Rob McQueen's history of English Company Law sheds new light on that nation's shift from having the most restrictive laws in Europe regarding company formation in the eighteenth century to having the most permissive in the nineteenth. The great strength of his study is its immersion in contemporary debates regarding laissez-faire, corporate responsibility, and state regulation of business. The book is well grounded in a vast array of primary sources: company records, parliamentary hearings and reports, court cases, and newspapers and periodicals. A true social history, the book situates company law within the broader context of cultural attitudes toward business, the behavior of investors, and the actual practices of businesspeople and corporations.

McQueen overturns a number of long-standing assumptions by business historians regarding the origins of limited liability legislation in the 1850s. He argues against the dominant view that the permissive new Acts of 1855 and 1856 represented a sudden and discontinuous break from a restrictive past. Although the Bubble Act of 1720 effectively outlawed joint-stock companies for a century, business practice proved quite adept at meeting the needs of commerce and investment through innovations such as “deed of settlement” companies, which were essentially extended partnerships. Such entities were effective in raising capital and were accepted by the business world. That they were of dubious legality and lacked official state sanction was seldom a problem.

Debates over the eventual adoption of limited liability in 1855 and the actual performance and reception of business corporations in the following decades are important themes of this book. McQueen questions historical accounts that depict limited liability as a necessary and desirable part of capitalist development that was aggressively lobbied for by businesspeople. As he demonstrates, most Victorian merchants and industrialists preferred private partnerships over limited liability companies, which they feared would lower barriers to competition and undermine privacy in commercial matters. Instead, McQueen traces out the many different strands of opinion that favored limited liability. These included Christian socialists, such as F.D. Maurice, who believed that without limited liability, investment in company shares would remain a monopoly of the wealthiest Britons, unfairly restricting opportunities for members of the middle and working classes. Other important, although under-studied, influences in favor of limited liability included the fear of “capital flight,” as a large amount of English money in the 1850s was going overseas, into European companies offering limited liability to shareholders. There was also pressure from professional groups such as lawyers and accountants who saw the potential for much new work for themselves in the expansion of joint-stock companies.

In 1855, Parliament allowed existing companies to limit shareholder liability, and a subsequent Company Act in 1856 greatly simplified the process for creating new companies, alhough as McQueen points out, state licensing of companies did not mean state regulation or oversight. The new laws enshrined the principles of laissez-faire, which enabled many companies to operate without adequate capital or accountability to their shareholders or creditors. The high rate of corporate failures and frauds during the 1860s and 70s led many of the era's most prominent observers—Thomas Carlyle, Samuel Smiles, Charles Dickens—to denounce limited liability companies as “an embodiment of the moral and spiritual decline of British industry and commerce” (315). The critics of the corporate world never succeeded in articulating an alternative vision of business organization, nor did they convince the state to assume serious regulatory responsibility over companies. Although several Companies Acts were adopted in the late nineteenth and early twentieth centuries, they only brought about incremental reform. In Rob McQueen's evocative words, the laissez-faire principles of the 1856 Company Act “were preserved, like fossilized remains, as part of the company legislation that followed” (274).

England's Company Acts cast their influence throughout the world. Because of Britain's dominant position in international trade, a number of nations modeled their company law on the British example. This legislation was also exported to most of the British Empire, as McQueen demonstrates in his provocative chapter on Australian company law. He argues that the provisions of limited liability proved a failure in Australia, as English company law was exported to the colonies without regard to its suitability to local business needs. Colonial administrators were primarily concerned with the needs of British businesses operating in Australia, which were advanced at the expense of local businesspeople and investors.

Today, the Anglo-American world continues to struggle with financial problems stemming from mid-Victorian company law. As McQueen argues, England's 1856 legislation effectively defined companies as “economic entities which owe their sole responsibility to their shareholders, even if by so acting the company may be acting contrary to broader social interests” (175). Principles of free trade embodied in legislation 150 years ago also continue to inhibit state oversight of business corporations. McQueen's extensive discussion of nineteenth-century corporate fraud is, I am sad to say, still very relevant.