Capitalism and Resilience

Capitalism is a remarkable system which has re-invented itself throughout history. It has proved capable of co-existing with entirely different political and economic contexts. Firms are much more fragile institutions than the capitalist system, although there are prominent examples of resilience, very occasionally for hundreds of years. Business historians have typically assumed that firm growth and survival are positives for society, while the failure of a firm is a problem which needs explaining and is bad for society. This lecture argues that historically the correlation between firm survival and societal good is not automatic. The lecture will discuss cases when corporate resilience is, in the words of the economist William Baumol, productive for society, but also unproductive and even destructive. It will consider historically firms based in both China and the Global South and developed countries.