For Profit, A History of Corporations
Book Author: William Magnuson
The story of corporations is a human story. It’s about transformative changes in human society over time as experienced by specific people with specific companies.
In For Profit, A History of Corporations, William Magnuson weaves stories of corporations through key moments across the centuries and connects them to changes in broader society. This includes dealing with topics such as law, politics, war, the environment, religion, art, markets, technology, and morality. Contrary to the perception of corporations being grey and rational, the stories are packed with intense human drama, covering everything from destructive greed to constructive co-operation.
The lessons from history can help us to realize that the current role of corporations in society is likely to change in the future, possibly in a very significant way.
After an introduction that sets the stage with some context, Magnuson proceeds across time starting with ancient Rome. While companies in that era were different in terms of specific structure, they played an important role in various activities such as collecting taxes to fund the Roman Republic. At a certain point, however, corporate greed and corruption became engrained in the system, resulting in a negative impact on society.
Magnuson continues to journey through time to share stories about the Medici Bank during the 1400s, the East India Company in the 1600s, the Union Pacific Railroad Company in the 1860s, the story of Henry Ford from the 1890s, Standard Oil being broken up in 1911 leading to Exxon’s global rise, KKR and the birth of private equity in 1976, finishing with Facebook as the example of a modern technology platform.
Each of these companies had a profound impact on the society around them, and each was in turn shaped by that society. The Medici Bank both prospered and suffered because of a complex relationship with various rulers and religious leaders. The East India Company built up a ruthless global empire and eventually became a part of the British government. The Union Pacific Railroad Company was created during the US Civil War, a time of tumultuous change. Ford’s life was full of dramatic contrasts, including being willing to pay high wages for workers and yet also giving them dreadful working conditions. Exxon, KKR, and Facebook are all currently gigantic corporations with an outsized influence on many aspects of society globally.
While each of the stories is unique, there are some recurring themes that Magnuson explores in the book. Disagreeing with the idea promoted by some people that the purpose of a company is to maximize profits, he believes that the purpose of a corporation across history is to promote the common good of the state at the time. He also makes it clear that in reality corporations have failed to do that on many occasions. There’s also the additional chilling pattern across the stories that corporations do directly influence the state for their own benefit. Although the specifics of daily life in ancient Rome and modern day Silicon Valley may be completely different in many ways, the core tension between the corporation and the common good continues to exist.
Magnuson doesn’t shy away from sharing guiding principles for improving corporations, which he shares at the end of the book.
Why I Recommend This Book
In our current world, in which some corporations are larger than most countries, it’s very possible that we will see a return to increased control by countries over corporations. Companies that operate in many countries may have the additional problem of being pushed in different directions by different countries.
At a minimum, the corporation will continue to evolve, being both shaped by society and shaping society.
While each of us as an individual may not be able to change the future of corporations, our combined voices and actions can directly shape their evolution. The story of corporations can be our human story.
