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The Informal Social Control of Business in Britain: 1880–1939*

Published online by Cambridge University Press:  11 June 2012

Jonathan Boswell
Jonathan Boswell
Affiliation:
The City University Business School
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Abstract

Professor Boswell here discusses how informal social control was exercised over business conduct in the six decades from 1880 to World War II. He seeks to explain why some firms were more responsive to the public than others.

Type
Research Article
Information
Business History Review , Volume 57 , Issue 2: British Business History , Summer 1983 , pp. 237 - 257
Copyright
Copyright © The President and Fellows of Harvard College 1983

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References

1 Some recent studies must be partially exonerated, e.g. Coleman, D.C., Courtaulds (Oxford, 1969 and 1980)Google Scholar and Reader, W.J., I.C.I. (London, 1970 and 1974).Google Scholar

2 Schumpeter, Joseph, Capitalism, Socialism and Democracy (3rd edition, New York. 1950)Google Scholar; Marshall, Alfred, “Some Aspects of Competition” (British Association, Leeds, 1890)Google Scholar; Clark, J.M., Social Control of Business (2nd edition, New York, 1939)Google Scholar; Boulding, K.E., Beyond Economics (New York, 1948)Google Scholar and The Economy of Love and Fear (Belmont, 1973); Myrdal, Gunnar, Beyond the Welfare State (New Haven, 1960).Google Scholar

3 For morte philosophical treatments, see particularly Friedrich, C.J., ed., The Public Interest (New York, 1962).Google Scholar

4 It can he argued that both the short-run and long-run opportunity costs, private and social, should ideally be taken into account in the relevant decisionmaking.

5 Railway Companies Association, Minutes, 1868–92, P.R.O. Rail; Alderman, G., The Railway Interest (Leicester, 1973)Google Scholar; Mess, H.A., Factory Legislation and its Administrtion, 1891–1924 (London, 1926)Google Scholar; Kirby, M.W., The British Coalmining Industry, 1870–1946 (London, 1977)CrossRefGoogle Scholar; Williams, J.E., The Derbyshire Miners (London, 1962)Google Scholar; Robson, R., The Cotton Industry in Britain (London, 1957)Google Scholar; Kirby, M.W., “The Lancashire Cotton Industry in the Inter-war Years,” Business History (1976)Google Scholar; P.R.O., BT 55/51, Reorganisation of the Cotton Industry; Dyos, H.C. and Aldcroft, D.W., British Transport (2nd edition, London, 1971).Google Scholar

6 Marshall, “Some Aspects of Competition.”

7 See Cochran, T.C., Business in American Life (New York, 1972).Google Scholar

8 Even in its purest “face-to-face” form, proximity is unlikely to have been a uniformly socially integrative influence: see Laslett, P., The World We Have Lost (2nd edition. New York, 1971).Google Scholar But the view that “familiarity is as likely to breed contempt as tolerance” (Turner, H.A., Trade Union Growth, Structure and Policy [London, 1962], 377)Google Scholar seems absurdly pessimistic.

9 See below.

10 Rees, Goronwy, St. Michael, A. History of Marks and Spencer (London, 1969)Google Scholar and Sieff, Israel. Memoirs (London, 1970).Google Scholar

11 For examples see Briggs, A., Victorian Cities (London, 1963)Google Scholar; Read, D., The English Provinces (London, 1964)Google Scholar; Church, R.A., Economic and Social Change in Midland Town, Victorian Nottingham, 1815–1900 (London, 1966).Google Scholar But these and other studies also throw up a darker side.

12 J.S. Boswell. “Hope, Inefficiency or Public Duty? The United Steel Companies and West Cumberland, 1918–39,” Business History, (January, 1980).

13 Irving, R.J., The North Eastern Railway Company, 1870–1914 (London, 1976).Google Scholar Irving makes the point that all this is consistent with long-run profit maximizing theory.

14 The lengthening list of industries to which this applied included, even before 1914, shipping, oil, and a special case where informal social control went alongside much legislation, the railways; and by the inter-war period, coal, shipbuilding, cotton textiles, iron and steel.

