Monday, 23 February 2015

The Future of Private Enterprise

One of the more interesting books I read in the past couple of years is the Future of Private Enterprise by George Goyder. It's interesting for various reasons. For one, it's a reminder that when it was published (1954) mainstream views about the nature of the firm were very different.

For example, Goyder quotes from the 1944 Riddell Lecture given by the Conservative Lord Eustace Percy as follows:

"The human association which in fact produces and distributes wealth, the association of workmen, managers, technicians and directors, is not an association recognised by the law. The association which the law does recognise - the association of shareholder-creditors and directors - is incapable of production or distribution and is not expected by the law to perform those functions. We have to give law to the real association, and to withdraw meaningless privilege from the imaginary one."

Goyder's own conception of future model of the company was broadly what we would now call a stakeholder one, balancing the interests of workers, shareholders, consumers and local community. In passing he was also critical of limited liability which he described as a "principle of evil".

Finally, it's also interesting to read a business-oriented book that draws on a wide range of sources to inform its argument. There are references to Kropotkin and R. H. Tawney in there but actually one of the quotations that I like the most is from a novel - Brensham Village by John Moore. How about this?

1.     “I think one of the most horrible and dangerous modern tendencies is this growth of what I’ll call anonymous tyrannies… In the old days, if a factory owner sweated his workpeople, sooner or later, if things got bad enough they stoned his carriage or booed him in the street. If a farmer was a wicked employer they burnt his ricks. And if a landlord was cruel enough and oppressive enough, they could break his windows, or at any rate march up to his house and caterwaul outside his front door. They knew who the industrialist was, who the farmer was, who the landlord was. Those people had names and faces, and it was common knowledge where they lived… But this new tyranny is quite different. You don’t know where the head of the combine lives, even if you happen to know his name.”


Andrew Curry said...

I'd love to see a follow up post that expands on why Goyder saw limited liability as "a principle of evel".

Tom Powdrill said...

I'll try and bung a bit more up tonight!