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Imperial Business in Africa Part II. Interpretations

Published online by Cambridge University Press:  22 January 2009

A. G. Hopkins
A. G. Hopkins
Affiliation:
C.W.A.S., University of Birmingham
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Extract

This article, which is in two parts, aims to establish expatriate business history as a necessary and important part of modern African history. Part I surveyed approximately fifty histories of European companies in West, Central and East Africa during the colonial period and drew attention to newly-discovered and little-known records. Part II begins by assessing the quality of the studies listed in Part I, and suggests ways in which the level of scholarship can be raised to meet standards set by professionally-written business history. The article then formulates and explores a number of propositions concerning the spatial distribution and changing size, structure, strategy and performance of expatriate business in Africa. It is argued that many of these propositions cut across established but inadequately supported views, and that the development of business history has wider implications for the study of the colonial history of Africa.

Type
Research Article
Information
The Journal of African History , Volume 17 , Issue 2 , April 1976 , pp. 267 - 290
Copyright
Copyright © Cambridge University Press 1976

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References

1 Research for this article is a contribution to a larger project, directed by the Graduate Institute of International Studies at Geneva with financial support from the Gulbenkian Foundation, on historical aspects of current development problems in Africa.

2 Davies, W. T., Fifty Years of Progress: an Account of the African Organization of the Imperial Tobacco Company (Bristol, 1958)Google Scholar; Turner, G. W. Eaton, A Short History: Ashanti Goldfields Corporation Ltd., 1897–1947 (London, 1947).Google Scholar

3 Davies, , Fifty Years of Progress, 7.Google Scholar

4 Pedler, Frederick, The Lion and the Unicorn in Africa: a History of the Origins of the United Africa Company, 1787–1931 (London, 1974).Google Scholar

5 ‘The History of the United Africa Company’, (1938), Unilever Archives.

6 Rankin's study contains about 90,000 words; Pedler's book has about 130,000 words. His thirty-three references to Rankin are an inadequate guide to the degree of overlap which exists. Pedler's account of the formation of U.A.C., for instance, includes four paragraphs on pp. 298–9 which appear to be taken from Rankin's manuscript (112–3), though this has not been indicated.

7 For a more favourable comment on The Lion and the Unicorn in Africa see the review by Bland, David in Econ. Hist. Rev. xxviii (1975), 733.CrossRefGoogle Scholar

8 Pedler's first career was in the Colonial Office. He served in Tanganyika in the early 1930s, and then became associated with Lord Hailey at a time when the celebrated and influential An African Survey (1938) was being prepared. During World War II he undertook an important mission in the Belgian Congo before becoming the chief British economic representative in French West Africa. In 1944 Pedler returned to London to take charge of the Finance Department of the Colonial Office. His second career (with U. A.C.) began in 1947. His twenty-one years with the firm witnessed profound changes in commercial structure and activities and also in the political attitudes of expatriate businessmen.

9 ‘An Economic History of the Ghanaian Diamond Mining Industry, 1919–1973’, unpubl. Ph.D. (Birmingham, 1975).Google Scholar

10 ‘L'impact des intérêts coloniaux: S.C.O.A. et C.F.A.O. dans L'Ouest Africain’, J. Afr. Hist. xvi (1975), 595–621. See also the same author's earlier work, Le Congo au temps des grandes concessionaires, 1899–1930 (Paris, 1972).

11 Ideally, too, oral testimony should be recorded, especially in the case of family firms which have failed to preserve their early records.

12 The best short guide is Barker, T. C., Campbell, R. H. and Mathias, P., Business History, Historical Association Pamphlet 59 (London, 2nd edn. 1971)Google Scholar. Recent examples of histories of large British-based organizations include Coleman, D. C., Courtaulds: an Economic and Social History, 2 vols. (Oxford, 1969)Google Scholar; Alford, B. W. E., W. D. & H. O. Wills (London, 1973)Google Scholar; Reader, W. J., Imperial Chemical Industries: A History, 2 vols. (London, 1970 and 1975)Google Scholar. On a neglected industry see Supple, Barry, The Royal Exchange Assurance: a History of Business Insurance, 1720–1970 (Cambridge, 1970)Google Scholar, and for a study of a family firm, and one moreover which is not simply a success story, see Church, R. A., Kenricks in Hardware: a Family Business, 1761–1066 (Newton Abbot, 1969).Google Scholar

