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Quaker Capitalism

 Last Fall, while driving, I heard an interview with Deborah Cadbury, author of Chocolate Wars: The 150-Year Rivalry Between the World’s Greatest Chocolate Makers on the Diane Rehm Show. I found it it a fascinating conversation. I would suggest that  you listen to the interview, but if you're on a bandwidth-restricted diet like me, you can read a transcript. Here's an excerpt:

SUSAN PAGE:  Now you talked about Quaker capitalism. What does that mean?

DEBORAH CADBURY: Well what I found amazing and I suppose one of the reasons why I started to write the book and you know seeing in the credit crunch one business after another collapsing with the owners sort of walking away with vast payouts and no sense of responsibility for the company it made me really feel what's missing and it just took me back to the stories my father had told me about the Quaker business. Because really what the Quakers were trying to do was apply Christian values to their business and it led to some things that we would feel were bizarre today.
You know it just doesn't tally with the way business is conducted in Wall Street and the city now. The idea that wealth creation was only for personal gain was seen as really shameful. Everyone was meant to benefit. Reckless or irresponsible debts were seen as shameful. These really stern Quaker directives said that no man was to venture into worldly business beyond what he can manage honorably so he can keep his words with all men.
Even advertising was seen as dishonest which seems bizarre but you know it was seen as puffery and elevating the message above the product so very austere rules governed it.

PAGE: Now you during your childhood Cadbury was the largest confectioner in the world but in the late 2009 Kraft mounted a hostile takeover of Cadbury and acquired it. So has that affected that long-standing ethos in the Cadbury company?
CADBURY: I think it's too early. We're going to have to wait and see because what we show essentially over the book by following the story of four generations of Cadbury brothers and their rivals we see what happened to these Quaker values and how hard it was to sustain as business rivalry became more intense. So effectively we see a transition from what I call Quaker capitalism which I suppose is loosely defined as a business where all the stakeholders have to be considered, the workforce, the community and society at large.
To our modern form of shareholder capitalism, global shareholder capitalism of which Kraft and indeed Cadbury in its final form were a part and you know we see the transition and we see the gains and losses and there is some quite distinctive features of that Kraft takeover which highlight the contrast.

PAGE: What are those?

CADBURY: Well I suppose what struck me was the changing notion of ownership. You know those Quaker stewards were constantly building long-term value for their business. That was what they were all about as owners whether it was creating a new brand like Dairymilk or whether it was investing in the Bourneville factory. Now by the end of Kraft's bid which took six months hedge funds owned 30 percent of Cadbury. So you had this curious situation which happens in today's business world where people who hadn't owned the company a few weeks earlier and had no intention of owning the company Cadbury a few weeks later, were in a position to determine whether or not it survived and they were prepared to do that for just 20p profit if they bought in at 8 pounds they'd sell for 8 pound 20.




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