June 2023 – CGW's Blog

A history of corporations by William Magnuson

Corporations were invented in Roman times to extend the effectiveness of the government. Cicero called them “sinews of the state”

Over the next two thousand years, their form was refined but always followed the logic that they were meant to extend the common good of the nation. Queen Elizabeth didn’t charter the East India Company to make London merchants rich but to organize capital to help extend English rule; Abraham Lincoln chartered the Union Pacific railroad not for Boston capitalists but to bring a unified infrastructure. Profit wasn’t the state’s main interest but a deal was struck to allow for profit if value was created.

The Cold War turned corporations from tools to heroes, “a defining feature of western life,” to contrast with the Soviet Bloc — and that’s when we lost control of them. That’s a major theme from academic William Magnuson’s 2022 book For Profit: History of Corporations.

It’s dense but effective for anyone like myself with an interest in the foundation he provides on business, capitalism and economics. Below I’ve compiled my notes from the book for future research.

Is American leadership ‘Adrift’?

The United States remains the central leader in one of the most economically dynamic periods the world has ever known. We lack an organizing principle and shared vision.

That’s the overall argument from Scott Galloway, the business-school professor and pundit, in Adrift, his 2022 book centered around 100 charts on economics, culture and life. It’s a thoughtful, fun and breezy read for heavy material. It reads a bit like a textbook for the digital age.

Below I share my notes for future reference.

Where are the 5+ million prime age men missing from the workforce?

A small segment of men out earn everyone else, but that’s not the dominant story of the American economy of the last 50 years: Men are falling out of the economy.

Overall: Higher rates of education, a sprawling prison population and antisocial-like behavior (despair) seem to account for at least five million missing prime-age men from the workforce.

The unemployment rate as an indicator entirely misses the crisis of labor-force participation among prime age men — because waves of men aren’t even trying to get formal work anymore. It’s ignored for many reasons, one of which may be that it doesn’t fit a progressive priorities, so it’s largely been voiced by conservatives — with a few exceptions. This is not happening in any other rich country save for Italy; This needs to be an issue of national and bipartisan interest.

That’s the main theme of Men Without Work: America’s Invisible Crisis, a book by demographer Nicholas Eberstadt. The book was first published in 2016, though I read an updated pandemic version published in 2022 amid dramatic economic shifts.

I’ve backed into this sort of trend-reporting when I covered how tenure rates have changed over time, and I’ve come across Eberstadt’s work elsewhere. I took his new pandemic release asa reason to read his full work. It’s urgent and nuanced and interesting and important.

Below I share my notes for future reference.

Limitless: the history and future of the Federal Reserve Bank

The Federal Reserve Bank of the United States has gone from a 30-year run as quiet and boring to one of the highest profile institutions in the world.

Its unique structure (its a central bank, but don’t call it that) and influential leadership (appointed leaders shaping the economy) bring it scrutiny, especially in a new era of “limitless” resources. Its history and future is the focus of Limitless: The Federal Reserve Takes on a New Age of Crisis, a 2023 book written by New York Times fed reporter (and Pittsburgh native) Jeanna Smialek.

The book’s final quarter features quite a bit of detail into the pandemic era machinations of fiscal policy, which will interest some but was too much for my interests. Still the overarching history and connective argument make it worth the read. Last year, I got but could not will myself through former Fed chair Ben Bernanke’s book on 21st Century Monetary Policy. In contrast, Smialek kept me engaged. The author is a regular on Marketplace, the popular public media business and economics radio show and podcast that I follow. I enjoyed it and recommend it.

Below I share my notes from the book for my future reference.

Papyrus: The Invention of Books in the Ancient World

Irene Vallejo sought to learn more about the women who were erased from so much of history.

The result became a far wider history, her 2022 book Papyrus: The Invention of Books in the Ancient World. Her pursuit became an allegory of books themselves: so powerful they make ideas last which means they can be co opted to shape history. As she put it, books resulted in “a fantastical increase in the life expectancy of ideas”

In some sense, they are the original “Google effect,” in which “we tend to remember better where information is kept than the information itself. The book, written in Italian and then translated by Charlotte Whittle, is beautiful and thorough. It’s full of quirks of history and a broad understanding of the project that is our modern set of knowledge.

Below I share my notes for future reference.

Road to Serfdom

American style, lightly regulated democratic-capitalism so dominated the late 20th century that it’s easy to forget it was not destined to be. The form’s critics (and fans) can benefit from unwinding the tape.

Austrian-British economist Friedrich Hayek (1899-1992) was among the chief architects of an ideology that resulted in that system, which gave us unprecedented growth and predictable inequality. With John Maynard Keynes (1883-1946), Hayek outlined much of today’s economic thought, in part by inspiring economist Milton Friedman who influenced the so-called Reagan Revolution. That’s not to say the system is necessarily the best option, but it is worth remembering Hayek viewed himself in opposition to fascists.

Whatever your stance on it, Hayek’s book Road to Serfdom, published in 1944, is an influential of classic liberalism and modern American and western light-touch capitalism. That’s why he still catches the ire of those defending greater state intervention. Since it is so often referenced, I finally read the thing myself.

I share my notes for future reference below.

Blue Ocean Strategy

Business case studies focus on companies. That’s all wrong. The more effective unit of assessment is the “strategic decision.” Companies change because people and external factors shift. Better to take specific moments to assess who, why and how did leadership get it right.

That’s the foundation of what most interests me about popular business book and concept Blue Ocean Strategy, written by W. Chan Kim and Renée Mauborgne. The original 2005 book’s origins are with a 1997 article on “value innovation” in Harvard Business Review. I read the updated version published in 2015.

It’s easy to criticize the careerism of business books like these. Smart management researchers uncover some findings, group case studies and give it cute branding to sell books and lead to a career of consulting and public speaking. It all has a very packaged feel. Yet I have gotten genuine value from many such books once they’re put in the proper concept: Pick from them what helps you and don’t feel required to follow it all.

The big headline of the book is that too often when facing a strategic decision, leaders follow the pack because it feels safe. Their assessment says this is all wrong. Rather than a crowded “red ocean;” Distinguish yourself by turning to open “blue ocean.” In some sense, many other business metaphors — such as Jim Collins’s “Big Hairy Audacious Goal” (BHAG) and the “Queen Bee Role” and “making the donuts” — give similarly productive advice: Fall in love with the problem not the solution, and, rather than following everyone else, uncover what you’re the best in the world at.

The advice is good enough, though, that it can help. A friend advised me it was return to Blue Ocean Strategy. I read it, translated it into a mini-workshop my leadership team, and it helped push us forward at an important juncture.

You might rightly benefit too. Pick up a copy. For my future reference, I’ve shared my notes below.