13 For a sensitive appreciation of the difficulties facing authors who become involved in writing company history, see Mathias, P.'s review of Wilson, Charles's Unilever, 1945–1965 (London, 1968)Google Scholar in Business History xii (1970), 66–9. For a forthright declaration of an intention to tell the story, ‘warts and all’, see Coleman, D. C.'s Preface to his Courtaulds: an Economic and Social History, vol. 1 (Oxford, 1969).Google Scholar

14 See, for instance, D. C. Coleman's critical comments on Alford, B. W. E.'s W. D. & H. O. Wills (London, 1973)Google Scholarin Econ. Hist. Rev. xxvii (1974), 324.

15 Barker, T. C., ‘Business History and the Business Man’, Business History, i (1958), 16–20CrossRefGoogle Scholar, and Supple, B. E., ‘American Business History—a Survey’Google Scholar, ibid. I (1959), 63–76. British historians took their cue largely from developments in North America, notably at Harvard, where professional business histories had been sponsored since the 1920s and 1930s. A booklet by one of the pioneers, Gras, N. S. B., is still well worth reading: Are You Writing a Business History? (Boston, 1947).Google Scholar

16 With a section on business accounts by Yamey, B. S.. Historical Association Pamphlet 59 (London, 2nd edn. 1971).Google Scholar

17 See Supple, B. E., ‘The Uses of Business History’, Business History, iv (1962), 81–90CrossRefGoogle Scholar, and the whole of issue 1 of the Business History Review, xxxvi (1962), 11–106. Tucker, K. A., ‘Business History: Some Proposals for Aims and Methodology’, Business History, xiv (1972), 1–16CrossRefGoogle Scholar, argues a strong and some may think rather extreme case for separating description from analysis. (It is possible to agree with his plea for a more rigorous approach while at the same time maintaining that this does not rule out an organizational structure which combines narrative and analysis.)

18 In contrast to the emphasis of Robinson, Ronald and Gallagher, John with Denny, Alice, Africa and the Victorians: the Official Mind of Imperialism (London, 1961)Google Scholar. On the unofficial mind of imperialism see Hopkins, A. G., ‘Economic Imperialism in West Africa: Lagos, 1880–92’, Econ. Hist. Rev. xxi (1968), 580–606.Google Scholar

19 Smith Mackenzie (1877) was descended from the Indian-based firm of Mackinnon Mackenzie (1847). William Mackinnon also formed the British India Steam Navigation Co. (1862). For some additional ‘Indian’, connexions with East Africa see note 30 below.

20 The forward movements noted in this paragraph were of course extensions of business interests which were already present to a greater or lesser degree. My concern here is with major changes in the location of expatriate frontiers and not with their origins.

21 I am grateful to Peter Greenhalgh for this piece of information.

22 I cite this example because there is a particularly revealing account of the territorial distribution of Nigerian commerce in a minute by T. F. Burrows, 6 Nov. 1916, CO. 583/54

23 See. for example, Newlyn, W. T. and Rowan, D. C., Money and Banking in British Colonial Africa (Oxford, 1954), 16–17Google Scholar, and Pearson, D. S., Industrial Development in East Africa (Nairobi, 1969), 154.Google Scholar

24 The present Managing Director of Baumann & Co. records that ‘at various times between 1926 and 1963 the company endeavoured to establish itself in Brazil, South Africa, Portuguese East Africa and the Belgian Congo, but none of these ventures was successful’. I am grateful to Mr J. N. A. Hobbs of Steel Brothers & Co. Ltd., for a copy of this memorandum written by Mr J. M. Smith in 1969.

25 A substantial proportion of the coffee and sisal produced by expatriates in East Africa was shipped on consignment to London merchant banks, notably Arbuthnot Latham and John K. Gilliat, which financed growers and marketed their crops. This arrangement, which was of little importance in West African trade, recalls the way in which Caribbean plantations were financed in the eighteenth and nineteenth centuries. (Indeed, Arbuthnot Latham & Co., which was founded in 1833, also had interests in Jamaica.)