15 The following two paragraphs are mainly based on W.J. Reader, I.C.I, and Bolitho, H.H., Alfred Mond (London, 1933).Google Scholar For Mond's opinions see his Industry and Politics (London, 1928). For I.C.I,'s pricing policies see Reddaway, W.B., “The Chemical Industry” in Burn, D.L. (ed), The Structure of British Industry (Cambridge, 1958).Google Scholar

16 Wilson, C., The History of Unilever (London, 1954)Google Scholar and Edwards, H.R., Competition and Monopoly in the British Soap Industry (Oxford, 1962).Google Scholar That elements of the newspaper campaigns were self-interested or unfair does not affect the argument. For Levers' later departure from pricing restraint on soap, during the aftermath of the war, agai. see H.R. Edwards, Soap.

17 This point is being developed in an article, “Profits, Gifts and Public Sensitivities: Company Annual Meetings and Reports, 1914–18.” See also Boswell, J.S. and Johns, B.R., “Patriots or Profiteers? British Businessmen and the First World War,” Journal of European Economic History, (Autumn, 1982).Google Scholar

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20 Henriques, R.D.O., Bearsted (New York, 1960)Google Scholar and Jones, G.G., The State and the Emergence of the Oil Industry (London, 1980).Google Scholar

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23 The following two paragraphs are mainly based on W.J. Reader, I.C.I. and Bergensen, E., Alfred Nobel (London, 1962)Google Scholar, although the interpretation is largely the author's.

24 Dyos and Aldcroft Transport.

25 T.R. Nevett. “Advertising.” H.A. Mess, Factory Legislation. Boswell, J.S., Business Policies in the Making, Three Steel Companies Compared (London, 1983).Google Scholar

26 These examples obviously exclude the more obvious arguments for dirigisme via legislation or taxation which relate to macro-economic policy, income distribution, or other goals.

27 R.A. Church, Economic and Social Change.

28 Ball, F.J., “Housing in an Industrial Colony, Ebbw Vale, 1778–1914,” in Chapman, S.D. (ed). The History of Working-Class Housing (Newton Abbot, 1971)Google Scholar; Pugh, Arthur, Men of Steel by One of Them (London, 1951)Google Scholar; Tolliday, S., “Industry, Finance and the State, an Analysis of the British Steel Industry in the Inter-war Years” (Ph.D. thesis, Cambridge, 1979).Google Scholar

29 On this last point see for example Barker, T.C., The Glassmakers (London, 1977)Google Scholar; Jolly, W.P., Lord Leverhulme (London, 1976)Google Scholar; Overy, R.J., William Morris, Viscount Nuffield (London, 1976)Google Scholar; Church, Roy, Herbert Austin (London, 1979)Google Scholar; and Corley, T.A.B., Quaker Enterprise in Biscuits, Huntley and Palmers of Reading, 1822–1972 (London, 1976).Google Scholar

30 Hyde, F.E., Cunard and the North Atlantic, 1840–1973 (London, 1972)Google Scholar and Vale, V., “The Government and the Cunard Contract of 1903,” Journal of Transport History, (February, 1979).CrossRefGoogle Scholar

31 Lucas, A. F., Industrial Reconstruction and the Control of Competition (London, 1937).Google Scholar For the partial success of public policies in iron and steel as an example of informal social control of business see Boswell, J.S., Business Policies in the Making, Three Steel Companies Compared (London, 1983).Google Scholar

32 Sturmey, S.G., British Shipping and World Competition (London, 1962)Google Scholar; P.R.O. CAB 27/557, Committee on the British Mercantile Marine; R. Robson, The Cotton Industry; Miles, C., Lancashire Textiles, A Case Study of Industrial Change (London, 1968)Google Scholar; and P.R.O. BT 55/51, Reorganisation of the Cotton Industry.

33 Hannah, L., The Rise of the Corporate Economy (London, 1978)Google Scholar; Howson, S. and Winch, D., The Economic Advisory Council (London, 1977)Google Scholar; and Edwards, J.R., “Company legislation and changing patterns of disclosure in British company accounts, 1900–40” (unpublished paper presented to third International Congress of Accounting Historians, London, 1980).Google Scholar

34 1905 data from Payne, P. L., “The emergence of the large-scale company in Great Britain, 1870–1919,” Economic History Review, (1967)CrossRefGoogle Scholar and Stock Exchange Year Book, 1905. 1935 data, covering 50 companies, from Hannah, L., Mergers in British Industry (Oxford Economic Papers, 1974)Google Scholar, and Stock Exchange Year Book, 1935. For the decline of local links generally see also Erickson, C., British Industrialists, Steel and Hosiery, 1850–1950 (Cambridge. 1959)Google Scholar; D. Read, The English Provinces: op cit; and Lee, J.M., Social Leaders and Public Persons (Oxford, 1963).Google Scholar