’s Lothbury.
It has been reported that Ribbon AI, a Canadian company, is offering employers a new form of screening interview conducted by artificial intelligence. With a view to helping organisations hire staff more quickly and job-seekers find work sooner by cutting out ‘dead time’ in the recruitment process, early stage job interviews are conducted in a fashion similar to a remote interview, with applicants responding to questions and prompts from a natural sounding voice, generated by AI.
The idea is that the AI interview saves time for job-seekers, who get to interview almost immediately rather than waiting for two or three weeks until a member of the HR department can see them. Ribbon does not make decisions about candidates; rather, it provides companies with applicants’ responses to questions, offering transcripts, summaries, analyses and scoring of candidates’ responses, which the company can then use to inform its decisions according to internal criteria and requirements. As such, it is intended that companies should gather information about candidates and assess their suitability for roles more efficiently than by way of an early-stage screening interview.
It is worth pausing to ask what candidates are being expected to do here.
It is not uncommon for companies to ask applicants to complete psychometric tests prior to offering an interview and with increasing frequency, candidates will also be provided with set questions and instructed to submit answers recorded using a web-cam. Anyone Who has been through such a process might have experienced certain misgivings. The rationale behind including tests is intelligible (though it is not always clear whether they really determine which candidates possess the skills requisite for the role on offer) but recording answers can feel artificial. We might wonder what is to be gained by this approach, and why the hiring company is unwilling to talk to candidates in person at this stage, particularly if it is serious about ultimately hiring and investing in a member of staff. In any event, if the recorded answers are assessed by a member of HR staff or a hiring manager, it is not clear how far such an approach is any more efficient than a short, standard-format interview. Perhaps the most sympathetic view is to see such an approach as being akin to recording a spoken assessment as part of a remote learning course, perhaps in modern languages. Strange as it feels to be speaking (in)to a machine, candidates assume that the recording will at least be properly assessed by a human being at some stage.
In this instance, however, it seems that candidates are being expected to speak to and interact with a machine as though that machine were the human interviewer. An applicant is in effect asked to hold a conversation with an interlocutor that has no consciousness, is unaware of the interviewee’s existence and understands neither the candidate’s answers nor even its own questions. In such a situation, there can be said to be no conversation at all and therefore, arguably no interview. This is a peculiar arrangement, whereby an applicant is expected to behave as though a non-conscious object is interviewing her.
Moreover, her responses are not necessarily going to be sent to a human assessor for consideration at all. Rather, a decision might very well be made based on an analysis and data produced by the AI based on her responses. These analyses may be less biased and more uniform than would be possible for human interviewers, but the applicant has been ‘interviewed’ and ‘assessed’ by a machine. She might be rejected without any human consideration of the actual performance itself at all. Instead, the candidacy depends on a view taken of a computer generated assessment of that performance.
What does such an approach suggest about a company’s attitude to applicants, when it chooses to have them prove themselves before a machine before granting any meaningful human interaction?
Andrei Rogobete has written about the need for a human-centric AI, stating that AI ‘ought to be embraced in a prudent manner that directs its contributions towards human thriving’. In arguing for a use of AI that benefits humanity first and foremost and does not deify machines, he quotes Pope John-Paul II’s call for humanity to ‘use science and technology in a full and constructive way, while recognizing that the findings of science always have to be evaluated in the light of the centrality of the human person (and) of the common good’.
If we are to make responsible use of artificial intelligence for the good of humanity, the technology ought to be restricted to those tasks which any given form of AI performs well, so that it brings clear, tangible benefits to all relevant parties. Crucially, the dignity of the human beings that this form of technology is to serve should always be our foremost consideration. It is pertinent to ask, therefore, whether reducing interviews – for which candidates will often prepare carefully and about which they are ordinarily nervous – to a confected and solipsistic ‘conversation’ with a non-conscious AI model rather than meaningful engagement with other human beings is indicative of such an approach. Is it consistent with human dignity to base decisions about an individual’s potential livelihood not on a meaningful conversation with that person – and perhaps not even directly on her responses themselves – but on the reduction of her performance to a collection of data and analytics produced by artificial intelligence – artificial intelligence which has not seen or heard, let alone engaged with or understood the person in question?
The Centre for Enterprise, Markets and Ethics (CEME) was pleased to host a roundtable event on the topic of non-executive directors.
The full report is available to download here.
The role of the non-executive director is essential to the proper functioning of corporate governance. The expectations on directors have been tested by corporate scandal. What are the reasonable expectations that society places on those that undertake this task and what are the appropriate legal responsibilities?