26 It is interesting to note that when U.A.C. entered East African commerce its efforts were directed towards African-grown produce, partly because this made use of its West African experience (even though the staples were different), and partly because it was much harder to break into the trade in expatriate-grown crops.

27 For one interpretation, and references to others, see Hopkins, A. G., An Economic History of West Africa (London, 1973), ch. 4.Google Scholar

28 See Atmore, A. and Marks, S., ‘The Imperial Factor in South Africa in the Nineteenth Century: Towards a Reassessment’, Jour, of Imperial and Commonwealth Hist, iii (1974), 122Google Scholar. A move in the direction advised by Atmore and Marks has been made by Phimister, I. R., ‘Rhodes, Rhodesia and the Rand’, Jour, of Southern African Stud. 1 (1974), 74–90CrossRefGoogle Scholar. As yet, however, no serious attempt has been made to apply Blainey's theory to South Africa. See Blainey, G., ‘A Theory of Mineral Discovery: Australia in the Nineteenth Century’, Econ. Hist. Rev. xxiii (1970), 298–313CrossRefGoogle Scholar. See also the discussion by M. J. Morrissey and R. Burt (and Blainey's reply) in ibid., xxvi (1973), 497–509.

29 Thus Sanderson, following Gallagher and Robinson, regards sub-imperialism in East Africa as being of little importance. See Sanderson, G. N., ‘The European Partition of Africa: Coincidence or Conjuncture?’, Jour, of Imperial and Commonwealth Hist. iii (1974), 16Google Scholar and n. 60. My argument here is that the second partition needs to be reconstructed in its own (business) terms before the role of expatriate firms in the ‘scramble’, for Africa can be evaluated.

30 It is interesting to observe that these influences operated at an intercontinental level as well as within colonies. For instance, losses suffered at the hands of the Japanese during World War II, combined with political uncertainties at the time of India's independence in 1947, encouraged the British firm of Steel Bros., which had major interests in India and Burma dating from 1870, to diversify into East Africa. In 1948 Steel Bros, acquired a minority holding in Baumann & Co.; in 1967 Baumann bought Leslie & Anderson (East Africa) Ltd.; and in 1970 Baumann became a subsidiary of Steel Bros. In the tradition of Smith Mackenzie, Baumann & Co. and Leslie & Anderson entered East African trade in the 1920s, having previously traded to India. See Steel's House Magazine, Dec. 1973, 44–5, and Braund, H. E. W., Calling to Mind: An Account of the First Hundred Years of Steel Brothers and Company Limited (Oxford, 1975)Google Scholar. I am indebted to Mr J. N. A. Hobbs of Steel Brothers for both these references.

31 See Bauer, P. T., West African Trade (Cambridge, 1954).Google Scholar

32 For a good summary of the corporate revolution (followed by a case study) see Eichner, Alfred S., The Emergence of Oligopoly: Sugar Refining as a Case Study (Baltimore, 1967)Google Scholar. On the merger movement in the U.K. see Payne, P. L., ‘The Emergence of the Large-Scale Company in Great Britain, 1870–1914’, Earn. Hist. Rev. xx (1967), 519–42Google Scholar, and Leslie Hannah, ‘Managerial Innovation and the Rise of the Large-Scale Company in the Interwar Britain’, ibid., xxvii (1974), 252–70.

33 I follow here the formula suggested by Chandler, Alfred's study of large firms in the United States: Strategy and Structure: Chapters in the History of the Industrial Enterprise (Cambridge, Mass., 1962)Google Scholar. See also Penrose, E. T., The Theory of the Growth of the Firm (Oxford, 1959).Google Scholar

34 Flint, John, Cecil Rhodes (Boston, 1974), 249.Google Scholar

35 Blake, George, B. I. Centenary, 1856–1956 (London, 1956), 176.Google Scholar

36 On the important changes which were taking place in business management and accounting in the late nineteenth and early twentieth centuries see Jenks, L. H., ‘Early Phases of the Management Movement’, Admin. Science Quarterly, v (1960), 421–47CrossRefGoogle Scholar, and Parker, R. H., Management Accounting: an Historical Perspective (London, 1969)Google Scholar, and for earlier developments Pollard, S., The Genesis of the Modern Management Movement (London, 1965).Google Scholar

37 Marshall's view that an enterprise would eventually decline with the increasing senility and eventual death of its founder is now regarded as the least impressive part of his major contribution to the neo-classical theory of the firm.

