Hobson’s choice

Companies must not own companies

Whether as an official registration plate, or as a bit of fun stuck at the back of the happy couple’s car along with the horseshoes and old boots, U2R1 is an age-old play on words and part of the English-speaking world’s wedding-day kitsch. The picture above is from Ireland, and this ancient Rolls-Royce looks resplendent with its funny number plate, as does its chauffeur, complete with elegant, white golf umbrella, to cover all eventualities. It is Ireland, after all.

Marriage is a union, always of two people who join as one. Even in lands where polygamy is permitted, each marriage is between two people. Even in countries where same-sex marriages are allowed, it is a union of two people. Bet that surprised you. What will also surprise you is that there is no country where polygamy and same-sex marriage are both allowed.

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Hobson’s choice is an English expression that means no choice. It comes from a Cambridge stable-owner in the days of the horse, who rented out his one and only horse. When folk came to choose their steed, their choice was one: Hobson’s choice. It’s akin to Henry Ford’s You can have any colour you like, as long as it’s black.

The extent to which a radical proposition daunts you should not necessarily dissuade you from its goal, but merely cause you to ponder the means it will require for its achievement. European monetary union was daunting, but achieved. An EU with no internal borders was daunting but greatly achieved. Laying the trans-Atlantic telegraph cable was daunting, but it, too was achieved. And Project 2025 will at some point have looked daunting: and now it is being achieved.

There was a time when the sanctity of marriage precluded divorce, because of the injunction that, what God had joined, no man should put asunder. Well, man devised means to introduce divorce, not because it was needed, but because it was wanted. Furthermore, man devised corporations, a creature of his ingenuity; and, of what he created, there are unquestionably aspects that he can also uncreate, especially when he’s faced with Hobson’s choice. He only needs to realise it.

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Harold Brighouse’s play Hobson’s Choice is set in the year 1880 in Salford, just outside Manchester. It’s the story of a cobbler, William Mossop, who is employed by Henry Hobson and who, by being complimented by a wealthy customer, comes to the notice of Hobson’s eldest daughter, Maggie, who keeps the shoe shop’s accounts. Maggie is very smart, and Willie is a great craftsman, but illiterate. Maggie sees an opportunity and proposes to Will, and they marry. She then takes advantage of an accident that befalls her father to engineer a situation that will extract money from him, by presenting him with no option but to cough up: Hobson’s choice. On their wedding day, they have their friends around for a celebratory meal, and, after eating, the table needs to be cleared:

ALBERT. What do you need the table for in such a hurry?

WILLIE. Nay, I’m not in any hurry myself.

FREDDY. Maggie wants it for something.

WILLIE. It’ll be for my lessons, I reckon. She’s schooling me.

FREDDY. And don’t you want to learn, then?

WILLIE. ’Tisn’t that. I—just don’t want to be rude to you—turning you out so early. I don’t see you need to go away so soon.

ALBERT. Why not?

WILLIE. I’m fond of a bit of company.

ALBERT. Do you want company on your wedding night?

Willie is a darling. He is to some degree putty in Maggie’s hands. He can’t read, and he can’t write. But he can do something that Maggie could never do: make the best shoes in that city on the Irwell. Maggie persuades him to quit her father’s shop and set up on his own.

The company that is formed by the union of Maggie Hobson and Willie Mossop is known as Mr and Mrs William Mossop. Henry Hobson may have a fine location in Chapel Street, but the fine shoes are at Will’s shop, in a basement in Oldfield Road. Will’s business does well, and Henry’s declines. Still, Chapel Street is Chapel Street and location is location. Eventually a deed of partnership is proposed. The new firm is to take the name—after some negotiation—of Mossop & Hobson. And Will’s ambitions don’t stop there, but extend to Manchester’s CBD:

It’s no farther from Chapel Street to Saint Ann’s Square than it is from Oldfield Road to Chapel Street. I’ve done one jump in a year and if I wait a bit I’ll do the other.

