How to Succeed in Business History Without Really Trying: Remarks on Martin J

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How to Succeed in Business History without Really Trying: Remarks on Martin J. Sklar's Corporate Reconstruction of American Capitalism

James Livingston RutgersUniversity

It is difficultto discussMartin Sklar'swork in termsof businesshistory becausehe refusesthe label and its correspondinglimits. He asksus to reconsiderthe meaningand significanceof Americanhistory as such.Of coursehe can teachus a great deal aboutthe field of businesshistory, but onlyif we are willingto cross,and to revise,the boundariesbetween that field andthe largerdiscipline. I propose,then, to arguethat Sklarhas changed the form and content of businesshistory by transcendingit--that he hasboth preserved and annulled it. I beginby summarizingSklar's recuperation of "corporateliberalism." Then I showhow that recuperationsettles three of the centralquestions introduced, but neveradequately addressed or resolved,by the historiographicaltrends of the last thirty years.I concludeby specifyingthe changesin the conductof businesshistory which Sklar's periodization makes possible and necessary. Many scholarshave used or developedthe notion of corporate liberalismsince 1960, when Sklar coined the phrasein an essayon Woodrow Wilson. But until he reclaimed and reworked it in the book of 1988, most scholarsunderstood it as the inventionand the ideologyof corporate capitalistsand their alliesrecruited from the new "professional-managerial class."Sklar grasped what Eugene Genovese has been trying to teachus about hegemonysince 1965, and arguedaccordingly that just as the slaveholders, ideologyarticulated a lived relation betweenmasters and slaves,but also between large planters and small farmers--andas such was the effective creationof all partiesto the bargain--socorporate liberalism transacted new relationsbetween capital and labor,but alsobetween sectors or fractionsof the capitalistclass. As such,it, too, was (and is) the effectivecreation of all partiesto the bargain. Sklar is particularlyinterested in the contributionsof small entrepreneurs("proprietary capitalists") to the emergingcorporate-liberal consensus.But he alsotreats intellectuals, politicians, and the unionizedsector of the workingclass as activeparticipants in the variegatedsocial movement that ratifiedcorporate capitalism by conveningcorporate liberalism. Here is

how he summarizesthe point:"corporate liberalism expressed the cross-class characterof the movementfor corporatecapitalism. Accordingly, corporate liberalism emerged not as the ideologyof any one class,let alone the corporatesector of the capitalistclass, but rather as a cross-classideology expressingthe interrelationsof corporate capitalists,political leaders, intellectuals,proprietary capitalists, professionals and reformers, workers and tradeunionists, populists and socialists..." (35). So conceived,the form of corporate liberalism was the social movement,or the cross-classcoalition, that constitutedcorporate capitalism. What, then, was its essentialcontent? We shouldbear in mind that Sklar is tryingto explainthe limitsof 20th-centurypolitical discourse: "In the United States,as in othercountries, conventional political conflict has depended upon its groundingin a largerconsensus, in the absenceor breakdownof whichit hasverged upon or falleninto pervasiveviolence or civilwar" (39). Corporate liberalism,Sklar claims, has served as this larger consensussince the ProgressiveEra. Beforethen, corporate liberalism--construed asthe emergent ideologyof a cross-classsocial movement--had to contendwith populismand socialismfor the allegianceof Americanpublics. But Sklardemonstrates that all three waysof interpretingthe usablepast and positinga plausiblefuture wereanimated by the samebeliefi that the unmanagedor unmodifiedmarket had becomea threatto both socialorder and individualliberty. Sothe regulativeassumption of Americanpolitical discourse after 1890 was that the relationbetween the law and the market (thus betweenthe "state"and the market) had to be revisedto addressnew and probably unprecedentedconditions in the market.For populists,these conditions were defined by the "unnatural"market power of "the trusts,"the banks,and the railroads.For socialists,they were definedby the inordinatesocial power of capitalists.For both, however,the solutionwas to abrogatesuch power by makingthe market, and thus societyat large, somehowsubordinate to the state.Their programstherefore represented a radical break with the American past,or ratherwith what Sklar designates the centralprinciple of American politics:the supremacyof societyover the state(as the founderswould have it, the sovereigntyof the people). Accordingto corporateand proprietarycapitalists alike, the new market conditionswere definedon the one hand by ruinous,unregulated competition(thus "overproduction"), and, on the other,by the extraordinary capacitiesof large corporateenterprise. In this sense,the standpointof the capitalistclass disclosed facts that populistsand socialistsalso acknowledged. But the corporatesector of the capitalistclass could plausibly claim that its new inventionspromised the reintegrationof a societytorn by conflictalong lines of both classand region.It could claim, for example,that the centralizationof businessacumen in the boardroomswould allow for long- term investmentplanning; such planning would presumablymodulate the businesscycle and pacifyinter-class relations. Pro-corporate leaders could also plausiblyclaim that, properlyregulated, the "greatindustrial combinations" signifiednot the end but the renewal of individualopportunity and social mobilityfor the Americanmiddle classesold and new (that is, for both proprietaryand professional versions of the middleclass). For withinthe new 32

