James Taylor argues that the current literature misconceives the history of joint-stock companies in nineteenth-century Britain. The literature, he argues, asserts that the development of company law and the spread of companies were a response to the rise of capitalism. Taylor aims to revise this literature and show that resistance in wide circles to joint-stock companies was vehement throughout the period he has studied and that their victory was anything but natural and inevitable. Only a reimagination of the company as a private entity, rather than a public sphere body, during 1844–1870 diminished the opposition and allowed the emergence of the joint-stock company. The company and its legal framework could not expand until after the middle of the nineteenth century because of strong opposition, and it really expanded only after it was culturally legitimized.

For full disclosure, I should alert the readers that I might be prejudiced. Taylor claims, referring to my 2000 book, Industrializing English Law, that “Harris, though protesting originality, in fact accepts many of the assumptions of the earlier historiography” (3). Taylor's criticism of the literature is based on his intuition that others fall into the familiar Whiggish historiography trap in assuming that what exists now is better than what existed in the past and thus ought to have developed. He attempts “to transcend traditional accounts of the development of the corporate economy by exploring the status of the joint-stock company in nineteenth century imagination” (13).

The first part of the book is a cultural history of the joint-stock enterprise. In it, he relies heavily on literary sources, novels, plays, periodicals, cartoons, and the like. This is admirable. His reading and interpretation of the texts is lively and appealing. But the connection to the second part of the book, which deals with politics and legal change, is not sufficiently clear. Taylor admits that he does not use the cultural sources as evidence for the “realities” of business and law. They do not always testify to prevailing values, sometimes they represent only preferred values, and occasionally the values of authors end up shaping public values. The problem with Taylor's methodology of using cultural sources for understanding legal changes is that it is not conclusive. To make the connection between the first and the second part of the book, Taylor had to contextualize, socially and politically, the authors and their works. He had to show (admittedly an elusive task) which of them had any direct or indirect influence on the resistance to the joint-stock company. Were they just ephemeral literary Luddites swept by the wave of industrialization, as one historian claimed? Did they contribute, as some Ultra Tory jurists did, to a trivial lag in the development of the legal framework compared to the development of the economy? Or did they change the course of history?

The second part of the book follows more familiar paths and interprets mostly known sources as showing widespread resistance to the joint-stock company throughout the century. However, he lumps together objections to a variety of changes. Some of his authors oppose the expansion of the market, commoditization, and the rise of capitalism. Some resist the use of credit, bankruptcy discharge, speculation in goods, and the appearance of intangible assets. Some were anxious about the development of large firms and monopolies, irrespective of their organizational form, be they family firms, partnerships, or joint-stock companies. Some indeed countered the joint-stock company itself, but different features of it and for different reasons.

Speculation in the secondary market was more than two centuries old by 1800. It was not substantially different from speculation in grains, spices, and tulips, which was even older. Such speculation was also common in shares of well-respected publicly spirited companies such as the East India Company, the Bank of England, and canal and railway companies. It did not have much effect on their day-to-day management. The conflict was between sophisticated and naive investors. The periodic postcrash hostility to such speculation demanded tighter regulation of stock market practices, for example, in the form of a ban on future and option trading in shares, bonds, and commodities, but not restriction of incorporation as such.

The primary market gave rise to a different type of criticism. Here, promoters offered shares in worthless companies, carrying businesses that had no real prospects of being profitable, yet decorated with respectable directors, companies in which the promoters and directors invested nothing. Swindling by promoters began in the late seventeenth century and persisted throughout the eighteenth and nineteenth centuries. The conflict here was in the relationship between promoters and passive investors. The remedy on the agenda until 1844 was scrutiny of companies by the state to determine which had legitimate prospects and which were bubble companies. Starting with general incorporation in 1844, disclosure to potential investors and reliance on their investment decisions became the preferable solution. Interestingly, the requirement to circulate a prospectus and disclose financial statements was revoked just a few years after its introduction in 1844 and was reimplemented only in 1900. This, by the way, does not fit Taylor's chronology as it shows an early lapse and a later resurfacing of regulation of public offerings.

Discussions of the limited liability feature of the company began only towards the middle of the nineteenth century. Passive and naive shareholders, the victims of unregulated public offerings, only benefited from the limitation of their liability. The basic conflict represented by the limited-liability feature is between equity holders and creditors. Banks feared that limited liability would increase equity finance of companies at the expense of debt finance supplied by banks. Depositors feared that limited-liability banks would not survive runs for liquidity and would collapse. Evangelical theology viewed unlimited personal liability as the proper path to suffering and atonement. Each of these groups was not hostile to incorporation in general and was quite different in its motivations from the other groups.

Taylor's lumping of opposition to speculation in shares, unregulated public offering of shares, and limited liability is problematic. It does not distinguish between different sources of opposition in terms of their origin, timing, rationale, support base, and desired remedies. I believe that the source of confusion is Taylor's insufficient familiarity with the legal-economic theories that provide insights into the basic conflicts and tensions embedded in the business corporation. The first part of the book demonstrates the trade-off between cultural-literary history and political-legal history and the difficulty of connecting the two. In the second part, the divergence is between humanities-inclined history and social science-inclined history. At least in this context this is not an inevitable trade-off. One can study the primary sources including literary sources, be sensitive to the historical context, discharge Whiggish (or evolutionary, Eurocentric, or other discredited) assumptions and still be informed by legal-economic theories. Such theories could make a more convincing narrative of opposition to joint-stock companies than the one offered by Taylor. Yet the book is definitely worth reading for the originality and stylishness of part 1 and some of the insights of part 2.