I acted in this play, as Henry Hobson, when I was a boy, and it made a stark impression on me. Will and Maggie have no money for a wedding ring, and so Maggie searches in a box and finds some brass curtain rings. Once success has been achieved, Will announces that he will replace the brass ring with something more opulent.

MAGGIE. What are you doing? You leave my wedding ring alone.

WILLIE. You’ve worn a brass one long enough.

MAGGIE. I’ll wear that ring for ever, Will.

WILLIE. I was for getting you a proper one, Maggie.

MAGGIE. I’m not preventing you. I’ll wear your gold for show, but that brass stays where you put it, Will, and if we get too rich and proud we’ll just sit down together quiet and take a long look at it, so as we’ll not forget the truth about ourselves ... Eh, lad!

WILL. Eh, lass! (He kisses her.)

I was 17 when I played Hobson, and we had a great time with that show. The erstwhile boys’ school had just admitted senior girls, and the play was chosen to incorporate as many as possible of the six young ladies who had joined us that year. Two of them joined the crew and four of them took roles, in our new drama company.

Ann Leechman (as Vickey Hobson), Hazel Roberts (as Alice Hobson), Janet McKelvie (as Mrs Hepworth), Philip Hird (as Willie Mossop), Susan Learoyd (as Maggie Hobson) and the author (as Henry Hobson) in a 1979 production of Hobson’s Choice.

The school’s band of boys (and girls) were popularising “Take That” in Salford long before boy bands had even been heard of:

MRS. HEPWORTH. You made these boots?

WILLIE (peering at them). Yes, I made them last week.

MRS. HEPWORTH. Take that.

(WILLIE rather expects “that” to be a blow. Then he raises his head and finds she is holding out a visiting card. He takes it.)

See what’s on it?

WILLIE (bending over the card). Writing?

MRS. HEPWORTH. Read it.

WILLIE. I’m trying. (His lips move as he tries to spell it out.)

MRS. HEPWORTH. Bless the man. Can’t you read?

WILLIE. I do a bit. Only it’s such funny print.

MRS. HEPWORTH. It’s the usual italics of a visiting card, my man. Now listen to me. I heard about this shop, and what I heard brought me here for these boots. I’m particular about what I put on my feet.

HOBSON. I assure you it shall not occur again, Mrs. Hepworth.

MRS. HEPWORTH. What shan’t?

HOBSON (crestfallen). I—I don’t know.

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In Cameroon, a country in west Africa, a man may marry any number of women. It is their culture, their tradition and their law. But they do not form a single family, as such. Each union is a union of two, although, in each of them, one partner is the same man. Two is the number of partners in the union between Will and Maggie, and two is the number of partners in the partnership between Will and Henry. In each case, each partner brings their own contribution to the union, whether maleness and femaleness, or craftsmanship and bookkeeping-craft, or location and production. A married couple can also be productive of issue, an administrator and a producer of goods can make a business, and the old master and the new master can do all right together:

WILLIE. You told me to be strong and use the power that’s come to me through you, but he’s the old master, and—

MAGGIE. And you’re the new.

WILLIE. Master of Hobson’s! It’s an outrageous big idea. Did I sound confident, Maggie?

MAGGIE. You did all right.

The beauty of a company is forming a union together for a common cause. The word itself is very old, and it derives from the word companion, which comes from Latin com- (from cum, with) and panis (bread). A company is two or more people who take bread together. Each brings their own contribution to the table, so that all may share the bounty. Classically it has involved the union of those with skills or ideas and those with the capital to bring the idea to fruition. Impresarios and actors, landed gentry and engineers, ship owners and intrepid sailors. And, in each case, the formation of a company is predicated on the observation that, for that which they propose to embark upon, there is a market.

But, we are no longer in the Salford of 1880. A century and a half have flowed down the River Irwell, and with it much trade to mung those waters. Men and women no longer embark on commercial enterprise for which there is a market, but seek to control and predominate in markets (true entrepreneurs are far fewer and further between than the ubiquitous use of the word enterprise would suggest). The unions that permeate commerce and trade nowadays are not made up of individuals who combine their abilities with a view to mutual advancement, but of companies themselves who combine in order to bend markets to their will: competitors, cohorts and customers alike.

