Abstract
The industrialists of the last decades of the nineteenth century engaged in various controversial practices, and muckrakers gained prominence by highlighting alleged business malfeasance. Historians noted, however, that many of the allegedly unethical practices were not necessarily illegal at the time. These practices demonstrate cases where something that is legal may still be unethical. Then again, some allegedly unethical practices proved beneficial to consumers, workers, and some businesses. The United States proved especially keen to prevent cartels and monopolies unlike contemporaries in Germany and Japan.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Fans of Mel Brooks’ Blazing Saddles might add stampeding cattle through the Vatican.
- 2.
See pages 460–469 for discussion of American Tobacco Company restricting sellers of their cigarettes from selling other brands—the company offered an additional commission for sellers who complied with the edict.
- 3.
A modern-day take on this might be to issue bubble-gum cards of your defunct or soon-to-be-defunct rivals, listing similar business statistics.
- 4.
For intervention in trade, Smith described how colonial enterprises received exclusive rights (575).
- 5.
Parrillo offered the American income tax system as an example whereby people generally obey the laws at rates far higher than a Benthamite calculation of marginal gains from cheating versus the marginal cost from being detected and fined would predict (Parrillo 2014, 34–35).
- 6.
The tax deductibility issue raises some intriguing possibilities, such as verifying how much was actually paid in bribes. Would companies have an incentive to overstate such payments on their tax returns? Did the bribed give receipts?
- 7.
- 8.
Arthur Mann, in the introduction to Riordon’s book, pointed out that Tammany Hall and other big-city machines “acted as a social welfare agency when the poor and the immigrants had nowhere else to turn. What is more, the machine familiarized millions of newcomers to this country with representative government (Riordon 1963, xix).”
- 9.
There was an old boast attributed to Simon Cameron: “An honest politician is one who, when he is bought, will stay bought (https://en.wikiquote.org/wiki/simon_cameron, viewed February 27, 2017, 9:56 pm).”
- 10.
Given the banks’ greater knowledge of acquaintances, such lending practices did not necessarily imply poor loans.
- 11.
Carnegie usually was an unruly competitor (McConnell [1930] 1973, 105). He often refused to join price-setting schemes and was almost gleeful in undercutting his rivals’ price. J.R.T. Hughes described Carnegie’s bravura performance in dealing with a collusive agreement that dissatisfied him: “Carnegie leaped up, announced that he wanted an amount equal to the largest quota, moved his finger around the table from magnate to magnate telling each one his own business and costs and threatening to undercut them all. It was a typical Carnegie display, and it worked (Hughes [1965] 1986, 239).” Alfred Chandler Jr. suggests that Carnegie joined the Bessemer pool to see the cost figures of his rivals (Chandler 1977, 268).
- 12.
The National Biscuit Company (Nabisco) stated in its annual report for 1901 that it had learned its lesson regarding trying to control or to limit competition (Chandler 1977, 335).
Bibliography
Andrews, Edmund. “29 Nations Agree to Outlaw Bribing Foreign Officials.” New York Times. November 21, 1997. http://www.nytimes.com/1997/11/21/business/29-nations-agree-to-outlaw-bribing-foreign-officials.html, viewed January 25, 2017.
Carlton, Dennis and Jeffrey Perloff. Modern Industrial Organization (Boston, MA: Pearson-Addison Wesley, 2005).
Chandler, Alfred Jr. The Visible Hand: The Managerial Revolution in American Business (Cambridge, MA: Harvard University Press, 1977).
Chester, Norman. The English Administrative System, 1780–1870 (Oxford, UK: Clarendon Press, 1981).
Clay, Karen and Werner Troeksen. “Strategic Behavior inn Whiskey Distilling, 1887–1895.” Journal of Economic History 62(4), December 2002, 999–1023.
Feuerwerker, Albert. China’s Early Industrialization: Sheng Hsuan-Huai and Mandarin Enterprise (Cambridge, MA: Harvard University Press, 1958).
Fisman, Raymond and Edward Miguel. Economic Gangsters: Corruption, Violence and the Poverty of Nations (Princeton, NJ: Princeton University Press, 2008).
Friedman, Daniel and Daniel McNeill. Morals and Markets: The Dangerous Balance (New York, NY: Palgrave Macmillan, 2013). 2nd edition.
Galambos, Louis. “The Trade Association Movement in Cotton Textiles, 1900–1935.” Explorations in Entrepreneurial History 2(1), Fall 1964, 31–55.
Gerschenkron, Alexander. “Russia: Agrarian Policies and Industrialization, 1861–1914.” Continuity in History and Other Essays (Cambridge, MA: Belknap Press, 1968).
Gordon, Sanford. “Attitudes towards Trusts Prior to the Sherman Act.” Southern Economic Journal 30(2), October 1963, 156–167.
Grandy, Christopher. “Original Intent and the Sherman Antitrust Act: A Re-examination of the Consumer-Welfare Hypothesis.” Journal of Economic History 53(2), 1993, 359–376.
Gunton, George. “The Economic and Social Aspects of Trusts.” Political Science Quarterly 3(3), September 1888. 385–408.
Hadley, Arthur. “Private Monopolies and Public Rights.” Quarterly Journal of Economics 1(1), October 1886. 28–44.
Hatfield, Henry. “The Chicago Trust Conference.” Journal of Political Economy 8(1), December 1899. 1–18.
Hofstadter, Richard. “The Paranoid Style in American Politics.” The Paranoid Style in American Politics and Other Essays (New York, NY: Alfred A. Knopf, 1965), 3–40.
