Christine Meisner Rosen and Christopher C. Sellers
The Nature of the Firm: Towards an
Ecocultural History of Business
B
usiness history has never paid much attention to the environment.
Brushing aside the firm's reliance and impact on the natural
world, early business historians zeroed in on the role of the entrepreneur in big business's rise. They found it easy to truncate, marginalize
or altogether ignore the physical processes by which the stuff of
nature—"raw" materials—was carved or coaxed out of mountains, forests, and deserts, channeled into factories and squeezed and cajoled
into commodities. They scarcely considered the ever-changing varieties of "waste" generated by businesses and customers, which so often
infiltrated, polluted, and otherwise altered the world beyond factory
and office. They devoted equally little attention to the effects of
resource extraction and use on plants, animals, land, air, or water,
much less entire ecosystems and climate.1
CHRISTINE MEISNER ROSEN is an associate professor of business and public policy
at the Haas School of Business at the University of California, Berkeley.
CHRISTOPHER SELLERS is an associate professor of history at the State University
of New York at Stony Brook.
We would like to thank Joel Tarr for helping to inspire us to do this special issue on business and the environment. We would also like to thank him and Brad Bateman for their suggestions for improving our introductory article.
1
Much of this early work gave no attention to environmental problems even though it was
highly critical of the industrialists who created big business. For example, Matthew Josephson's The Robber Barons: The Great American Capitalists, 1861-1901 (New York, 1934), one
of the early classics in American history, bitterly critiques the architects of American big business without specifically addressing their business's many harmful environmental impacts.
This failure is particularly clear in books dealing with John D. Rockefeller and the development of the environmentally degrading oil industry. See for example, Ida M. Tarbell, History
of the Standard Oil Company (New York, 1925) and Allan Nevins, Study in Power: John D
Rockefeller, Industrialist and Philanthropist (New York, 1953). See also Peter D. A. Jones,
ed., The Robber Barons Revisited (Boston, 1968).
Business History Review 73 (Winter 1999): 577-600. © 1999 by The President and
Fellows of Harvard College.
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Christine Meisner Rosen and Christopher C. Sellers 1578
The emergence of Chandlerian institutional history perpetuated this
neglect. The organizational approach encouraged business historians to
focus on the dynamics of corporate management and the internal evolution of the firm. Its adherents impressed upon their colleagues the value
of analyzing how corporate managers responded to market conditions
beyond the firm's walls, through strategies and organizational structures.2 Although there was nothing in this approach that would have prevented them from examining how firms organized themselves to manage
natural resource utilization, pollution control, or any other aspect of the
interface between the corporation and the environment, Chandler and
his followers chose to concentrate on matters relating to vertical integration and the evolution of the large, diversified, multi-divisional industrial
corporation. In the process of investigating these admittedly important
aspects of the rise of big business, they continued to ignore the subject of
big business's dependence and impact on the natural world. Their inattention persisted despite the fact that they wrote at a time of mounting
public outcry over industrial pollution and increasing conflict between
business and an ascendant environmental movement.3
We hope this special issue of the Business Histonj Review will
impress upon business historians the richness, relevance, and importance of
questions about business's interface with the natural environment. An environmentally-minded business history will, we contend, restore crucial materialist dimensions to the field: not just the concreteness of money and
markets, but of fire, rock, dust and smoke. We also believe there are few
2
For evidence of Chandler's immediate impact, see Louis Gambols, "The Emerging Organizational Synthesis in American History," Business Histonj Review 44 (Autumn 1970):
279-290 and Glenn Porter, The Rise of Big Business, 1860-1910 (Arlington Heights, 111.,
1973). An excellent review article detailing Chandlers longer term impact is Richard R.
John, "Elaborations, Revisions, Dissents: Alfred D. Chandler, Jr.'s, The Visible Hand after
Twenty Years," Business History Review 71 (Summer 1997): 151-200. Chandlers most important contributions to the field include Strategy and Structure: Chapters in the History of the
American Industrial Enterprise (Cambridge, Mass., 1962); Alfred D. Chandler. Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977); and
Alfred D. Chandler, Jr., Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge,
Mass., 1990).
3
An exception is Joseph A. Pratt, "Growth of a Clean Environment? Responses to Petroleum-Related Pollution in the Gulf Coast Refining Region," Business History Review 52
(Spring 1978): 1-29. By the mid-1980s business historians were awakening to the importance
of addressing environmental issues. See, for example, Richard S. Tedlow and Richard R.
John, Jr., eds., Managing Big Business: Essays from the Business Histonj Review (Cambridge,
Mass., 1986), which included a section on "The Corporation, Technology, and the Environment." But this section only reprinted Pratt's article alongside two others that confined their
environmental attentions to energy issues—a telling indication of how little research of this
sort had as yet been done. In this collection, see also Albro Martin, "James J. Hill and the
First Energy Revolution: A Study in Entrepreneurship, 1865-1878," 88-106 (first appeared in
Business Histonj Revieic 50 [Summer 1976]: 179-197); and Richard H. K. Vietor, "The Synthetic Liquid Fuels Program: Energy Politics in the Truman Era," 299-328 (first appeared in
Business Histonj Review 54 [Spring 1980].- 1-34).
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j
The Nature of the Firm 1579
more promising avenues for integrating business history into larger historic
panoramas or for ushering the field through a cultural turn.
Business historians can profit in this regard from terms and modes of
analysis that have evolved in the field of "environmental history." We also
have an auspicious opportunity to help mold and deepen the environmental
history enterprise. Since the founding of the American Society for Environmental History and the establishment of its journal in the mid-1970s, environmental historians have evolved their own ambitious agenda. The most
sweeping statements of purpose—such as that by Donald Worster on "the
role and place of nature in human life'and William Cronon on "placing
nature in [human] history"—have helped make it one of the mostly broadly
integrative historical projects around.4 Environmental historians have developed an ever widening and more sophisticated understanding of "nature's"
meanings and the variety of ways it has figured into human life and history.0
Oddly enough, however, despite this broad conception of their field, our
colleagues in environmental history have shown almost as much reluctance
to tackle business's environmental relations as business historians have. Both
fields have sorely neglected the borderlands between them. Path-breaking
environmental historians have launched a harsh critique of capitalism that
has entailed surprisingly little scrutiny of managers or corporations.6 Early
on, most environmental historians concentrated on the history of wilderness,
agriculture, the conservation movement, or modern environmentalism,
where they believed nature and its defense were most obviously found.' Preoccupied with setting out a distinctive field of historical endeavor in relation
4
Donald Worster, "Transformations of the Earth: Toward an Agroecological Perspective
in History7," and William Cronon, "Modes of Prophecy and Production: Placing Nature in
History," Journal ofAmerican History 76 (1990): 1089, 1122 (quotes).
° Reviews of this historiography include: Richard White, "Historiographic Essay; American Environmental History: The Development of a New Historical Field," Pacific Historical
Review (1985): 297-335; Donald Worster, "Doing Environmental History," in idem., ed., The
Ends of the Earth (New York, 1988); Alfred Crosby, "The Past and Present of Environmental
History," American Historical Revieic 100 (1995): 1177-89; J. Donald Hughes, "Whither Environmental History," American Society for Environmental History News 8 (Autumn,
1997): 1-3.