Companies are legal persons. That means, in short, that they can own rights and they can owe obligations. That’s legal personality. I am a legal person, and you are a legal person, but your cat isn’t, even if it is bestowed with certain rights under the animal protection legislation, which are actionable at the instigation of the authorities, and not your cat. And, when you join as a shareholder of a company, then not only are you a legal person, and the persons you join with are legal persons, but the company itself is a legal person. I tend to the view that the modern insistence on calling only companies legal persons and calling individuals private individuals is a ploy, to mask this fact: that anyone or anything that can own rights and owe obligations is a legal person, and therefore people and corporations should essentially be handled the same way. Because changing the appellations makes it look as if they shouldn’t.

Most shareholders contribute only one thing: funds (especially with listed companies). And the vast majority of shareholders don’t even contribute those, for the fortunes of companies affect their value, and that affects the price of the shares, and so shareholders come and shareholders go, even though the funds originally contributed stay put: the vagaries of what we call the bourse or stock market.

When a shareholder receives a dividend, they can save it, or spend it. It is theirs to do with as they please. If they wish, they can even invest it in another company. What sometimes happens is that shareholders say Don’t pay such a large dividend, keep the money and use it to buy a competitor, that way we’ll get much bigger dividends next time because we will have thereby manipulated the market in our favour. Within certain parameters, that is lawful, but our ability to increase our profits doesn’t come from producing better products, but just by eliminating competition. I don’t think that’s fair, and nor does my theory of free market economics, and nor does my sense of justice, of purpose, of what companies are there for.

Each shareholder investment in a company creates a relationship (of debt) with that company. The money is transferred to the company, which books it as a liability owed to the shareholder but which can meanwhile do with it what it wants (including lose it). The shareholder is unlikely to ever see their money again if the company goes into insolvency, but they will in principle recoup their funds (or a part) when the company stops doing what it was set up to do (liquidation), or when an agreement is reached between the shareholder and someone who wants to buy their stake in the company. Sometimes that’s by way of the stock market, which regulates demand and supply of shares in large corporations, and sometimes it’s by way of private sale (for unlisted companies) or a take-over, where the shareholders sell their shares to another company that wishes to own the first one; that is subject to a number of criteria besides just the price (not all of which are always complied with).

Now, all this explanation may by now be getting a little tedious, since all I’m doing is sketching out the procedures by which corporate ownership works, and then only in terms of the basics. But it is on the last procedure I wish to dwell and ask you to ponder a while, which is why I’ve laboriously led you here: a take-over.

Would you describe a marriage as a take-over? Would you describe your marriage as a take-over? Was Will Mossop’s partnership with Henry Hobson a take-over? What about a polygamous Cameroonian—is he engaged in take-overs? When you think about it, there is something abhorrent in corporate take-overs. We shun slavery on the ground that we cannot own another human being as property. Yet, a company can own another company, which is merely a collection of people. The rationale is the compensation of the shareholders of the owned company, but the shareholders are not the only people that a company is. The take-over of a company is a take-over of its customers, and a take-over of its workforce, and a take-over of its suppliers. And as it grows through all these take-overs, so its might and influence increases to a point where the target cannot say no.

All forms of union entail some kind of efficiency, and that often means lay-offs in commerce. A man and woman or two persons of the same sex who decide even to live together, without marrying, save the outlays on a second residence. An inventor and a capitalist who join forces save the inventor having to work to earn the money to put his invention into production, the capitalist saves having to sit on his money till a good idea occurs to him. There is always efficiency in a union. Even Jesus brought 5,000 people together, and made out of a few loaves and fishes a meal for every one of them, with more to spare. Jesus may well be the first person on record to have formed a true company: 5,000 stakeholders eating bread together. What Jesus didn’t do, however, was form a company with the intention of downsizing his congregation to 3,000 and doubling the number of fish they needed to produce.