The event was chaired by Richard Turnbull and our main speaker was John Wood, Lecturer in Company and Insolvency Law at Lancaster University’s School of Law. He has a particular interest in the law around the duties of directors and has published numerous articles and several books.
This event took place on Thursday, 12th December in the Council Room at One Great George Street, London SW1P 3AA.
Lenore Palladino is Associate Professor of Economics and Public Policy at the University of Massachusetts Amherst. She suggests that a good company is one that is ‘innovative and responsible’ (page i). She believes that large corporations focus ‘too little on creation and too much on distribution’ (page 2) and she places the blame squarely on the shoulders of the doctrine of ‘shareholder primacy’. In Good Company she, therefore, sets out ‘to provide a sketch of how ending shareholder primacy and reorienting corporate decision making towards productivity would work in practice’ (page 1) and to propose policies to ‘reorient corporations away from shareholder primacy and toward innovation’ (page 9).
Extraordinarily, however, the book provides little evidence in support of either the link between shareholder primacy and a lack of innovation or the efficacy of her proposed policies in promoting innovation. Instead, there are many indications of other policy objectives, leaving a strong impression that Palladino’s objective is not really innovation but the implementation of a left-wing socio-economic agenda.
The book contains many left of centre linguistic markers such as references to ‘elites’, ‘progressive legal scholars’ and ‘industrial democracy’. It is also littered with gratuitous references to matters that are, at best, peripheral to the subject matter. The number of such references to race verges on the obsessive (there being five before the end of chapter 1!) and these are joined by various references to climate change and a throwaway claim that ‘hospitals and schools should be fully public’ (page 9). Furthermore, Palladino seems to regard many of her propositions as already proven since she often simply asserts them or quotes other like-minded authors as if stating their opinion is sufficient to establish her point. The more striking unproven assertions include the claim that ‘Shareholder primacy has led to extreme wealth inequality in the United States’ (page 50) and the ex-cathedra statement that ‘companies with the most market power are not paying nearly enough in taxes’ (page 77). Like her basic contentions regarding innovation, neither of these propositions is self-evident.
Leaving aside issues in relation to her specific proposals, Palladino’s overall thesis is built on sand. She attacks a version of the doctrine of ‘shareholder primacy’ that considers the only duty of directors to be the advancing of the financial interest of shareholders regardless of all other considerations. Of course, this version has been advocated but there are other versions that incorporate nuance that, at least, mitigates some of the issues that Palladino perceives, including the concept of ‘enlightened shareholder value’ that is enshrined in Section 172 of the UK Companies Act 2006. In its more extreme forms, ‘shareholder primacy’ is flawed but this should not cause us to dismiss the concept that the shareholders of a company are its owners and that the directors have a duty to promote the success of the company for the benefit of its shareholders within the context of other legal and, equally importantly, ethical duties.
Palladino admits that her book is US focused but this does not excuse her failure adequately to engage with non-US experience. In some cases, she appears to have misunderstood foreign laws and practices. For example, she asserts that in Germany workers represent one-third to one-half ‘of the directors’ of companies falling within the ambit of the co-determination laws (page 85) but in fact worker representation in Germany is at the level of a supervisory board that is not permitted to manage the company and that has carefully circumscribed powers. More seriously, Palladino fails to address the question why, if (as she suggests) some of the reforms that she advocates have been implemented in European countries, those countries appear to have a worse record in innovation than that of the United States, which is generally regarded as among the more innovative economies of the world.
Most seriously of all, Palladino addresses herself solely to publicly listed corporations. She recognises this and says that the next phase of her research will consider the growing importance of the private markets but she does not appear to recognise that the time has passed when one could credibly discuss issues to do with the businesses and governance of major corporations while considering only those that are publicly listed. Huge corporations are now owned by a variety of financial sponsors (ranging from sovereign wealth funds to venture capital houses and family offices) and one cannot analyse corporate failings and propose solutions to these failings without considering such corporations.
Palladino presents proposals relating, among other things, to: US federal incorporation and the licensing of major corporations; a ‘real seat’ doctrine of state incorporation (that is, a requirement that a corporation be incorporated in the US state with which it has the closest connection); stock buy-backs; the taxation of corporations (including a ‘wealth tax’ on market value); shareholder taxation (including a proposal that tax be paid on unrealised gains); employee-elected representatives on corporate boards; changes to the duties of board members; works councils; employee equity funds owning perhaps 20% of corporations; and proposals relating to asset managers, including the establishment of a public asset manager.