6
The many works offering critiques of capitalism include, Donald Worster, Dust Bowl:
The Southern Plains in the 1930's (New York, 1979) and Rivers of Empire: Water, Aridity, and
the Growth of the American West (New York, 1985); William Cronon, Changes in the Land:
Indians, Colonists, and the Ecology of New England (New York, 1983); Richard White, Roots
of Dependency: Subsistence, Environment, and Social Change among the Choctaws, Pawnees, and Navajos (Lincoln, Nebr, 1983); and Carolyn Merchant, Ecological Revolutions; Nature, Gender and Science in New England (Chapel Hill, N.C., 1987).
' Samuel Hays, Conservation and the Gospel of Efficiency (1959; edition used, New York,
1975); Roderick Nash, Wilderness and the American Mind (third edition; New Haven, 1982);
Susan Schrepfer, The Fight to Save the Redwoods: A History of Environmental Reform, 19171978 (Madison, Wise, 1983); Michael Cohen, The Pathless Way: John Muir and American
Wilderness (Madison, Wise, 1984); Stephen Fox, John Muir and His Legacy: The American
Conservation Movement (Roston, 1981); on agriculture, see most works cited in footnote 5.
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Christine Meisner Rosen and Christopher C. Sellers 1580
to frontier and Western history as well as environmentalism itself, most
assumed that they knew the history of the large corporation all too well—its
inner workings as well as its outwardly impacts. They envisioned a monolithic nineteenth- and twentieth-century economic system that offered little
entry point or incentive for closer study of individual companies, businessmen, or even industries as a whole. A 1990 Journal of American History
roundtable presenting the views and agendas of major environmental historians offered virtually no discussion of the shift to corporate capitalism that
had become the central preoccupation of business history.8
Astonishingly, even the worst ravages of industry have gone little studied
by either business or environmental historians. As Joel Tarr and Jeffrey Stine
pointed out last year in a Technology and Culture review, historians "have on
the whole neglected not only worker safety but also the environmental consequences of industry and manufacturing." Most histories of the iron mining
and iron and steel manufacturing, for example, "gloss over or totally ignore"
the industry's environmental repercussions.9 Until recently, historians of the
chemical industry barely touched on its devastating mid-century environmental impacts, despite how these helped compel the stricter environmental
regulations of the 1970s.10
Things have started to change, however, both in business history and
environmental history. First, as "organizational" lines of scholarship have
matured and the limits of the Chandlerian model have become apparent,
younger business historians have cast about for fresh lines of inquiry that can
carry the field into new realms. The recent Hagley conference on the future
of business history featured a variety of efforts to define new research agendas and analytical models, via newer and less functionalist sociological thinkh
See Donald Worster, Alfred Crosby, Richard White, Carolyn Merchant, William
Cronon, and Stephen J. Pyne, "A Roundtable: Environmental History," JtnimalofAmerican History 76 (1990): 1087-1147.
9
Jeffrey Stine and Joel Tarr, "At the Intersection of Histories: Technology and the Environment," Technology and Culture 39 (1998): 601-641, see especially 621-225. Quotes are
from pp. 621 and 623.
'" Stine and Tarr, 622-623. A big exception is the recent book by Craig E. Colten and Peter N. Skinner, The Road to Love Canal: Managing Industrial Waste before EPA (Austin,
Tex., 1996) on the management of hazardous waste by the chemical industry. Far more typical is David Hounshell and John Kenly Smith, Jr., Science and Corporate Strategy; Du Pont
Rl~D 1902-1980 (Cambridge, U.K., 1988), which squeezes fine research into that firm's industrial toxicology into a tiny and anomalous corner of its narrative. Histories centered on a
single firm deal with environmental questions in a similar vein, see Sheldon Hochheiser, Rohm and Haas: History of A Chemical Company (Philadelphia, 1986); Andrew J. Butrica, Out
of Thin Air: A History of Air Products and Chemicals. Inc., 1940-1990 (New York, 1990); and
David Dyer and David B. Sicilia, Labors of a Modern Hercules: Evolution of a Chemical
Company (Boston, 1990); though see also Fred Aftalion, A History of the International
Chemical Industry, trans. Otto Theodor Fenfey (Philadelphia, 1991). Jeffrey Meikle's Plastic:
A Cultural History (New Brunswick, N.J., 1996) carves out a more central place in its story
for environmental anxieties about plastic, mostly in connection with cancer and biodegradabilitv.
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The Nature of the Firm 1581
ing about organizations, the economics of imperfect information,
structurationist theory, and post-structuralist cultural analysis. Among these
proposals was an appeal by one of us to make "industrial ecology" the starting
point for a more environmental business history.11
Second, changing attitudes in the business and regulatory worlds and in
the fields of engineering and economics have bolstered the relevance of
environmental issues to business history. The new generation of managers
now taking the helm of corporations includes many men and women who
grew up with the environmental movement and arguably share its goals—
who seek ways to reduce business's harmful environmental impacts while
maintaining or enhancing their firms's competitive advantage. "Green" packaging, eco-tourism, organic foods, and other environmentally friendly forms
of consumption have acquired a significant presence in the market place.12
EPA regulators now hope to expand markets for pollution or emissions credits and to step up programs encouraging voluntary pollution reductions,
beyond what is required by law.13 Industrial engineers have pioneered the
concept of industrial ecology and, following its precepts, have joined with
managers at some corporations to begin developing programs in pollution
source reduction, design for environment, industrial waste exchanges, product remanufacturing and other innovative technologies and strategies for
reducing industry's environmental impacts.14 Economists interested in
bridging the gaps between their field and natural ecology have joined
11
Philip Scranton and Roger Horowitz, eds., "The Future of Business History," Business
and Economic History 26 (1997): 1-281; Christine Meisner Rosen, "Industrial Ecology and
the Greening of Business History," Business and Economic History 26 (1997): 123-137.
12
For references on recent trends in green packaging, ecotourism, and organic food industry, see N.H. Lampkin and S. Padel, eds., The Economics of Organic Farming: An International Perspective (Oxon, 1994).
13
Robert Gottlieb, ed., Reducing Toxics: A New Approach to Policy and Industrial Decision Making (Washington D.C., 1995). An excellent source of information on developments
in environmental regulation in the U.S. and Europe is Business and the Environment published by Cutter Information Corp. beginning in 1990.
14
Braden R. Allenby and Deanna J. Richards, eds., The Greening of Industrial Ecosystems (Washington D.C., 1994); Robert Ayres, Industrial Ecology: Towards Closing the Materials Cycle (Cheltenham, UK, 1996); John R. Ehrenfeld, "Industrial Ecology: A Strategic
Framework for Product Policy and Other Sustainable Practices," The Second International
Conference and Workshop on Pnxluct-Oriented Policy, Stockholm (1994); T.E. Gradel and B.R.
