PART I
THE CORPORATE CENTURY IN AMERICA

THE 20TH CENTURY was the corporate century in America. The American economy became “corporatized” around the turn of the century, and for the next several decades corporations were the most important institutions in the economy, providing goods and services, jobs, and profits for investors. Yet corporations look very different around the world compared to the United States, reflecting the politics and history of their home countries. Much like “breakfast,” in which the same word refers to very different things in different cultures, “corporation” means something quite different in the US, Germany, Korea, or China. For much of the past century, public corporations, with shares traded on stock markets, have been far more important to the American economy than to other economies, such as Germany, where smaller family-owned businesses play an important role. There are many ways to do business that do not involve corporations—“corporation” is not synonymous with “business.”

The American public corporation grew up around mass production and mass distribution, enabled by a continent-sized consumer market. Economies of scale meant that bigger was more efficient. It also meant that corporations required capital on a scale too large to be funded by private partnerships or banks: They needed shareholders. Massive size was a distinguishing feature of the American corporation for most of the 20th century, and big firms were almost always listed on the stock market.

Large national corporations and their bankers created a worrisome aggregation of power in the early 20th century. The Progressive movement advocated the expansion of a federal government powerful enough to act as a counterweight to the new corporations, including regulatory agencies such as the Food and Drug Administration and new cabinet-level departments like the Department of Labor. The growth of a large national government went hand in hand with the growth of the corporation.

After the labor laws of the 1930s, the mobilization for World War II, and postwar labor agreements across major industries, the American corporation emerged with a widely shared social compact that included stable employment, career ladders, and benefits, such as health insurance and retirement security for employees and their families. This corresponded with an era of unprecedented prosperity, low inequality, and high mobility, largely underwritten by the corporate economy. For three decades after the end of the war, American corporations continued to grow bigger and more encompassing.