corporatebureaucracies, the determinantsof statuswere to be naturaltalents, past effort, and learnedskills, not familial connectionsor inheritedwealth. In these terms, only corporateliberalism--construed as both social movementand ideology--addressednew conditionsin the market,yet offered a solutionthat was consistentwith both the American politicaltradition and the prospectof continuedsocial-economic development. The pro-corporate leadersamong capitalists,politicians, lawyers, and intellectualsunderstood perfectlythat the emergenceof corporatecapitalism required the revisionof existingrelations between the marketand the law (and the state).They also identifiedthe new corporateforms of enterpriseas productsof contractual liberty,and beyondthat as momentsin the evolutionof westernculture. To aborttheir developmentwould be to repudiatefreedom and progress. So their questionwas not whetherbut how to regulatethe corporations--howto do so in a way that preservedthe supremacyof societyover the state and yet preventedthe eclipseof individualismwithin a societybeing reshapedby corporate(and other) bureaucracies. But the samequestion determined the approachof everyother social classand stratumto the same issues,Sklar demonstrates,and thus animated all three of the cross-classsodal movementscontending for the allegianceof Americanpublics. Understood in this way, corporateliberalism becomes a complicatedbut comprehensivepolitical protocol to whichevery modern social class and stratum has consciouslycontributed, in the belief that the alternatives--theunregulated market or statism--areworse. In the end, therefore,corporate liberalism did not somuch defeat its rivals as it absorbed them. To illustratethe argument,Sklar studies the debatescentering on anti- trust legislationand corporateregulation, from the ShermanAct of 1890to the Federal Trade CommissionAct of 1914. Here, in Part I, his focus is the mutualadaptation of corporateand proprietary capitalists, although he hears thevoices of the labormovement in thesedebates as well (223-73). In PartII, under the plain headingof "Politics,"he turnsto a closeinspection of the presidents--Roosevelt,Taft, andWilson--who represent the threevariants of corporateliberalism forged in theProgressive Era. By 1910-12,Roosevelt had movedtoward a quasi-statistpolicy position on the trusts,which Sklar shows wasa productof hiswillingness to enterinto dialogue with socialists (343-64). TR's positiondid not, however, imply either the rejectionof capitalism--ofthe large corporations--orthe embraceof socialism.Instead, a "state-directed economywas ... the alternativeto classwar, proletarian revolution,an 'extremeand radical democracy,' and socialism" (357). Taft meanwhilemoved in the oppositedirection, toward "regulatory minimalism," but notbecause he was somehowlacking in progressivecredentials or beliefs. Rather, he recognizedthat the"ultimate issue is socialism,"assumed that socialism meant statecommand of the economy,and believed,accordingly, that Roosevelt's statist-tendingposition embodied a threatto capitalismas such (364-81). Taft's minimalismentailed a genuinely"trust-busting" approach to corporate concentration,then, becausefrom his standpointthe law and its attendant formsof deliberationrepresented the onlymeans of regulatingthe market whichwould not necessarilylead to statism.As he put it in October1911, "We 33