Allenby, Industrial Ecology (Upper Saddle River, N.J., 1995), T.E. Gradel and B.R. Allenby,
Design for Environment (Upper Saddle River, N.J, 1996); Tim Jackson, Material Concerns,
Pollution Profit and the Quality of Life (London, 1996); E.A. Lowe, J.L. Warren, and S.R.
Moran, Discovering Industrial Ecology: An Executive Briefing and Source Book (Columbus,
1997); Robert Sokolow, Industrial Ecology and Global Change (Cambridge.U.K., 1994);
Ronald Smith, Profit Centers in Industrial Ecology: The Business Executive's Approach to the
Environment (Westport, Conn., 1998); see also the Journal of Industrial Ecology, which began in 1997 out of the Yale School of Forestry and Environmental Studies. A useful but already somewhat outdated reference book on this topic is Peter Groenewegen, The Greening
of Industry Resource Guide and Bibliography (Washington D C , 1996). See also Business
and the Environment.
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Christine Meisner Rosen and Christopher C. Sellers 1582
together to inaugurate an "ecological" economics and have extended analytic
approaches developed to assess the value of natural resources to measure,
instead, the value of entire ecosystems like forests and wetlands.1'
Related developments in environmental history and the environmental movement have encouraged environmental historians
to move in similar directions. During the Clinton years, the environmental community has evolved in ways that mirror the changes
taking place in business. Environmentalists have become increasingly intrigued with market-oriented ways of thinking and regulating. Whether this revival of the market signals a conservative turn
in environmentalism or a frustration with legally mandated and
administered controls, it has prompted growing numbers of environmental historians as well as environmentalists to start rethinking the r e l a t i o n s h i p s b e t w e e n b u s i n e s s , markets, and
environmental change.16 Just as importantly, an "environmental
justice" movement among working class and ethnic minorities has
launched a powerful and influential critique of inequities in the
distribution of what are predominantly corporate environmental
impacts.1'
Like business historians, environmental historians are also reexamining their field's existing paradigms, seeking to recast the
boundaries of their discipline. Growing frustrated with environmental history's longstanding focus on farms, forests and wilderness and fortified by a dawning recognition of the much wider
lo
Robert Costanza, An Introduction to Ecological Economics (Boca Raton, Fla., 1997);
Malte Michael Faber, Ecological Economics: Concepts and Methods (Cheltenham, U.K..
1996); A.-M. Jansen, ed., Investing in Natural Capital: The Ecological Economics Approach
to Sustainability (Washington, D.C., 1994); Robert Costanza, ed.. Ecological Economics: The
Science and Management of Sustainability (New York, 1991); Thomas Prugh et. al., Natural
Capital and Human Economic Survival (Solomons, Md., 1995); Herman Daly, "On Economics as a Life Science," journal of Political Economy 76 (1968): 392-406. These approaches
mostly extend the resource economics developed by Harold Hoteling ("The Economics of
Exhaustible Resources, "journal of Political Economy 39 [1939]: 137ff.) and others to a growing range of natural, heretofore unpriced entities defined by ecologists and other natural scientists. Economists interested in this endeavor founded the International Society for Ecological Economics in the early 1990s.
16
Michael Kraft and Norman Vig, "Environmental Policy from the 1970's to tlie 2.990's," in
Kraft and Vid, eds.. Environmental Policy in the 1990s (Washington, D.C, 1994); Harnessing
Market Forces to Protect Our Environment: Initiatives for the Neic President, A Public Policy Study
Sponsored by Senator Timothy E. Wirth, Colorado, and Senator joint Heinz, Pennsylvania (Washington, D.C, 1988): see also the critical commentary by Samuel Hays in "The Future of Environmental Regulation," in Explorations in Environmental History (Pittsburgh, 1998), 109-114.
'' Robert Gottlieb, Forcing the Spring: The Transformation of the American Environmental
Movement (Washington, D.C, 1993); Laura Pulido, Envinmmentalisin ami Economic Justice:
Two Chicano Struggles in the Southwest (Tucson, 1996); Eileen Maura McGurty, "From NIMBY to Civil Rights: The Origins of the Environmental Justice Movement," Environmental History 2 (1997): 301-23; Temma Kaplan, Crazy for Denwcracy: Women's Grassroots Movements in
the U.S. and South Africa (New York, 1996)!
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The Nature of the Firm 1583
scope of the "natural," many environmental historians have begun
to gravitate away from the study of pristine environments toward
those more thoroughly and unmistakably shaped by human hands.
Environmental historians, especially younger ones, have explored
a wide variety of subjects beyond the field's original purview—
including the environmental dimensions of industrial development.18
In short, at the start of the new millenium, both business and
environmental historians have arrived the same juncture: they've
discovered the need for careful and exacting scrutiny of the firm's
environmental relations. The first group stands poised to inject
nature into business history, while the second is ready to inject
business into environmental history. An unprecedented opportunity for collaboration now presents itself. After decades of separation, business historians can join with environmental historians
in considering the role and place of nature in business development. We find this possibility extremely exciting and important.
Because we are writing for the Business History Review, this
essay primarily addresses this opportunity from the perspective of
business historians. But we also hope that environmental historians will hear our message about the need for and value of collaboration.
In our view, research into the environmental dimensions of
business offers just as much potential for business historians as
the cultural dimensions whose study Philip Scranton, Roger
Horowitz, and others urged upon us at the recent Hagley conference on the "Future of Business History." 19 Moreover, we
believe that study of these two aspects of business life should be
closely connected. Like scholars in a variety of culturallyinclined fields who have recently endeavored to bring "nature"
or "materiality" itself more into their scope of analysis, we think
that efforts to understand the environmental dimensions of
human activity must inevitably engage the realm of the symbolic.
From anthropology to science studies, movements are underway
to break down the nature/culture divide that has structured
14
William Cronon's award winning Nature's Metropolis: Chicago and the Great West
(New York, 1991) marked the emergence of this new attitude. For evidence of its spread and
growing influence, see Char Miller and Hal Rothman, eds., Out of the Woods: Essays in Environmental History (Pittsburgh, 1997) and William Cronon, ed., Uncommon Ground: Rethinking the Human Place in Nature (New York, 1995).
19
Philip Scranton and Roger Horomtz, '"The Future of Business History': An Introduction," Business and Economic History 26 (1997): 3-4.
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Christine Meisner Rosen and Christopher C. Sellers 1584
inquiry in these and other disciplines for so long. New coinages
like "nature-culture" aim to capture this sense of interconnection, to draw attention to the idea that you can't study one without broaching the other. Inquiries into culture lead into
questions about nature, and vice versa.20 To realize the fullest
and deepest potential of this revisionist moment in our field, we
must extend analysis of the environmental history of business to
the symbolic as well as the material components of business's
environmental relations.
