Over the course of the seventeenth and eighteenth centuries, the desire of poorer people in cities across Europe to consume what were once luxuries enjoyed only by the very rich was just as influential in shaping the history of work as the invention of technologies to exploit the energy in fossil fuels. Without it, there would have been no markets for mass-produced items, and without markets the factories would never have been built. It also rewrote the rules by which much of the economy operated. The growth of Britain’s economy increasingly came to depend on people employed in manufacturing and other industries reinvesting their wages in the very same products they and their factory workers manufactured.

Leslie Hannah, an eminent business historian, has shown how the ‘rationalisation’ of industry, which was favoured by the British Government (represented by the Bank of England), set the stage for the new ‘corporate economy’ which would characterise Britain for decades. The 1920s saw the creation by merger of ICI (chemicals), the Distillers Company (Scotch whisky) and Unilever (soap and margarine). A similar wave of mergers in Germany established IG Farben and Vereinigte Stahlwerke as the dominant chemical and steel producers respectively. (Both these companies were dissolved by the victorious Allies in 1945.)

11: Value

“Business is embedded in a social, political and cultural environment, and we cannot understand its outcomes without understanding these interrelationships. Nor seriously maintain that the outcome of market allocation is a distribution of resources based on desert – the moral rather than the sandy kind.

PART 7: Capitals in the Twenty-First Century

28: Capital as a Service

“And it would be foolish to think that, if one went out to buy the quantities of capital and labour that Apple purchases, one would be able to produce iPhones and MacBooks – any more than one could do so by purchasing appropriate quantities of silicon and glass. The ingredients list is not the recipe. Thomas Thwaites laboriously demonstrated the fallacy of this mechanistic analysis of production through his efforts to make a far simpler item. Capital and labour, silicon and glass: all these factors of production are necessary but no physical description is ever sufficient, or even close to sufficient.

As the economic historian Deirdre McCloskey has pointed out, we do not talk about waterism, essential though running water is to our personal and commercial lives. Or power-ism, although the new availability of first steam and then electric power may have been a more important contributor to the modernity of economic life than any change in the availability of capital. If the managers of a modern business do not want to succumb to the demands of their capital supplier, they can buy their capital services elsewhere. In fact, it is often rather easier for them to exercise that choice than it is to change their water or electricity provider. That these points seem novel, even disturbing, is a measure of the extent to which outdated rhetoric developed to describe the Carron Works and the plant at the River Rouge continues to frame our thought.