Many of her proposals deserve, and in other books have received, detailed consideration and have been the subject of extensive debate. A further contribution to the debate might have been helpful but, adequately to cover all of Palladino’s proposals, the book would have had to be several times longer than Good Company. As it is, Palladino has tried to cram her analysis and proposals into 135 pages and the result is a deluge of contentious assertions and proposals, few of which are adequately worked through. On occasions (for example, in relation to the composition of employee representation on corporate boards), she acknowledges the complexities and the need for further thought but all too often she does not acknowledge these things and, in any event, she fails to distinguish between issues that are mere points of detail and those that raise questions that pertain to the viability, effectiveness or potential adverse consequences of her proposals.
Her discussion of what she perceives to be the evils of share buy-backs in the USA illustrates many of the book’s frustrating weaknesses. She suggests that buy-backs ‘are used to prop up share prices while contributing nothing to corporate productivity’ (page 63) and some of her concerns have an element of truth. In particular, there are legitimate concerns about the opportunity provided for insider dealing and market manipulation. However, whilst there is evidence of wrongdoing, there is little that suggest that wrongdoing is endemic or that it necessitates anything more than consideration of the detail of the applicable regulations. In fact, it is strongly arguable that the real problem is the structuring of executive share option and other incentive packages rather than the buy-backs themselves.
Palladino argues that limiting buy-backs would leave more money in corporations and thus lead to greater innovation but it is by no means clear why this should be the case and she presents no supporting evidence. Money left in a corporation might be used on mergers and acquisitions, a reduction of capital or simply the payment of greater dividends, rather than for innovation.
Palladino also fails adequately to address possible unintended consequences of her proposals. Sometimes she briefly alludes to the possibility of such consequences (for example, she recognises that employee equity funds might result in increased agitation for larger dividends and thus a reduction in the amount of capital available for investment [page 111]). However, there are glaring omissions. In particular, her discussion of the ways in which employees and their representatives might have a say in relation to the running of corporations never addresses the evidence of employee conservatism and, perhaps more importantly, the conservatism of trade unions that historically, in many places, acted as an impediment to the very innovation that Palladino purports to be seeking.
Sadly, despite dealing with important issues, Good Company does not advance current debates regarding corporate purpose and corporate governance. It is likely only to convince those who are already signed up to its underlying philosophy. Those who want to understand the relevant issues and consider carefully the pros and cons of possible reforms need to look elsewhere.
‘Good Company: Economic Policy after Shareholder Primacy’ by Lenore Palladino was published in 2024 by The University of Chicago Press (978-0-226-83650-8). 135pp.
Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world.
Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.
As the authors of The Meaning and Purpose of Work point out, most of us will probably spend more of our lives working than doing anything else, such that work has the potential to be our most meaningful contribution to the world, but also that which causes us the greatest misery. The book is shaped around the idea that work occurs at three levels: individual, organisational and systemic, and throughout, the authors return to the trade-off between the personal rewards of work, whether extrinsic (such as remuneration) or intrinsic (such as a feeling of fulfilment), and its societal worth (as with work that serves others). All of these are significant determinants of meaning and as such, the main focus of the book – emphasised at the very end – is on why we work, this being the question that must inform other, more pragmatic questions about what to do, where or for what duration.
The introduction raises the question of meaning in work, particularly when tragedies or crises provoke periods of reflection. The first chapter then proceeds to explore ‘a multiplicity of ways in which work can give life meaning and purpose – and a multiplicity of ways in which it can take it away’ (page 7). Here, the authors outline concepts such as ‘market fit’ in relation to meaning, whereby ‘meaning and purpose can emerge from the abstract machinations of the marketplace … in the form of finding real alignment between what the market needs and wants and what we are uniquely fit to supply’ (page 8). They also discuss the importance of self-realisation (or personal fulfilment), service to others (including supporting one’s family), and community (or those with whom we work) if work is to have meaning.
Chapter 2 unpacks fundamental concepts such as work, meaningfulness and purpose and suggests that while our personal perspectives are important when it comes to judging work meaningful, tied as such judgements are to our systems of value, they are not simply statements of preference but are in fact prescriptive – which raises the possibility of our being wrong, for instance if our priorities are mistaken or we are confused about what matters to us. Much therefore depends on our theory of what constitutes meaning(fulness).