The remainder of our introduction to this special issue of the Business
History Review on "Business and the Environment" sketches out the rudiments for an "ecocultural" approach to our discipline. We offer a few pointers and prescriptions to guide those interested in working at this intersection
of fields and questions. We challenge our readers to develop their own
agendas as well. Our main purpose is to foster new ways of re-connecting
our histories of the firm with narratives about both the natural and cultural
worlds within which firms are embedded.
A first step in opening the borderlands between environmental and
business history is to acknowledge that we have, as a discipline, tended to
treat industrial impacts like pollution as well as most other environmental
dimensions of business activity as if they were what economists call "externalities." Externalities are "social costs" or "spill-over effects" of economic
activity, which may impact buyers and sellers as well as bystanders in a given
economic transaction, but are not priced into the transaction itself. As such,
they are distinct from the conventional economic costs internalized by the
price mechanism of the market system in which business managers operate.
And as such, they have long been widely accepted as naturally outside or
beyond the scope of the businessman's economic calculations, unless artificially internalized into the market by regulation.
We do well to recall that the externality concept itself is only one
latter-day tool by which economists have struggled to comprehend how
markets handle or mishandle environmental questions. Classical econ20
"Nature-culture" is from Bruno Latour, We Have Never Been Modern (Cambridge,
U.K., 1993), 7, 96, 105-09. Other representatives of a vast emerging literature include, in science history, Mikolas Teich, Roy Porter, and Bo Gustaffson, Nature and Society in Historical
Context (Cambridge, U.K., 1997); in anthropology, Klaus Seeland, ed., Nature Is Culture: Indigenous Knowledge and Socio-Cultural Aspects of Trees and Forests in Non-European Cultures (London, 1997); Philippe Descola and Gisli Palsson, eds., Nature and Society: Anthropological Perspectives (London, 1996); in sociology, Raymond Murphy, Sociology and Nature:
Social Action in Context, (Boulder, Colo., 1997); and in cultural studies, Tom Jagtenberg,
Eco-impacts and the Greening of Postmodernity: New Maps for Communication Studies,
Cultural Studies, and Sociology (Thousand Oaks, Calif, 1997). For environmental history,
see William Cronon, ed., Uncommon Ground: Rethinking the Human Place in Nature (New
York, 1995).
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The Nature of the Firm 1585
omists from Adam Smith to David Ricardo devoted considerable attention to the supply and value of arable land but neglected other natural
resources as well as what later became known as "environmental amenities." Later, not least through the influence of Karl Marx's labor theory of value, an emphasis on capital and labor as the most important
factors in production increasingly submerged questions about
resources and supply in the work of many economists. With the neoclassical revolution, Alfred Marshall and A.C. Pigou opened the door to
the externality concept through arguments that production gave rise to
unpaid "social costs," costs imposed both on the transacting parties and
the rest of society that were not internalized in prices.21 Only after
World War II, however, did economists adapt this notion to pollution
and other kinds of environmental degradation, through coinage of the
"externality" concept and through innovations in resource economics.
Much of this flowering of economic thought about the environment,
from Ronald Coase to Kenneth Arrow and Paul Portney, has had a
strong public policy orientation. It has focused on theorizing about
how society structures legal rules and regulatory policies to control the
allocation of natural resources and internalize negative environmental
externalities. A great deal of attention has also been given to developing methods for more accurately quantifying the costs and benefits of
internalizing externalities. ~
We do not mean to contradict this important body of economic
work by suggesting that there is a problem when business historians
treat the environment as an "externality" in their research. We recognize (as we assume most business historians do) the importance of the
externality concept for business history. Under many conditions,
industrial pollution and other harmful environmental impacts of business do indeed generate "social costs" that are not reflected in the
prices charged or paid. Like imperfect information, public goods, and
"' See Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London, 1776); David Ricardo, On the Principles of Political Economy and Taxation (London,
1817); Karl Marx, Capital vol. 1 (1872; edition used, New York, 1967), 177-98; A. Marshall,
Principles of Economics (London, 1890); A.C. Pigou, The Economics of Welfare (London,
1920). Thanks to Bradley Bateman for sharing his unpublished manuscript on "Supply" that
sketches out this history'.
~ For instance, Kenneth Arrow, "Dynamic Aspects of Achieving Optimal Allocation of
Resources," Econometrica 20 (1952): 86; Idem., "The Future and the Present in Economic
Life," Economic Inquiry 16 (1978): 157ff.; R.H. Coase, "The Problem of Social Cost," Journal of Laic and Economics 3 (1960): Iff.; Robert Solow, "On the Intergenerational Allocation
of Natural Resources," Scandanavian Journal of Economics 88 (1986): 141f£; John Krutilla
and Anthony Fischer, The Economics of Natural Environments (Baltimore, 1975); Paul Portney and Ruth Haas, eds., Current Issues in Natural Resource Policy (Washington, D.C.,
1982); Kenneth Arrow, et al., Benefit-Cost Analysis in Environmental, Health, and Safety
Regulation (Washington, D.C., 1996).
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Christine Meisner Rosen and Christopher C. Sellers 1586
monopoly power, environmental externalities have been imperfections
in the market system that have prevented ostensibly "rational" economic decisions from leading to efficient outcomes. This often distorted the market, preventing it from optimizing economic welfare in
the neoclassical sense. As a result, over the long run, in the absence of
effective regulation, even the biggest, most successful firms could not
operate efficiently in the welfare optimizing way envisioned by neoclassical economists.23
Rather, our complaint is that business historians have tended to
treat the environmental dimensions of business development—questions of "natural" goods and supplies as well as pollution and other
harms—as if they were externalities to the enterprise of business history itself. We have taken the "externality" of environmental issues for
granted, treating them as if they were spillover effects of industrial
activity to which we need not pay attention. We have fallen into the
trap of assuming that environmental factors and problems were extraneous to the development of business institutions and managerial decision making—even when this was not the case.
The purpose of this special issue is to challenge these
assumptions about the externality of the natural environment to
business history. Instead of continuing in the current mainstream path, we want to persuade our fellow historians to start
asking explicit questions about the role of environmental factors in industrial development and corporate evolution in different places and times. More open-minded and empirical
research will allow us to better determine how nature actually
figured into what business managers did: how managers did or
did not handle their firms' extraction and transformation of natural resources; how nature's openings and impositions shaped
their strategies and organizational choices; and what impacts
their activities had on their human and nonhuman physical surroundings.
Within environmental history, the "tragedy of the commons"
model popularized by Garrett Hardin has similarly steered environmental historians away from more penetrating empirical
research into the history of the modern firm. Writing near the
23
For a detailed overview of externalities and other market imperfections and their relevance to market performance and public policy, see Jeffrey M. Perloff, Microeconomics
(Reading, Mass., 1999), 369-459, 655-725. Forabrief summary of types of market failure and
regulatory responses to them see: James M. Carman and Robert G. Harris, "The Political
Economy of Regulation: An Analysis of Market Failure" and "The Political Economy of Regulation: Analysis of Regulator)' Responses," in S. Prakash Sethi and Cecilia M. Falbe, eds.,
Business and Society: Dimensions of Conflict and Cooperation (Lexington, 1987), 177-213.
