What is the purpose of a corporation? Do businesses exist to do anything other than to make money for their shareholders? Americans are no strangers to questions like these in 2021 as we debate the merits of “shareholder capitalism” versus “stakeholder capitalism.” I came to Hagley—with the generous support of an Exploratory Research Grant—to explore a different time that Americans debated what the purpose of a corporation should be, specifically the 1980s. The 1980s were not an easy decade for American business owners. As American businesses struggled to meet the growing challenges posed by foreign competitors, so-called corporate raiders took advantage of companies’ depressed stock prices to launch corporate takeovers designed to oust incumbent managers. Corporate raiders justified hostile takeovers by claiming that managers had been wasting their shareholders’ money thanks to a combination of incompetence, self-serving corporate “empire building,” and a misguided belief that companies had obligations to society beyond shareholder value maximization.
Hagley’s collections provide a great window into how the nation’s business managers struggled to develop a coherent defense against the corporate raiders they despised so much. The National Association of Manufacturers (NAM) records show how the leaders of the nation’s largest industrial companies lobbied Congress to protect them from hostile takeovers while also lobbying against any anti-takeover legislation that would place new regulations on corporate behavior. As I read through a large stack of press releases begging Congress and the Reagan administration to intervene in the hostile takeover market, only to then read through an equally large stack of press releases criticizing the interventions policymakers proposed for going too far, I got the sense of corporate leaders trying (not all that well) to walk a difficult political tightrope.
The breadth of Hagley’s collections also allowed me to see just how disorganized the American business community was in the face of the hostile takeover movement. While the NAM collection had a wealth of material on managers’ efforts to oppose hostile takeovers, the United States Chamber of Commerce records were almost entirely silent about hostile takeovers. While not discovering evidence of something in an archive can never meet the same joys as finding a game-changing document, the fact that one of the largest and most powerful business groups in the country had little to say about one of the biggest issues of the 1980s speaks to just how heterogeneous the American business community was. Even when business leaders agreed about the need to stop hostile takeovers, they still squabbled about the particulars. Some of the most interesting documents I found in the NAM collection were comparisons of NAM’s positions on hostile takeover legislation and the Business Roundtable’s positions on the same issues. Though NAM and the Roundtable were allied in the fight against corporate raiders, they were far from being on the same page about how best to oppose them.
My visit to Hagley was a great reminder that the American business community is far from a homogeneous one. The “Reagan Revolution” may have delivered many political victories to the nation’s business community, but as the controversy over hostile takeovers shows, these gains from these victories were far from evenly shared. Part of the argument of my dissertation project, “The Shareholder Value Revolution,” is that it was precisely these differences between members of the business community that helped to foster the rise of shareholder value maximization as financers and shareholders capitalized on this division to elevate finance to a commanding position in the nation’s economy.
Sean Delehanty is a historian of American political economy and a Ph.D. candidate at Johns Hopkins University. In support of his work, Delehanty received a research grant from the Center for the History of Business, Technology, & Society at the Hagley Museum & Library.
