Abstract

Business Bureaucracies and the Rivalry of Accountants and Engineers in American and British Corporate Capitalism, 1880-1930

This paper offers a comparative perspective on the modern corporation. At the turn of the twentieth century, authority in the capitalist firm shifted from patterns of familial control within small proprietorships to bureaucratic command within integrated, mass production corporations. This paper compares the US and the UK, focused in particular on the steel cities of Sheffield and Pittsburgh and the transportation hubs of Liverpool and Baltimore. The paper argues that the growth of business bureaucracies was decisively shaped by the distinct configurations of class power. This can be seen in the relative power of accountants and engineers in British and American firms. In the UK, the traditional, proprietary bourgeoisie of the nineteenth century was comparatively well-organized and powerful compared to the proprietary elite of the US. This gave British accountants, as capital’s representatives through the audit function, substantial power within British firms. In contrast, in the US, class pressures came not from “above,” since the traditional, nineteenth century bourgeoisie was comparatively weak, but from “below,” from the narrow but powerfully organized craft unions of the AFL. This gave engineers, who could redesign plant and production processes to undercut the power of costly craft workers greater importance in US firms. In contrast, British workers were organized in more inclusive federations that increasingly bargained at the sectoral level. In addition, the wage premium of skilled workers was far lower in the UK. British managers had less incentive to attack the power and privileges of the craft elite. In two crucial areas, cost accounting and capital asset depreciation, professional engineers and accountants offered contrasting approaches to the management of the firm. In the UK, accountants largely prevailed over engineers, while in the US, engineers prevailed over accountants.