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The Nature of the Firm 1587
height of the post-World War II environmental movement, biologist Hardin drew on William Forster Lloyd's writings about the
enclosure movement in eighteenth-century England for a model
of how self-interested extractive activity culminates in environmental devastation. The "tragedy of the commons" posited a community of sheep holders composed entirely of atomized economic
actors who were incapable of incorporating the externality effects
of their actions into their economic calculations. The private market gave the sheep owners every reason to use the commonly
grazed pasture as intensively as possible. It gave them no economic incentive to curb their herd's grazing so that the pasturelands would be conserved.
This neoclassical conception, based on experience prior to
the modern firm's emergence, has become "central to environmental studies" and to the analysis of many environmental historians. 24 Even when questioning its universality, however,
environmental historians have too quickly assumed its validity
for corporate motivations and behavior. They have asked very
few questions about how business managers actually managed
their firms' environmental impacts in a given time and place.
In contrast, what we have discovered in our own historical
research, and what we see in the articles we have reviewed for this special issue, is that when environmental impacts like pollution do come to
be perceived as "problems," they do not stay "external" to economic
actors for long. Instead they stir increasing deliberations and engagements among those concerned, including business managers. The
environment is thereby brought within the cultural sphere of those
who manage business organizations. It influences their thoughts and
actions, whether as managerial decision-makers within the firm or as
civic actors beyond it.
Like other members of society, business managers do not line up
in a monolithic fashion in opposition to pollution control and other
-4 Garrett Hardin, "The Tragedy of the Commons," Science 162 (1968): 1243-48; quote
comes from T. O'Riordan and R.K. Turner, An Annotated Reader in Environmental Planning
and Management (Oxford, U.K., 1983); for the general "commons" literature, see Garrett
Hardin and John Baden, eds., Managing the Commons (San Francisco, Calif, 1977); Bonnie
J. Mcay and James Aeheson, eds., The Question of the Commons: The Culture and Ecology of
Communal Resources (Tucson, Ariz., 1987). The best-known explicit adaptation of this model to environmental history is by Arthur McEvoy, The Fisherman's Problem: Ecology and Law
in the California Fisheries, 1850-1980 (Cambridge, U.K., 1986); also Marvin Soroos, "The International Commons: A Historical Perspective," Environmental Review 12 (1988): 1-22;
Louis Warren, The Hunter's Game; Poachers and Conservationists in Twentieth-Century
America (New Haven, Conn., 1997). Much environmental history has been guided less explicitly by this model.
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Christine Meisner Rosen and Christopher C. Sellers 1588
forms of environmental protection. As one of us, Christine Meisner
Rosen, showed in an article in this journal, a group of Chicago businessmen near the turn of the century became involved in anti-smoke
campaigns. They took it upon themselves to clean up their own as well
as their fellow business owners' smoke stacks, some of whom strongly
opposed their efforts.20 However "social" or "external" the cost of
smoke pollution may have been in theory, many business people saw
their own advocacy of smoke reform as pivotal to maintaining their reputation both among their fellows and among actual or potential customers in Chicago and elsewhere. Theirs was an "altruism" with a
steady eye to the bottom line.
Moreover, once we move to consider the entire range of business
dealings with material throughput and its impacts, it becomes clear
that what can seem "external" to business calculations in one era can
become a carefully figured entry on corporate balance sheets in
another. In his book, Hazards of the Job, Christopher Sellers showed
how industrial diseases arising among workers in lead factories and
mines remained largely external to the economic calculations as well as
the awareness of American owners and managers in the late nineteenth
century. Once a hue and cry were raised within and without the factory, however, and especially once an industrial hygiene expertise and a
workers' compensation system began to hold firms accountable for
some of these costs, companies started to pay experts to assess and
remedy these "problems."26
In sum, rather than writing off business' environmental relations as
"externalities," we propose that business historians treat the environmental dependencies and impacts of business just as they have treated
market conditions and labor relations. We urge our colleagues in business and environmental history alike to investigate the ways in which
people in industry have viewed, used, and otherwise managed natural
resources and allowed, palliated, or ignored the environmental consequences. Take a look at how managers have responded to the existing
possibilities and constraints of the physical world, as well as those
posed by markets, economics, technologies, social and governmental
demands. Test the hypothesis that managers in specific industries
knowingly managed their firms' environmental impacts in ways that
2
' Christine Meisner Rosen, "Businessmen Against Pollution in Late Nineteenth Century
Chicago," Business History Review 71 (Fall 1995): 351-397. See also critiques of the commons model such as those by Bonnie J. McCay ("The Ocean Commons and Community."
Dalhousie Review 74 ([1994-95]: 311-338), Arthur McEvoy, and Louis Warren which call for
"a more anthropological approach" (quote from McCay, 316).
2h
Christopher Sellers, Hazards of the Job: From Industrial Disease to Environmental
Health Science (Chapel Hill, N.C., 1997).
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The Nature of the Firm 1589
harmed or benefited natural ecosystems or human health. Consider
whether firms reduced pollution and mitigated other environmental
problems, not only in reaction to court decisions and regulation, but
also in order to maximize profits or to enhance the personal goals of
individual managers.
For a starting point, we take our cue from the integrative vision of
the young Karl Marx: " . . . the celebrated 'unity of man with nature'
has always existed in industry, just like the 'struggle' of man with nature
.. . "2l As Richard White suggests in his history of the Columbia River,
The Organic Machine, this unity as well as this struggle are encompassed in the notion of "work" performed on "nature."28 All business
activities involve the direct or indirect manipulation of materials and
energy derived from the natural world. This involvement can be as
glaringly obvious as the clear-cutting of a forest, or as subtle and covert
as the nearly invisible electronic sinews grounding global hedge funds
and the vast and growing commerce of the Internet. Whatever the
level of visibility, an environmental history of business must keep an
eye on the "natural" origins of the physical stuff used in economic production. It must trace the environmental metamorphoses and impacts
that result, as well as the operative notions of "nature" and the "natural" that guide and constrain such transformations. Seen in this light,
questions about the environment are not peripheral but central to business history. They are a basic dimension of what business is about.
Industrial ecologists have laid out a useful framework for
conceptualizing this unity between business and nature. 29 They
have developed a theoretical model of an "industrial ecosystem"
that describes the flows of material and energy that connect
business with the natural world. Materials and energy flow from
the natural world into the industrial system and back out again in
a continuous and never ending feedback loop. Stages in these
currents divide roughly into three: one, the transformations by
2|
Karl Marx, The German Ideology: Including Theses on Feuerbach and Introduction to
the Critique of Political Economy (edition used; Amherst, N.Y., 1998), 170.
28
Richard White, The Organic Machine: The Remaking of the Columbia River (New York,
1995).