38 There is a vast literature on theories of the firm. Recent surveys containing good bibliographies include Child, John, The Business Enterprise in Modern Industrial Society (London, 1969)Google Scholar, Cyert, Richard M. and Hendrick, Charles L., ‘Theory of the Firm: Past Present and Future’, Jour, of Econ. Literature, x (1972), 398–412Google Scholar, and Hawkins, C. J., Theory of the Firm (London, 1973).CrossRefGoogle Scholar

39 See particularly Bauer, P. T.'s West African Trade (Cambridge, 1954).Google Scholar

40 The term is Simon, H. A.'s and is developed in his book Models of Man (New York, 1957).Google Scholar

41 An extension of this view is the concept of the socially responsible or ‘soulful’ corporation. See Kaysen, Carl, ‘The Social Significance of the Modern Corporation’, American Econ. Rev. xlvii (1957), 311–19.Google Scholar

42 Quoted in Hirschman, Albert O., Exit, Voice and Loyalty (Cambridge, Mass., 1970), 55Google Scholar (insertion made in paperback edition).

43 A recent discussion of these questions can be found in Brown, Michael Barratt, The Economics of Imperialism (Harmondsworth, 1974), ch. 9.Google Scholar

44 As has been argued by Levitt, Kari, Silent Surrender: the Multinational Corporation in Canada (Toronto, 1970).Google Scholar

45 Two studies which come near to these questions are Slinn, Peter E., ‘The Northern Rhodesia Mineral Rights Issue, 1922–1964’, unpubl. Ph.D. (London, 1974)Google Scholar, and Southall, Roger, ‘Cadbury on the Gold Coast, 1907–1938: the Dilemma of the “Model Firm” in a Colonial Economy’, unpubl. Ph.D. (Birmingham, 1975).Google Scholar

46 Nettl, J. P., ‘Consensus or Elite Domination’, Pol. Stud, xiii (1965), 22–44.CrossRefGoogle Scholar

47 Compare the extensive information gathered by Suret-Canale, Jean in Afrique noire de la colonisation aux indépendences,1945–1960 (Paris, 1972), 305–92Google Scholar, with Faber's analysis of the problem of drawing conclusions about the distribution of power from evidence regarding interlocking directorships in Faber, M. L. O. and Potter, J. G., Towards Economic Independence: Papers on the Nationalisation of the Copper Industry in Zambia (Cambridge, 1971), ch. 2.Google Scholar

48 Finer, S. E., ‘The Political Power of Private Capital’, Sociological Rev. iii (1955), 279–94CrossRefGoogle Scholar. See also Gamson, W. A., Power and Discontent (New York, 1968), ch. 4.Google Scholar

49 It is strange that recent publications on the ‘political economy’, of colonial Africa have failed to deal adequately with these questions. Even Brett's, E. A.Colonialism and Underdevelopment in East Africa (London, 1973)Google Scholar, which is the most thorough study of its kind, has deficiencies in this respect. This may be the result of an over-reaction against pluralist models of power and pressure group analyses, or it may be simply a failure to enquire fully into the history of expatriate firms in Africa.

50 See Tucker, Robert W., The Radical Left and American Foreign Policy (Baltimore, 1971)Google Scholar, and Hudson, Michael, Super Imperialism (New York, 1972).Google Scholar

51 I use this mnemonic to represent a general view of which a particular expression has been cited above, 268.

52 Similarly, I have taken the liberty of using André Gunder Frank's name to represent the extreme pessimism of the view that all contact between the developed and the under developed countries is to the disadvantage of the latter. For a representative collection of his writings, many of which are very interesting, see his Latin America: Underdevelopment or Revolution (New York, 1969), and for a comment on the spread of his ideas to Africa see Hopkins, A. G., ‘On Importing André Gunder Frank into Africa’, African Economic History Review, 11 (1975), 13–21.CrossRefGoogle Scholar

53 Pedler, Frederick, The Lion and the Unicorn in Africa (London, 1974), 284.Google Scholar

54 Suret-Canale, Jean, Afrique noire de la colonisation awe indépendences, 1945–1960 (Paris, 1972), 305–92.Google Scholar

55 Wilson, Charles, Unilever, 1945–1965 (London, 1968), 115.Google Scholar

56 See Tucker's, Robert W. criticism of Magdoff's, H.The Age of Imperialism (New York, 1970)Google Scholar in The Radical Left and American Foreign Policy (Baltimore, 1971), 128.