mustget back to competition.If it is impossiblethen let us go to socialism, for thereis no waybetween" (cit. 378). Wilsondisagreed with both Rooseveltand Taft. He thoughtthat the "waybetween" statist command and regulatoryminimalism could be steered by"positive government." So Wilson's language and policies with respect to the corporationswere not schizophrenic,nor evencontradictory, Sklar explains (383-430).Instead, they expressed the cross-classcharacter of the movement for corporatecapitalism, and the crucialhistorical distinction between those corporationsthat couldbe definedas "publicutilities"--hence subject to state control--and those that could not be so defined. Where TR would define practicallyall largecorporations as "public utilities," and subject them to state controlin the name of equalityand opportunity,Wilson would distinguish between"natural monopolies" subject to the state and thosecorporations better left to regulationby expertcommissions with limited legal powers. WhereTaft woulduse existing law and legal argument to enforcecompetition, and thus precludethe need for statist control of concentratedindustries, Wilsonwould use regulationby commissionto supplement(not supplant) existinglaw andlegal argument--to articulate, and if necessaryto enforce,the distinctionbetween the corporationsthat had evolved lawfully and the "trusts" that had beenbuilt on unfairbusiness practices. The WilsonJanvariant of corporate liberalism representsthe mainstreamof Americanpolitics since the ProgressiveEra, while the other two variants,associated in Sklar'saccount with Rooseveltand Taft, represent the outer limits of the consensusthat has since governedour political discourse.By that account,no presidentand no presidentialcandidate in recentmemory--neither Ronald Reagan nor JesseJackson--has violated the political protocol authorizedby the original movementfor corporate capitalism.The centermay not be vital,but it still holds,and evenholds us together. Let menow turn to thehistoriographical possibilities residing in Sklar's CorporateReconstruction. Perhaps the best way to summarizemy claim in this regardis to say that Sklar'sachievement is comparableto that of Gordon Wood. BernardBailyn's rediscovery of ideologyin the AmericanRevolution could not and did not become accessible or useful to most historians of the revolutionuntil Wood showedthat the apparentlyarcane intellectual history in whichBailyn dealt was only one dimension of a socialand politicaldrama in whichall socialclasses and strata--notjust the well-educatedjurists who wrote and read the pamphlets--playedsignificant roles. Once Wood had accomplishedthat, the historyof the periodand the eventwas renewedand reshapedin astonishingways because the socialhistorians (with a few unfortunateexceptions, of course)did not feel the need to challengethe intellectualhistorians for controlof the field;they could benefit from the new divisionof laborthat Wood's scholarship made possible. Just so, I wouldsay, with respectto thehistoriographical possibilities of Sklar'swork. He hasmade the apparentlyarcane economicand/or businesshistory written in a Chandlerianmode over the last thirty yearsseem both accessibleand useful to the largerdiscipline. In otherwords, that historynow becomesnecessary to the explanationand periodization of U.S. history:hereafter social, political, 34

cultural, and intellectual historianswill have to consult the businessand economichistorians if theywant to speakof capitalismas something more or lessthan a moral blight on the 20th century.And vice versa. Or will they?Unlike, say,an electionor a war, an idea doesnot have consequencesunless people think and write asif it were consequential--inthis case,unless historians think and write asif Sklar'sapproach settles significant questionsand raisesnew onesthat are equallysignificant. Let me proceed, then,to showhow it doesboth. In my view,the historiographicalrevisionism of the postwar period has raised three critical questions.First, can we reconcileclass analysis and pluralismif we construeeach as both scholarly method and political principle?Second, how are we to characterizethe Americanpolitical tradition--as shaped by conflictor consensus?Third, how can we describethe relation betweeneconomic change, social movements, intellectualinnovation, and politicalpower? These are in fact three waysof asking a pressing,practical questionabout the sourcesand conductof American politicaldiscourse in our ownhistorical epoch. But we havetended to addressthat profoundlypolitical question as if it requiresone voice,one answer--asif we mustchoose, for example,either conflict or consensus,or give the principleof classpriority over all otherpossibilities. Sklar'sapproach demonstrates that to proceedin this manneris to mutilatethe relevanthistorical reality, and accordinglyto limit our political choicesin the future.He claimsthat capitalistscan and shouldbe understood "notsimply as personificationsof 'interests,'but underthe dignityof class" (29-30). Even so, his argumentaccommodates, indeed foregrounds,the differencesand the conflictsbetween the older proprietarysector and the newer corporatesector of a capitalistclass still in formation;thus he is able to portrayproprietary capitalists as something more than pathetic figures from the disintegratingpast, and corporate capitalistsas somethingless than omniscientpurveyors of the impendingfuture (chap. 4). In this sense,his argumentprecludes any choicebetween pluralism and classanalysis. Sklar similarly claims that conflict and consensusare not to be understoodas antitheticalor alternatingstages of politicaldevelopment in the U.S.. He showsthat the corporate-liberalconsensus elicits, naturalizes, and regulates certain kinds of conflict,and suggeststhat this is the political functionof a vital cross-classideology (of whatthe politicaltheorists and cultural-literary historianswould call a "hegemonicarticulation"). Sklar'smost important contribution to the field of businesshistory and to the largerdiscipline resides, however, in his responseto the third question, a responseto whichhe givesthe name"periodization." The premiseof that periodizationis pragmaticin the strictestsense because it disallowsany ontologicaldistinction between subjective and objective--between thoughts and things,as Jameswould have it--and thereforeprojects business/economic historians,and all thosewho claimto mapthe "objective"world of things,into the largerand less inertial worlds of culture,ideology, and subjectivity (1-40, esp.6-14). Here is howSklar summarizes his premise: "Even in its narrowest sense,capitalist business activity is not simplyeconomic activity abstracted from the socialand political spheres or from ideasand ideals" (7). The point is then "to think of changesin the economyproper as the functionof social 35