29
The following conceptualization of materials and energy flows is derived from work being done in the emerging field of "industrial ecology." See citations at n. 14. For further discussion of the concept see: Robert A. Frosch and Nicholas E. Gallopoulos, "Strategies for
Manufacturing," Readings from Scientific American: Managing Planet Earth (New York,
1990), 18-26; T.E. Graedel, B.R. Allenby, and P.B. Linhard, "Implementing Industrial Ecology," IEEE Technology and Society Magazine (Spring, 1993): 18-26; and Hardin Tibbs, "Industrial Ecology: An Environmental Agenda for Industry," Arthur D. Little, Inc. (1991). For
further development of the ways in which the industrial ecology concept can be fruitfully applied in business history see Rosen, "Industrial Ecology and the Greening of Business History-"
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Christine Meisner Rosen and Christopher C. Sellers 1590
which natural resources are extracted from the earth and converted into raw materials and mechanical energy; two, the manufacturing operations by which these material and energy flows
are worked and reworked into useable or saleable products; and
three, those processes and practices by which manufactured
products come to be distributed to and used and disposed by
consumers.
All three of these stages in the flow of materials and energy
between business and the natural world generate "wastes" that
can become "pollution." Though the content and definition of
these terms may vary drastically across time and place, our articles show how resource extraction, manufacture, and consumption all eventually give rise to excess or residual materials, from
the brine of oil wells and the smoke of industrial boilers to peeling house paint. Treated or untreated, these inevitable discards
return directly to the natural world, where they eventually decay
or degrade over time—unless managers or consumers shunt
them back into the production and consumption loop by reprocessing and reusing them. Our articles show how these wastes
could have powerful consequences that managers could not
ignore.
Business managers and institutions play an active role in
directing the flow of energy, materials, and wastes, through all
the stages of production and consumption in the earth's industrial ecosystem. In so doing, they deeply influence how the rest
of society emits waste and interacts with and impacts on the natural world. Most business historians are quite familiar with the
effects that mines and factories have had on the air people
breathe, the water they drink, and the physical landscape in
which they live, work, raise families, and engage in recreational
activities, even if these subjects are not often addressed in their
historical work. What is important about the industrial ecology
concept is that it directs attention to how flows of energy, material, and waste within industry affect the world beyond the factory and office when they move into the realm of the society that
consumes the fruits of industrial production. As one of our articles indicates, this outflow could bring toxic chemicals directly
into the homes and schools of ordinary Americans. It has also
led to animal and plant extinctions and other less drastic forms of
natural eco-svstem change and may be causing global climate
change. Industrial ecology points toward management's role in
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The Nature of the Firm 1591
fostering the consumption that drives such broad environmental
change, as an important facet of the historical relationship
between business and the environment.
At the same time, we also need to recognize where, for our
purposes, the analytical model distilled by industrial ecologists
falls short. A theory developed by engineers, industrial ecology
focuses heavily on quantitatively analyzing material and energy
flows as they move through industrial ecosystems. It also
devotes a great deal of attention to the development of more
environmentally benign product designs and manufacturing systems and the creation of waste exchanges and other engineering
systems, in an effort to close material and energy flows to bring
them more in line with the closed loop flows characteristic of
natural biological ecosystems. As yet, however, it offers only the
crudest of tools for grappling with the symbolic or strategic
dimensions of managerial decisions, especially those dealing with
marketing, advertising, public relations, and even philanthropy,
which may sustain or alter the flow of commodities past the factory or office door. Nor does it adequately contend with how
changing understandings and values may alter decisions about
the streaming of energy or material within the workplace as well
as without. Not least of its limitations, it gives minimal attention
to how market factors shape the managerial thoughts and actions
that direct the flow of energy and materials through industrial
ecosystems. In contrast, we've seen fit to craft an approach to
business history that is at once ecological and economic and cultural.
No matter what aspect of business's co-evolution with the
natural world a business historian may choose to tackle, he or she
will confront a wide array of questions and challenges. In soliciting and editing the articles for this special issue, we have settled
upon several themes and guidelines that we feel are critical to an
ecocultural approach to business history.
One of the most important themes is technology. From
flaked rocks and other simple hand tools, to water, steam, and
electric powered machinery and the modern computer, technology has shaped economic production in a myriad of ways since
ancient times. Many of the most important stories waiting to be
told in the ecocultural history of business pivot around some
technological change, whether in energy sources, shop floor processes, or extractive machinery. As the articles assembled here
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Christine Meisner Rosen and Christopher C. Sellers 1592
show, technology has served as an instrument both by which
business managers exploited and/or degraded the environment
and as a tool by which they sought to rectify the damage. We
must address both sides of this historical potential.
A second theme is the role of the market, a topic as central to
an ecocultural business history as it is to the other more conventional aspects of our discipline. The market has shaped business's interactions with the natural environment in truly
powerful ways. It is, as we all know, the primary engine of business's development and so a major determinant of business's
impact on water, air, land, climate, and biological ecosystems.
With all its imperfections (including environmental externalities), it set the prices that determined when and where managers
chose invest in the technologies that allowed them to extract raw
materials from the earth and process them into manufactured
goods. It was the mechanism through which consumers discovered the prices of those goods and purchased them. It provided
the signals that enabled managers to decide whether it made
economic sense to invest in technologies to abate pollution and
other environmental harms.
The market did not operate in a vacuum, however. A third theme
with which ecocultural business historians must grapple is the role of
the government in shaping the interactions between business and the
natural world. We cannot address the role that the marketplace played
as a driver, mediator and shaper of the material flows of materials
through the industrial ecosystem without studying the role of the state.
Through its allocation of property rights, its adjudication of court cases,
its regulation of economic activity, its ownership of natural resources,
its decisions to go to war, and other activities, government has played a
crucial role in structuring the institutions that define the market signals
to which business managers responded. It has also imposed rules and
requirements on business that sometimes forced managers to take
actions that conflicted with or changed those signals. Government figures prominently in all of the articles assembled here, not just as an
actual or potential environmental regulator, but as an advisor to industry, the creator of demand for manufactured goods, and a shaper of values and attitudes.
While the ecocultural history of business shares these three
themes with other approaches, its distinctiveness resides in the
guidelines by which it addresses them. First, the ecocultural
perspective in business history consistently focuses on the culDownloaded from https:/www.cambridge.org/core. IP address: 88.99.165.207, on 16 Jun 2017 at 09:40:31, subject to the
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The Nature of the Firm 1593
tural shaping of the interface between business and the environment. " C u l t u r e " here includes the ideas, values, and
assumptions of business managers regarding what is good, bad,
technically and economically feasible with regard to environmental issues—as well as those of environmentalists, government
regulators, judges, scientists and the public as a whole. For
instance, to understand the impact of either markets or the state
in the history of environmental management, it is necessary that
we examine the critical role that managerial (and non-managerial) perceptions of cost and "interest" played in the economics
and politics of pollution control. We must not assume that these
ideas are necessarily objective measures of reality. Our historical actors may have believed that their ideas accurately reflected
economic, political, technological, or ecological reality, but
notions about economic and political self-interest have proven at
least as mutable as ideas about the workings of nature. Several
of our authors offer glimpses of how managerial perceptions of
their industry's economic interest in pollution control evolved as
market conditions, production and control technologies, scientific knowledge, and the law and regulatory policies developed.
