Taming the octopus : the long battle for the soul of the corporation

Recent controversies around ESG investing and “woke” capital evoke an old idea: the Progressive-era vision of a socially responsible corporation.

By the twentieth century, in fact, the notion that business leaders could benefit society had become a consensus view.

But as Kyle Edward Williams’s brilliant history shows, New Deal liberalism realised a kind of big business supervision narrowly focused on the financial interests of shareholders.

This inadvertently laid the groundwork for a set of fringe views to become orthodoxy: that market forces should rule every facet of society.

Along the way American capitalism itself was reshaped, stripping businesses to their profit-making core.

As a rising tide of activists pushed corporations to account for societal harms from napalm to seatbelts to inequitable hiring, a new idea emerged: that managers could maximise value for society while still turning a maximal profit.

This elusive ideal, “stakeholder capitalism”, still dominates our headlines today.

Williams’s necessary history equips us to reconsider democracy’s tangled relationship with capitalism.