movements"(12), whichare of courseconstituted as well as permeatedby their ideasand their arguments. To my mindthe testof thisapproach is foundin Sklar'streatment of antitrustlaw, on whichthe entirebook turns.As he notes,he oncebelieved, and argued,that the ShermanAct wasan "effectivecause" of the corporate reorganizationof productionand distribution(155-66, esp. 157n.172). From that standpoint,broad-gauged legal history would be sufficientto accountfor, and would lend appropriateirony to our accountsof, the emergenceof corporatecapitalism. But Sklarsubsequently decided that writing such history wouldnot be muchdifferent than writing broad-gauged business or economic history.So he haswritten a bookthat exploresthe intersectionof legaland economic--andpolitical--discourse by adapting the principlesof socialhistory to thestudy of capitalism,not merely of businessenterprise. The resultcannot be classifiedas legalor economicor politicalor businessor evenintellectual history.Indeed Sklar finallyproposes that we explainthe rise of corporate capitalismby referenceto the evolutionof the "capitalistfamily" in the U.S.; by doingso he projectsus into the domain of socialand cultural history (164- 66). In otherwords, he adjournsbusiness history as usual,and asksus to becomesocial historians of Americancapitalism, with all that implies. If we do as he asks,we may be able to revisethe narrativesnow providedby business/economichistory and by socialhistory. In placeof the behavioristmodel that stillshapes business history, through which the return of a repressedvulgar Marxism is effectedby studyof managerial"responses" to technologicalor economicchange, we could install a model that accommodatesthe historicalrealities of socialagency, cultural contingency, politicalpossibility. We wouldnot then be theprisoners of progress,and could claimto be somethingmore than positivists in flightfrom the parochialpast. At anyrate our narrativeswould not reproducethe ironicdistance from the pastthat keepsus in exilefrom the present.In placeof the highmodernist modelthat still shapessocial history, through which the figureof the Gothic freeholderspeaking a populistidiom is reinstatedas the paradigmof the moralpersonality, we could install a modelthat acknowledges, and avoids, the dangerof producinga monologicalparody of the corporate-liberalconsensus whichdoes not intersectwith thisrival, but insteadruns parallel to it, asif the alternativesavailable, then andnow, were mutuallyexclusive. We wouldnot thenbe theprisoners of thepast, and could claim to be somethingmore than romanticsin flightfrom cyberhatedprogress. Again, our narrativeswould not reproducethe ironicdistance from the pastthat keeps us in exilefrom the present.And so the storieswe tell aboutourselves in the form of history would allow for a future that is neither inevitable return to nor radical break from the past--theywould make us feel at homein historicaltime. So conceived,the crucialquestion raised by Sklar'sbook is, can we buildsuch a model,and narratethe futureaccordingly? Or, to put it another way,now that we knowhow and why corporate liberalism was convened, what kind of socialmovement would be requiredto go beyondit? Even if we believethat corporateliberalism is alreadyevolving into a NorthAmerican versionof marketsocialism, this remains a practicalquestion; for the central principleof Americanpolitics is still at issuein currentdebates.