Chan, Hsin-pao. Commissioner Lin and the Opium War (Cambridge, MA: Harvard University Press, 1964).
Hughes, Jonathan. The Vital Few: The Entrepreneur & American Economic Progress (New York, NY: Oxford University Press, [1965] 1986). Expanded edition.
Huntington, Samuel. Political Order in Changing Societies (New Haven, CT: Yale University Press, 1969).
Kristof, Kathy. “David Versus Goliath: Lawsuit against Wal-Mart Could Change the Face of Retailing.” Chicago Tribune, June 14, 1994, Sec. 4, 1–2.
Landes, David. “Structure of Enterprises.” The Rise of Capitalism (New York, NY: Macmillan, 1966). 99–111.
Marburg, Theodore. “Government Business in Germany: Public Policy toward Cartels.” Business History Review 38(1), Spring 1964, 78–101.
McConnell, Donald. Economic Virtues in the United States: A History and an Interpretation (New York, NY: Arno Press, [1930] 1973).
McCraw, Thomas and Forest Reinhardt. “Losing to Win: U.S. Steel’s Pricing, Investment Decisions, and market Share, 1901–1938.” Journal of Economic History 49(3), September 1989, 593–619.
Menes, Rebecca. “Limiting the Reach of the Grabbing Hand: Graft and Growth in American Cities, 1880 to 1930.” Corruption and Reform: Lessons from America’s Economic History, edited by Edward Glaeser and Claudia Goldin (Chicago, IL: University of Chicago Press, 2006), 63–94.
Nichols, Philip. “Outlawing Transnational Bribery through the World Trade Organization.” Law and Policy in International Business 28(2), Winter 1997, 305–381.
Okazaki, Tetsuji, Michiru Sawada, and Kazuki Yokoyama. “Measure the Extent and Implications of Director interlocking in the Prewar Japanese Banking Industry.” Journal of Economic History 65(4), December 2005. 1082–1115.
Parrillo, Nicholas. Against the Profit Motive: The Salary Revolution in American Government, 1780–1940 (New Haven, CT: Yale University Press, 2014).
Public Opinion. “Mr. Blaine on Trusts.” Vol. V, No. 20, August 25, 1888, 425.
Riordon, William. Plunkitt of Tammany Hall: A Series of Very Plain Talks on Very Practical Politics, Delivered by Ex-Senator George Washington Plunkitt, the Tammany Philosopher, From His Rostrum—The New York County Court House Bootblack Stand (New York, NY: E.P. Dutton, 1963).
Ritchie, Michael. Please Stand By: A Prehistory of Television (Woodstock, NY: Overlook Press, 1995).
Rose-Ackerman, Susan. Corruption: A Study in Political Economy (New York, NY: Academic Press, 1978).
Rose-Ackerman, Susan. Corruption and Government: Causes, Consequences, and Reform (Cambridge, UK: Cambridge University Press, 1999).
Sears, Marian. “The American Businessman at the Turn of the Century.” Business History Review XXX(4), December 1956, 382–443.
Shulman, David. From Hire to Liar: The Role of Deception in the Workplace (Ithaca, NY: Cornell University Press, 2007).
Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations, edited by R.H. Campbell and A.S. Skinner (Indianapolis, IN: LibertyClassics, 1981).
Standiford, Les. Meet You in Hell: Andrew Carnegie, Henry Clay Frick, and the Bitter Partnership that Transformed America (New York, NY: Crown Publishers, 2005).
Stashower, Daniel. The Boy Genius and the Mogul: The Untold Story of Television (New York, NY: Broadway Books, 2002).
Stevens, William “Unfair Competition.” Political Science Quarterly 29(2), June 1914, 282–306 and (3), September 1914, 460–490.
Strouse, Jean. “Capitalism Depends on Character.” New York Times. July 7, 2002, Sec. 4, 9.
Sullivan, Mark. Our Times: The United States, 1900–1925. Vol. II. America Finding Herself (New York, NY: Charles Scribner’s Sons, 1927). 6 vols.
Tarbell, Ida. The Life of Elbert H. Gary: The Story of Steel (New York, NY: D. Appleton, 1925).
Telser, Lester. “Cutthroat Competition and the Long Purse.” Journal of Law & Economics 9(1), October 1966, 259–277.
Troesken, Werner. “Exclusive Dealing and the Whiskey Trust, 1890–1895.” Journal of Economic History 58(3), September 1998, 755–778.
U.S. Industrial Commission. Preliminary Report on Trusts and Industrial Combinations, Together with Testimony, Review of Evidence, Charts Showing Effects of Prices, and Topical Digest. Volume 1 of the Commissions Reports (Washington, D.C.: Government Printing Office, 1900).
Watkins, Myron. Industrial Combinations and Public Policy: A Study of Combination, Competition and the Common Welfare (Boston, MA: Houghton Mifflin, 1927).
Weiner, Myron. The Politics of Scarcity: Public Pressure and Political Response in India (Chicago, IL: University of Chicago Press, 1962).
Whitehorne, Earl. “Some Experiences in Price Cutting.” American Machinist 68(12), March 22, 1928, 294–296.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2020 The Author(s)
About this chapter
Cite this chapter
Surdam, D.G. (2020). Ethics of the Firm and Strategic Behavior. In: Business Ethics from the 19th Century to Today. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-37169-2_5
Download citation
DOI: https://doi.org/10.1007/978-3-030-37169-2_5
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-37168-5
Online ISBN: 978-3-030-37169-2
eBook Packages: Economics and FinanceEconomics and Finance (R0)