Companies do not simply enjoy efficiencies. They enjoy a lot more other things. They enjoy special tax treatment. They can arrange matters to take advantage of rules and regulations that are not available to private individuals, subsidies, grants, special tax status, freeports, deductions, tax holidays and negotiations. They can inveigle their way into corridors of power that are closed to the ordinary citizen, even though it is not the companies’, but ordinary citizens’, elected representatives who populate those corridors. (Companies can’t vote; not half!)

Although both private persons and companies are legal persons, what that implies for those legal persons depends very much on whether they are companies or not companies, and even the treatment of companies differs according to whether they are private companies or public companies, or listed companies, or very large companies, or large or small, small and medium-sized enterprises, cooperatives, limited partnerships, unlimited partnerships, de facto associations and so on: the list is far greater than any man could ever have wives.

And every corporate person is treated more favourably than any private person (never less favourably), pretty universally throughout a plethora of countries that declare themselves to be democracies—whose corporate law structures in fact by far pre-date their embrace of what they think is meant by democracy, whose very precept is the equality of all persons before the law: Let’s be a democracy, but, oh, no, we can’t get rid of the very institution—the company—whose avowed purpose it is to squash democracy before it can draw its first breath out of the womb; but—fear not! For we shall democratically institute protections to make sure companies do not end up as blood-sucking leviathans. Promise. And, because we are so committed to democracy, we shall first ask them, and even get them to design the rules, before introducing such controls. And we also promise not to take bribes, not ever.

We have a chicken and egg problem in relation to who is to blame for the present unrepresentative nature of representative government. Which came first: the bribe, or the readiness to accept the bribe? Ideology is out, and platitudes are in, for these democratic nations treat companies—legal persons like the rest of us—vastly differently to how they treat the people in whose purported defence the nation was even created.

Scotland, some say, was sold out to the English in 1704, and nobody was more vociferous in criticising that than Rabbie Burns, our national poet:

Bought and sold for English gold; what a parcel of rogues in a nation!

And, it may not be so apparent to the blinkered, but America has been sold out similarly. Having wrested its freedom from Blighty, it has proceeded to gift its bounty to the select few. Even though it was ordinary Americans who fought for independence with their lives, it is ordinary Americans whose lives have been sold down the Suwannee.

When a man marries a woman, he doesn’t thereby corner the market, except insofar as that one woman is concerned, and likewise she as concerns him. But a company can marry another company and still corner a market. In that sense, corporate marriages are like royal marriages in days of old, and even they were not that reliable: after all, it was three cousins—Tsar, Kaiser and King—who went to war in 1914. Companies do extraordinary things, like Lehman Brothers. If my own company were to go bankrupt, I would be destitute. When Lehman Brothers went bankrupt, it paid its managers bonuses totalling two billion US dollars, and left its creditors begging.

I don’t want this to get too long, so I’ll let those examples of special treatment for companies suffice. The world is changing rapidly before our eyes and it’s clear why: corporations are taking over. Not just take-overs, but taking over. They have huge power and influence, yes, but they also have huge markets that they control and they have huge amounts of money. They extract resources from the earth till they’re exhausted, and they extract labour and money from the earth’s human resources, till they’re exhausted. They do not break bread with anyone out of community spirit. We should maybe stop calling them companies; whatever, in any case, we should stop the companies.

The time has come to reassess them, in much the same way as regimes have in the past had to decide how they would face up to gangs, mobs, mafias, and private armies (a corporation that demands unstinting respect, compliance, that voices its public announcements from a single point of view, talks of staff as members of a family, that then fires staff at its whim, that will not brook any organised representation for the workers, that has perhaps even condoned violence and murder (as in banana republics) is not a mafia?) And, if the regime is itself complicit with gangs and so on, then private citizens can either make themselves complicit with their regimes, and hence with such gangs, or they can take a stand based on one of two positions: (a) that their personal morality finds such complicity unconscionable, or (b) they realise that such regimes often devolve into violence and injustice and that, even if they reckoned they could ride the wave of that corruption and even profit from it, they also realise their happiness would be short-lived.