57 We enter here into matters of great technical complexity, as readers of Reddaway's, W. B.Effects of U.K. Direct Investment Overseas (Cambridge, 1967 and 1968)Google Scholar will be aware. Helpful introductions to the problems summarized in this paragraph are Etor, J. R., ‘Some Problems in Accounting History, 1830–1900’, Bus. Archives, xxxviii (1973). 38–46Google Scholar; Sizer, John, An Insight into Management Accounting (Harmondsworth, 1969)Google Scholar; Parker, R. H., Management Accounting: an Historical Perspective (London, 1969)Google Scholar; the same author's Understanding Company Financial Statements (Harmondsworth, 1972); and Lee, G. A., ‘The Concept of Profit in British Accounting’, Bus. Hist. Rev. xlix (1975), 6–36CrossRefGoogle Scholar. I am grateful to Andrew Piper, Department of Accounting, University of Birmingham, for discussing some of these issues with me.

58 Coquery-Vidrovitch, Catherine, ‘L'impact des intéreĉ;ts coloniaux: SCOA et CFAO dans L'Ouest Africain, 1910–1965’, J. Afr. Hist, xvi (1975), 595–621.CrossRefGoogle Scholar

59 Greenhalgh, Peter, ‘An Economic History of the Ghanaian Diamond Mining Industry, 1919–1973’, unpubl. Ph.D. (Birmingham, 1974), 157.Google Scholar

60 Gouverneur, J., Productivity and Factor Proportions in Less Developed Countries: the Case of Industrial Firms in the Congo (Oxford, 1971), 147–8, 151–3Google Scholar. Gouverneur himself makes little comment on these figures.

61 Ehrlich, Cyril, The Uganda Company Limited: the First Fifty Years (Kampala, 1953).Google Scholar

62 Greenhalgh, Peter, ‘An Economic History of the Ghanaian Diamond Mining Industry, 1919–1973’, unpubl. Ph.D. (Birmingham, 1974).Google Scholar

63 Hostelet, Georges, L'oeuvre civilisatrice de la Belgique au Congo de 1885 à 1953 (Bruxelles, 1954), vol. 2, 27–32.Google Scholar

64 Frankel, S. Herbert, Investment and the Return to Equity Capital in the South African Gold Mining Industry, 1887–1965 (Oxford, 1967)Google Scholar. These results are summarized in the same author's Gold and International Equity Investment, Hobart Paper No. 45 (London, 1969). Frankel's figures are internal rates of return and are not strictly comparable with the other percentages quoted here.

65 See Anstey, Roger, ‘The Volume and Profitability of the British Slave Trade, 1761–1807’, in Engerman, Stanley L. and Genovese, Eugene D., eds., Race and Slavery in the Western Hemisphere: Quantitative Studies (Princeton, 1975), 3–31.Google Scholar

66 These are clearly shown in the studies referred to in notes 58, 59 and 60 above, but are disguised in my summary presentation of these studies.

67 Notably Cadbury, concession-holding firms in French Equatorial Africa, several of the firms which became part of U.A.C. in 1929, and the South African gold mines.

68 Hirschman, Albert O., Exit, Voice and Loyalty (Cambridge, Mass., 1970), ch. 5.Google Scholar

69 This point is developed in Hopkins, A. G., ‘Innovation in a Colonial Context: African Origins of the Nigerian Cocoa-Farming Industry, 1880–1920’, in Dewey, C. J. and Hopkins, A. G., eds., The Impact of Imperialism: Studies in the Economic History of Africa and India (London, forthcoming 1976).Google Scholar