Chapters 3 and 4 examine factors that can influence the meaningfulness of work, focusing primarily on the importance of individual perspective and ‘work orientation’. With regard to the latter, whether one sees one’s work as a job, career or calling can have a fundamental impact on levels of satisfaction, fulfilment and identification with one’s work. While the authors recognise that ‘job-crafting’ and changing one’s orientation to work is not a means by which anyone can suddenly transform a tedious job into a rewarding career, their observations highlight the importance of ‘meaning-making’, whilst also acknowledging the fact that the perspectives of others (rather than simply that of the worker) matter, and that the nature of the work itself is often central: ‘Notwithstanding this implication that meaning and purpose are to be found in the worker … it is difficult to deny that there are some features in the world around work that make some work more conducive to cultivating meaning and purpose than others’ (page 60).
Chapter 5 looks at meaningful work in organisations, considering reasons for the shift towards stakeholder value perspectives and the proliferation of company statements of purpose. Comparing work in one of the Big Four accounting firms to that of a small, worker-owned company, the authors recognise that many people (themselves included, previously) do find meaning and value working for large firms, under pressure to produce results. They also acknowledge that large organisations can achieve purposes that matter to individuals who work for them and that what matters when it comes to any stated company purpose is sincerity: ‘ … the organizations in which we often work can fulfill those inspiring purposes, from serving society’s needs to making the world a better place. They can do so at a scale that we could not achieve as individuals, harnessing collective power that enables us to connect our personal meaning and talent to a larger purpose … economic sense and moral sentiments can align together to build organizations that are monetarily successful and provide work that is meaningful to their employees’ (page 81). While organisations can strip the meaning from work and leave employees feeling under-valued in repetitive, tedious work, they can also create communities and serve valuable purposes. As ever, much depends on the values of the individual, but in organisations, a good deal is down to the approach of the leaders.
Chapter 6 raises the question of how market and state value and put a price on work (and life) according to its ‘market fit’ or societal benefit. There is rather less in the way of conceptual discussion in this chapter and while the reader can extract from the detailed case studies the tension between personal and societal values that confer meaning on work, a closer, more guided discussion of the ways in which our socio-economic system can assign meaning (or otherwise) would have been welcome.
The final chapter considers the future of work and the issues that are likely to arise as work changes, recapitulates earlier material and reinforces the book’s organisation around the three levels of work, offering a series of terms that express functional and moral practices or motivations connected with work at each level.
While brief, The Meaning and Purpose of Work covers a good deal of ground and in returning to certain themes constantly, maintains coherence. Some readers might wonder why, in a book dealing with meaningful work, there is little discussion of the specific rewards and challenges of self-employment, and the acquisition of professional skills seems to receive no attention. However, it is likely that these subjects – and others – could be addressed by the conceptual resources provided, possibly in terms of personal fulfilment or self-realisation. Perhaps more of a challenge is the importance of human dignity as a feature of work. While the authors do hint at this in places with terms such as ‘noble’ and considerations of the importance of ‘feeling valued’, this fundamental value connected with work – one likely to shape many conceptions of its meaning – is not discussed directly at all. While the foundations for a discussion of dignity may well be present, if the concept cannot be reduced to some other notion delineated in the book, such as ‘self-realisation’ or ‘recognition’, many would consider the absence of any consideration of dignity to be a significant oversight.
Nevertheless, the book is certainly to be recommended. The Meaning and Purpose of Work is very accessible and well written. Much of the discussion is conceptual but this is always clear and illustrated with well-chosen examples, while engagement with the major literature is in no way over-bearing. The authors do not seek to tell readers what meaningful work is and as such, there is no single line of argument to follow throughout. Instead, they invite reflection on what makes work meaningful (or not), and why, both for those engaged in it and those around them – a valuable exercise which is conducted in a measured and balanced fashion. Each chapter contains questions for further consideration or reflection, which suggests that the book is meant for use in seminars. It is likely to appeal to those with interests in philosophy and questions of value in relation to work, and while not intended as an instructional or ‘how to’ book, it would lend itself to being adapted for use in courses or training on subjects such as business purpose or meaningful work.
‘The Meaning and Purpose of Work: An Interdisciplinary Framework for Considering What Work is For’ by Christopher Wong Michaelson and Jennifer Tosti-Kharas was published in 2024 by Routledge (ISBN: 978-1-032-30933-0). 121pp.
Neil Jordan is Senior Editor at the Centre for Enterprise, Markets and Ethics. For more information about Neil please click here.