If a stand is to be taken, then it must be contemplated how to stop companies not just employing us, but governing us, and how to persuade them to break bread with us in true community. I believe this can best be done by elevating employment and customer justice to the level of importance of shareholding, so that the artificial panoply created with the word stakeholder actually means something: where all three stakeholders will sit willingly at one and the same table and break bread: the customer, who buys the bread; the employee, who bakes the bread; and the shareholder, who puts up the funds to fire the ovens and buy in the wheat. The shareholder cannot eat his money; the employee has no funds to stoke the ovens; the customer has no bakery to bake his own bread. That is why they are all stakeholders, and that is why they must all be treated the same, because their quest is the same: the survival of all, in order to assure the survival of each.

As newspaper readers, we are astonished, and as tax inspectors, we are flummoxed, to follow the wily ways and intricate paths of international finance, money-laundering and mafia-funding. When I was a boy, my mother went shopping, to Mr Fearnley for the meat, Mr Carr for the medicines, Mr Meek for the greengroceries, Mr Naif for the fish and chips, Mr Hardaker for the bread, Mr & Mrs Hatfield for the newspapers. We knew who owned these businesses, like Mossop & Hobson: they stood behind the counter, welcoming us with a smile and asking what’ll it be today?, and not behind a three-stage answering service designed to fatigue us and make us shelve our queries. Now, we require ultimate beneficial owner registers, which tell us in black and white who the owners behind logo-bearing corporations are—the honest ones at least.

Folk like to be pampered. Pampering pays.

Yes, Will, but not pampering them pays just as much, nowadays.

Privatisation? The private sector? What are they, now? We privatise public assets, and the shares get bought by individuals who, within a trice, have sold on to the mega-corporations. How many shares in water, gas, electricity are owned by private persons? And how many by conglomerates and hedge funds? There is increasingly no difference now between private sector and public sector. The distinction is between the individual sector and the corporate sector, because even many assets still in the public sector are controlled, if indirectly, by vast interests of the corporate sector.

If Dwight Eisenhower was concerned at the rise of the military-industrial complex, then successive generations have done little to heed his warning. And now, we do not have a military-industrial complex, we simply have an industrial complex, and could well be on the way to simply having a military one. The world has in its time been up in arms at dictatorships and coups and communists, and, with a hard fight, they have been quelled—or so we thought. Now people are up in arms at corporations. So, what are they doing about that? Well, if M&A deals got us to where we are now, then looking at how to prevent the worst aspects of M&A deals would seem to be a good place to start. For there are two ways to vanquish armies: one is to kill them; and the other is to steal their bullets.

And that is why companies must fundamentally be prohibited from owning companies. It can easily be done: An act to prohibit the ownership of corporate shares by corporate entities. Let the profits be disbursed to the private individual shareholders, and taxed in their hands, as all other earnings are taxed: it is ultimately people that companies are there for, isn’t it? Then, if they want to buy another company, let them, with the taxed earnings that they now hold. It is that simple. We can stop foreign entities from buying our companies; what, then, prevents us from stopping domestic entities from doing so too?

It’s not communism, because it’s not a proposal to put corporations into the ownership of the state: what the communist seeks for his creed, the capitalist seeks for his greed, whereby state control and oligarchy are but two sides of the same coin; no, it’s democratic capitalism: companies getting special treatment, but only in their direct relationship to private individual shareholders.

Just before I finish, there is one sort of union that involves more than two people—preferably as many as can be mustered. And that is the kind of union that may yet grow to force this kind of legislation; and only workers can join.

Nevertheless, Eisenhower’s stated warning failed, perhaps because Eisenhower failed to state the urgency of his warning. We do not want to kill the enemy army: that is unconscionable. Therefore, we need to steal their bullets. If not, they will shoot them—figuratively at first; and, if that won’t work, they will shoot them literally, just like United Fruit did in Columbia.

One thing’s not so simple: do it now, before the take-over, before it’s too late and our grasp of the tiller has been lost. It’s Hobson’s choice, because, unlike Maggie and Will, no company that’s gotten too rich and proud is just going to sit down quiet and take a long look at any brass ring to know the truth about itself.