A Brief History of the Corporation: understanding what an attention economy is and where it comes from

Venkatesh Rao's tour-de-force blog-post, "A Brief History of the Corporation: 1600 to 2100," is an attempt to synthesize several accounts of economic trends and the institutions that fuel and benefit from them, primarily corporations. Beginning with the age of mercantilism and the East India Company's many bubbles and busts (not to mention ruthless conquests and brutal consolidations); Rao moves onto the "Schumpeterian" era where growth was driven by innovation and the "colonization of time" in the form of "labor-saving" devices that let corporations capture more value from their workers. Rao concludes with a brief section on the current era, the "Coasean" period in which individuals, coordinating among each other, are at center stage -- basically, maker culture. Part history lesson, part economic speculation, Rao's essay is provocative, a little esoteric, well-written and challenging.
Take an average housewife, the target of much time mining early in the 20th century. It was clear where her attention was directed. Laundry, cooking, walking to the well for water, cleaning, were all obvious attention sinks. Washing machines, kitchen appliances, plumbing and vacuum cleaners helped free up a lot of that attention, which was then immediately directed (as corporate-captive attention) to magazines and television.

But as you find and capture most of the wild attention, new pockets of attention become harder to find. Worse, you now have to cannibalize your own previous uses of captive attention. Time for TV must be stolen from magazines and newspapers. Time for specialized entertainment must be stolen from time devoted to generalized entertainment.

Sure, there is an equivalent to the Sun in the picture. Just ask anyone who has tried mindfulness meditation, and you'll understand why the limits to attention (and therefore the value of time) are far further out than we think.

The point isn't that we are running out of attention. We are running out of the equivalent of oil: high-energy-concentration pockets of easily mined fuel.

The result is a spectacular kind of bubble-and-bust.

A Brief History of the Corporation: 1600 to 2100 (via Futurismic)

(Image: Red Wing Shoes Factory Tour, a Creative Commons Attribution (2.0) image from 94693506@N00's photostream)



  1. His problem is that he loves to declare abstract terms and then just defines them terribly. He compares “culture, politics, war, business.” Are those really similar things? He declares that culture does not use technology. What? That doesn’t even make sense. He has an interesting outlook, but I just get the impression that he doesn’t put a huge amount of effort sometimes. He also doesn’t need to tell me how many books he read.

    1. No, he is saying they are interlinked, with some overlap.

      Also, he says culture is suspicious. In that sense i think culture is the sum total of human interaction. Notice how we fear the possible effects of EM waves, and worry about what facebook tells third parties about us, while we have made mobile phones and facebook a part of our lives.

      politics and military do not care either way, as while some elements have changed the core stays the same.

      Economics however takes a loop the loop every time a new development comes along.

  2. “Corporation, n. An ingenious device for obtaining individual profit without individual responsibility.”
    — Ambrose Bierce

    1. There were, once upon a time, two safeguards against what your quote describes.
      1. Corporate charters. Corporations used to have to get chartered by their governments, specifying their purpose and duration. As a result, you couldn’t create and remain a corporation if you were doing undesirable things.
      2. The corporate income tax. The direct price of limited liability is that you’re supposed to pay taxes twice- 1st on corporate profits, then on income and/or capital gains.

      Of course the 1st no longer exists, and the 2nd is full of holes you can drive whole industries through.

  3. TL;DR. I guess I don’t have the attention span. Thanks for the summary though. I took a look at the graphs & pictures. The one with the pocket watches on the time zones was neat.

    That said, I found that getting rid of TV about 5 years ago made a lot more time for me to read all those books on my bookcase and to get into a decent active outside lifestyle. I decided to do this not only for the money but for the health. Sitting on my butt watching TV was doing me harm in many ways.

    The only problem with getting rid of my TV was the dramatic social difference. I could no longer participate in casual talks of “what was on last night”. It sort of socially outcast me for awhile. Then I found I started gravitating toward other book-readers and bike riders/roller skaters. I mingle with a slightly different group of people now than I did before when I was a couch potato. Thankfully I am coming across a lot of other people who aren’t glued to the TV. That was an unanticipated side effect about freeing up my time for other activities.