As business historians, it is important that we examine the
environmental impacts of culture at the level of the individual
firm or industry, at least to the extent the primary sources permit
this. We must be sensitive to the fact that individual managers at
different companies typically exhibited a range of attitudes
toward environmental issues. Management attitudes and practices also varied across different industries. We need to try to
understand the reasons for these differences as well analyze
their consequences—for the development of business, as well as
the evolution of the natural world.
We must also explore the values and experiences of ordinary
factory workers. Direct contact with the raw materials and
machinery of production often made workers the first witnesses
to the environmental consequences of managerial decisions.
From their ranks came the earliest victims of industrial materials
later decried as environmental toxins, like lead paint and pesticides. Communities of working families have historically born
witness to their suffering as well as to the worst environmental
disasters wrought by corporations, from Donora to Love Canal to
Bhopal. Depending on era and topic, the ecocultural historian of
business may find workers' experiences as revealing and imporDownloaded from https:/www.cambridge.org/core. IP address: 88.99.165.207, on 16 Jun 2017 at 09:40:31, subject to the
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Christine Meisner Rosen and Christopher C. Sellers 1594
tant as those of the managers who direct their labor, a valuable
counterpoint from which to evaluate the significance of the attitudes and values expressed by high ranking executives and other
business managers and professionals.
In addition to these micro-level aspects of business culture, however, we
must address more macro cultural dimensions of the business-environment
interface. Broader societal and national cultural contexts shaped the values
and attitudes that managers and workers and others brought to the subject of
business's use and abuse of the natural world. One of the most surprising
discoveries we made in the course of putting this special issue together is the
powerful role that national cultures played in how business people and government regulators made sense of and dealt with pollution and other environmental problems. Further grappling with this dynamic requires that
American business historians pay more attention to work being done by
business historians in Europe, Asia, and elsewhere. While one of the most
exciting contributions of the Chandlerian business historians has been the
world-wide similarities they have documented in the evolution of corporate
organization, the ecocultural perspective may better enable us to understand
how, over time, differences in national cultures led to different managerial
experiences even in similarly organized firms.
Throughout, another fundamental guideline for ecocultural
inquiries into business history must be to maintain a steady
attentiveness to the physical world with which business people
and their enterprises interact. One of our most important tasks
is to incorporate analysis of the material world into our study of
the evolution of the firm. We need to explore how business managers responded to the opportunities as well as the constraints
offered up by their material surroundings. Environmental history has deep roots in historical approaches that attribute agency
to influences and forces beyond the social or cultural activities of
humanity—to climate, geography, pests, disease vectors and the
like. Business historians can profit by following suit. We need
recognize the agency of the physical world, even as we attend to
the agency of business. This is to say that we need to address
both the matter of how business has been shaped by the physical
world and the matter of how managers have in their turn managed that interaction. From the vantagepoint of this dual focus,
business historians can provide a unique perspective on one of
environmental history's chief concerns: the dialectical, interactive dance between human and non-human agency in history.
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The Nature of the Firm 1595
As our authors will testify, culling and interpreting the evidence to
write nature into business history poses a variety of methodological difficulties. Society, culture, even markets arise out of the fabric of human
talk, evidence of which we can often obtain through documentary
records. Alas, however, many of the natural world's physical actors and
influences, from smoke or lead dust to perturbations of climate, register
fitfully in the documentary leavings on which historians must rely.
Today's scientific accounts of environmental agents and dynamics
can help us overcome this hurdle, aiding our understanding of the
environmental conditions to which past business managers (and government regulators, and ordinary citizens) responded. We can make
use of contemporary research bearing upon those aspects of nature
about which we plan to write, whether in biology, chemistry, physics,
or other natural sciences. Applying modern science to the past presents further dilemmas, however, since the knowledge and awareness
in other times and places often proves so different from today's claims.
Fortunately, those more Western and industrialized societies which
environmental historians of business will likely study offer at least some
precursor body of written knowledge on most environmental dynamics
and effects we will choose to investigate. Often it has been compiled
by some earlier group of scientific professionals.
We nonetheless think it necessary for ecocultural historians of
business to contend with the culturally rooted dimensions of knowledge, rather than relying entirely upon the "truth" of modern science
to explain everything. We also need to make sense of the often dramatic differences between past and present claims about the physical
world, rather than simply dismissing the old assumptions and understandings as incorrect. Economists' notions of "information" and
"uncertainty," while they provide some tools for dealing with such
questions, can only go so far.30 Taking our cue from the work of anthropologists and cultural studies of science, we urge business historians to
piece together how nature and its operations looked to past business
people and their experts.31 However mistaken today's science may ini30
See for instance Kenneth Arrow, "Informational Structure of the Firm," American Economic Review 75 (1985): 303ff.; Idem., "Exposition of the Theory of Choice under Uncertainty," Synthesc 16 (1966): 253ff.
31
Path-breaking varieties of this approach are Bruno Latour and Steve Woolgar, Laboratory Life: The Social Construction of Scientific Facts (Beverly Hills, Calif, 1979); and Steve
Shapin and Simon Schaffer, Leviathan and the Air-Pump: Hohhes, Boyles, and the Experimental Life (Princeton, 1985). For a sense of the range of approaches that then evolved in
science studies, see Andrew Pickering, ed., Science as Practice and Culture (Chicago, 1992).
For culturalist perspectives on knowledges of special relevance to business history; see
Michael Power, ed., Accounting and Science; Natural Inquiry and Commercial Reason (Cambridge, U.K., 1994).
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Christine Meisner Rosen and Christopher C. Sellers 1596
tially make business people in other times and places appear, ecocultural historians may find that the past natural knowledge or expertise
on which their business subjects relied had its own internal sense and
coherence. Understanding how different groups socially and culturally
constructed nature in the past—what they believed certain rocks were
and could become, what harms they thought a metal to cause—will
strengthen our explanations of past business behavior. For while business decisions had objective impacts on the physical world that today's
science may better comprehend, managers often made those decisions
quite rationally in the context of their convictions about that world. We
need to take seriously both past and present knowledge about nature in
order more fully to fathom the history of the business/environment
interface.
This brief list of desiderata for an ecocultural approach to
business history is far from exhaustive. It should nevertheless be
enough to give our readers a sense of where we'd like to see the
field go, and how to get there. Of course, the greatest challenges come as we pursue more than just a couple of these
themes and guidelines and seek to weave them together into
coherent and illuminating narratives.
We are pleased to present some excellent articles that we
believe have met these challenges. Four pieces can only suggest
the plenitude of topics along the interface between environmental and business history, but these cover a great deal of ground.
Their emphasis, like most of the papers sent to us, falls on how
business managers themselves dealt with the more harmful environmental dimensions of their operations, especially industrial
pollution and its control. Each of the four illustrates important
aspects of what it means to write business history from an ecocultural perspective.
