The Company: A Short History of a Revolutionary Idea (Modern Library Chronicles Series Book 12)

Should a company possess a private army?

The central good of the joint-stock company is that it is the key to productivity growth in the private sector: the best and easiest structure for individuals to pool capital, to refine skills, and to pass them on. We are all richer as a result.

Since the mid-nineteenth century, there has been a battle between two different conceptions of the company: the stakeholder ideal that holds that companies are responsible to a wide range of social groups and the shareholder ideal that holds that they are primarily responsible to their shareholders.

The trend at the moment is for the corporation to become ever less “corporate”: for bigger organizations to break themselves down into smaller entrepreneurial units. The erosion of Coasean transaction costs will make it ever easier for small companies—or just collections of entrepreneurs—to challenge the dominance of big companies; and ever more te

multinationals will continue to represent much of what is best about companies: their capacity to improve productivity and therefore the living standards of ordinary people. But they will also continue to embody what is most worrying—perhaps most alienating—about companies as well.

The second conclusion is that multinationals have never been loved, either at home or abroad.

The history of multinationals points to two contradictory conclusions. The first is that multinationals have generally become a force for good—or, at the very least, that they have given up sinning quite so egregiously.

For most of the twentieth century, Ford was essentially a confederation of national companies. Each country had its own head offices, design facilities, and production plants. At one point, Ford even had two Escort cars on the road that had been designed and built entirely separately. Yet, by the 1990s, it was developing “world cars” with common pa

The deregulation of the capital markets allowed smaller companies to borrow serious money, while innovative management techniques, such as just-in-time production, allowed them to mimic the efficiencies of bigger competitors.