  4. Corporations are funny. At their heart, they’re a mechanism for protecting and helping those that the State likes. They legalize illegal conduct (GM kills a couple dozen people with faulty designs and pays fines/restitution, you kill a couple dozen people and and you personally get put in jail), create tax shelters (GE pays no taxes), and enact liability shields (BP spills millions of gallons of oil, but the corporate officers pay no penalty).

    But cross the State, and the State’s enthusiasm for piercing the corporate veil and going after its members personally becomes apparent.

    The best solution is no liability shield no legalizing certain forms of fraud/theft. All people that commit an illegal act are liable for it personally. Ironically, this is the hardcore libertarian position.

  5. Thanks for the shout-out Cory.

    Seeing your name juxtaposed against my essay sparked a weird mental association for me: I believe your “metacrap” argument applies to the future of organizations as well.

    Far too many theorists/futurists about the future of work peddle all sorts of alluring and abstract proposals for Brave New Organizations powered by social media which will correct the problems and pathologies of organizations and herald a glorious Future of Work.

    I find that a study of the history of corporate forms suggests that just about any new org. form will be subverted, incompletely adopted, implemented with dumb mistakes, fail to prevent moral hazard, and so forth.

    So while I do believe a new Coasean era of organizational forms is around the corner, they will simply create a new theater of drama and pathologies for another round of fun :)

    But I would still count that as progress. Those who learn from their mistakes find new mistakes to commit, after all.


  6. So while I do believe a new Coasean era of organizational forms is around the corner, they will simply create a new theater of drama and pathologies for another round of fun :)

    As a corollary, consider Marshall McLuhan’s observation (in Understanding Media, if memory serves) that obsolete technologies do not simply vanish: rather, they serve as entertainment.

    Example, horses. After their replacement as primary transportation (and weapons of war) by trains and automobiles, horses became more associated with circuses, races, Wild West shows, polo matches, and so on.

    We might look for similar patterns in corporate evolution: new roles for the old-style corporations, less efficacious but more entertaining.

  7. I’ll gladly ride around on a CEO’s back with a bit in his mouth, and feed him oats.
    GLADLY, you greedy misguided self-interested cretins!

  8. Thanks for the heads-up on this, Cory : )

    Epic post (7k words is a fair bit to bite off), but definitely worth the read… deep and thought-provoking.

    Vennkat’s blog: bookmarked.

    1. Tho some time spent with friends morphed into time spent with friends watching tv, no?

  9. I read Venkat’s post front to back. I _think_ where he’s going with this (stepping out on a limb here) is similar to territory covered by Tom Peters some years ago: organizations are evolving to be loosely-bound short-term collections of temporary employees with focus on a specific project. The idea of a legal entity like a corporation with “permanent” (whatever that means in today’s business climate) employees is obsolete today thanks to globalization and outsourcing. This ties in with his earlier post on the Gervaise Principle based on (mostly the U.S. version of) the television show THE OFFICE. In that post Venkat talks about (borrowing from a Hugh MacLeod cartoon) the three major tiers of the corporation pyramid ranging with the Losers at the bottom who have traded enlightenment and satisfaction for a steady paycheck, the Clueless in middle management who are the only ones truly vested in the long term interests of the corporation, and Sociopaths at the top who drive everything as long as it meets their needs, and both the Losers and the Sociopaths maintaining a high degree of mobility from job to job. I think what’s happening, to use Venkat’s terminology, is that the Sociopaths have figured out that, thanks in part to the Internet, the Clueless are no longer really necessary and add no value. That leaves the mobile Sociopaths and Losers, and no middle management to actually care about the long term survival of the organization. I personally buy into this, so much so that in 2006 I voluntarily walked away from a six-figure corporate job with benefits to become self employed. To paraphrase Ghandi, you might as well resign yourself to the change you see coming in the world.

    — Chip Overclock

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