Hugh Gorman's article, "Efficiency, Environmental Quality,
and Oil Field Brines: The Success and Failure of Pollution Control by Self-Regulation," concerns the management of oil field
brines, a form of water pollution associated with first phase in
the flow of materials through the industrial ecosystem, resource
extraction. Gorman examines the methods by which petroleum
producers disposed of the salt-water wastes generated by the
drilling of oil wells between 1920 and 1970. His article provides
a clear illustration of the two edged nature of industrial technological innovation. Gorman explains both how the development
of technologies for extracting oil form the earth polluted water in
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The Nature of the Firm 1597
the American Southwest, and how oil companies developed technologies for abating that pollution. He also provides insight into
the intertwined way in which government and the market place
affected management decision making in the area of industrial
pollution abatement. Courts and government regulators pushed
the industry to develop methods for controlling brine pollution
from the 1920s on. Significantly, however, the more advanced
forms of abatement went hand in hand with the more efficient
exploitation of oil resources, at least until the 1950s and 1960s
when the goal of increasing the efficiency of production began to
diverge from the goal of protecting the environment.
Frank Uekoetter's article, "Divergent Responses to Identical
Problems: Business and the Smoke Nuisance in Germany and
the United States, 1880-1917," deals with questions relating to
the pollution generated by the burning of coal as fuel for industrial production and the heating of factories, offices, stores, and
homes—a problem associated with the second stage of material
flows through industrial eco-system. Uekoetter examines efforts
by industry and government regulators in Germany and the U.S.
to deal with industrial smoke pollution during the late nineteenth and early twentieth centuries. Uekoetter documents surprising differences between the German and American
responses to the coal smoke problem. The differences involved
business attitudes toward smoke abatement and regulation as
well the methods used by government regulators to impose control on smoke polluters. His essay suggests that distinctive
national cultures and political institutions played a critically
important role in how business, government, and the broader
society construed and defined the problem of pollution and its
possible solutions.
The article by David Stradling and Joel Tarr, "Environmental
Activism, Locomotive Smoke, and the Corporate Response: The Case
of the Pennsylvania Railroad and Chicago Smoke Control," also looks
at the problem of controlling industrial smoke pollution in the early
twentieth century. In contrast to Uekoetter, Stradling and Tarr examine this subject from the perspective of a single corporation, the Pennsylvania Railroad. By focusing on a single firm, this article shows how
Chandlerian institutional history can illuminate the interface between
business and the environment. Using materials from the Pennsylvania
Railroad's corporate archives, Stradling and Tarr analyze the Pennsylvania's organizational and strategic responses to the efforts of smoke
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Christine Meisner Rosen and Christopher C. Sellers I 598
reformers to use regulation to force the firm to reduce its smoke. They
explore how management tried to appease regulators through technological retrofitting of their locomotives, fuel substitution, and employee
training, documenting its efforts to balance responsiveness to regulation and public protest with cost minimization in the face of fluctuations in the economy as well as public and official interest in the smoke
problem. They also describe the methods management used to lobby
reformers and city government official to stave off regulations that
would have forced the company to take more extreme steps to reduce
its smoke by electrifying its facilities.
Christian Warren's article, "Toxic Purity: The Progressive
Era Origins of America's Lead Paint Poisoning Epidemic," shifts
the focus of analysis back to a more macroscopic level. It concerns the management of toxic materials at both the production
and consumption stages of the industrial materials flows process.
Warren explains why the U.S. Congress debated but never
passed laws to regulate the use of lead in paint during the Progressive Era. This failure had consequences not only for workers
in lead paint factories, but also for consumers and for the whole
paint industry's technology of production, product design, and
industry structure. It also impacted the consumers of paint.
Like Uekoetter's article, Warren's sheds light on the role of culture in environmental regulation. In particular, it opens a window on how values and widespread popular assumptions about
the "nature" of things influenced business approaches to environmental problems and shaped the outcomes of environmental
policy debates. The essay also makes a new contribution to the
debate over business power and regulatory failure that so fascinated radical revisionist historians during the 1960's and 70's. 32
Warren shows that what sealed the success of the American lead
industry and its allies in turning back the legislative ban on lead
paint was not so much the lead paint companies' political power
vis a vis the newer non-leaded paint producers, but a common
and widely accepted fabric of knowledge, perceptions, and values shared by the entire paint industry as well as many public
health reformers.
In sum, the articles in this special issue have a great deal to
tell us about how business managers coped with the pollution
:il
For a critique of business historians' more recent neglect of "power" questions, see
Louis Galambos, "What Makes Us Think We Can Put Business Back into American History?"
Business and Economic History 20 (1991): esp. 9-10.
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The Nature of the Finn 1599
generated by different materials flows, from oil and coal to lead.
Managers reacted to a wide variety of influences in determining
and then acting upon what was in their interest: to markets; to
available technologies; to government policies; as well as to personal as well as more broadly held attitudes about such issues as
the nature of product purity, the right of a corporation to operate in profit maximizing ways without interference from regulators, and the obligation of managers to respond in forthcoming
ways to the public's objections to environmental degredation.
These essays put to rest any assumption that it is possible to
confine business's historical role and place to a traditional focus
on the internal organization of the firm. Like the smoke that
finds its way outdoors, like the lead that becomes coloring material for wall paint, like the oil brines that seep through the
ground, each of these stories draws attention to the connections
between what managers do with regard to production, marketing, and other internal business functions and people, events,
and material and biological conditions in the world beyond.
At the same time, the articles also make clear that there is a
real place for the history of the firm in environmental history.
All of our articles trace industry's environmental impacts back to
decisions and events inside business: to the management and
technology of production, marketing, procurement, and other
practices of business people qua business people. Gorman's
examination of oil brine disposal leads him into, among other
things, analysis of corporate strategies for minimizing the cost
and maximizing the efficiency of oil extraction and for managing
risks associated with pollution litigation. On questions of industrial air pollution, Uekoetter delves into the technology and efficiency of coal based energy in industry. Stradling and Tarr
tackle the energy economics of converting from coal to electric
power, as they explore how one railroad's managers responded to
public pressures to cut back on smoke. Even Warren, in explaining Congress's early failure to regulate the health hazard of lead
in paint, explores conditions in industry. He examines not only
the political power and lobbying activities of the leaders of the
lead paint industry, but also the organization of the paint industry and the technology of making lead paint. He finds that managers' ideas about the lead hazard, based on their experience
with factory workers, blinded them to the health risks lead paint
posed to people outside the factory.
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Christine Meisner Rosen and Christopher C. Sellers 1600
All of our authors effectively integrate histories of business's environmental relations with the mainstream concerns of business historians. They also seriously contend with many under-examined cultural
dimensions of business practice. Taken together, these four articles
illustrate the range and value of an ecocultural perspective for business
historians. We believe such a perspective can both encompass and
deepen some of the most provocative recent visions for a new business
history. Its distinctively historicist materialism can serve as a basis for
weaving business together with its material and symbolic environments
in a seamless web. Not only can this new approach help us bring the
complex physical, cultural, managerial, technological, and economic
connections between business and the environment into better focus;
it also gives us another route through which we can explore the relationships between business and nationality, business and politics, and
business and public policy.
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