For Profit

A History of Corporations


By William Magnuson

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A history of how corporate innovation has shaped society, from ancient Rome to Silicon Valley 
From legacy manufacturers to emerging tech giants, corporations wield significant power over our lives, our economy, and our politics. Some celebrate them as engines of progress and prosperity. Others argue that they recklessly pursue profit at the expense of us all.
In For Profit, law professor William Magnuson reveals that both visions contain an element of truth. The story of the corporation is a human story, about a diverse group of merchants, bankers, and investors that have over time come to shape the landscape of our modern economy.  Its central characters include both the brave, powerful, and ingenious and the conniving, fraudulent, and vicious. At times, these characters have been one and the same.
Yet as Magnuson shows, while corporations haven’t always behaved admirably, their purpose is a noble one. From their beginnings in the Roman Republic, corporations have been designed to promote the common good. By recapturing this spirit of civic virtue, For Profit argues, corporations can help craft a society in which all of us—not just shareholders—benefit from the profits of enterprise.




IN 215 BC, EMPIRES WERE AT WAR. ROME AND CARTHAGE, THE two great powers of the Mediterranean, were locked in a fierce struggle for survival. The epic conflict spanned from the shores of Spain to the land of Greece to the sands of Tunisia. It swept in the peoples of Gaul, Numidia, Macedon, and Syracuse. The winner would lay claim to vast swathes of Europe, Africa, and Asia. The loser could well be wiped from the face of the earth. It was nothing less than a contest for the future of the Western world.

The war had raged for decades, but now, under the leadership of Hannibal, the Carthaginian general and military genius, Carthage found itself on the verge of victory. In 218 BC, in a risky maneuver, Hannibal had crossed over the Alps into Italy at the head of an enormous army of heavy infantry, cavalry, and elephants. He quickly defeated a succession of Roman armies rushed into the field to meet him. At the Battle of the Trebia and then the Battle of Trasimene, he inflicted lopsided defeats on the Roman Republic, with minimal losses to his own army. And then, in his most shocking victory yet, at the Battle of Cannae, he defeated the largest army that the Roman Republic had ever assembled, a massive force of eighty-six thousand men. Roman losses were enormous, with an estimated seventy-six thousand killed and ten thousand captured. Twenty percent of Rome’s men of military age died in a single day of fighting, including eighty of the republic’s three hundred senators. Afterward, Hannibal roamed freely through southern Italy, ravishing the countryside, scouring its fields, and raising troops from its towns. Rome’s allies, seeing the tides turning in favor of Carthage, defected in droves. Things looked dire for the young republic.

The story of how Rome recovered from these defeats to drive Hannibal from Italy and eventually destroy his army is familiar to any student of ancient history. The Romans adopted the famed “Fabian strategy,” avoiding the large, set battles that had so decimated their forces in prior combat and instead engaging only in small skirmishes, prolonging the war and requiring Hannibal and his army to remain in the field and away from home indefinitely. The talented Roman commander Scipio Africanus won major battles in Spain against Carthaginian forces and then, instead of confronting Hannibal in Italy, set sail for Africa, where he threatened the city of Carthage itself. Hannibal, forced to leave Italy to defend his homeland, eventually suffered defeat by Scipio at the Battle of Zama.

Less well known in this affair is the role of capitalists in allowing Rome to keep the war effort alive. In 215 BC, with Hannibal on the loose in Italy, Publius Cornelius Scipio (the father of Scipio Africanus) wrote to the Senate from Spain with bad news. His armies were desperately short of supplies, and he could neither pay nor feed his troops for much longer. If Rome did not send him provisions soon, he wrote, he would lose both his army and all of Spain. But with the Roman treasury nearly empty, the Senate could not afford to provide him what he needed. As a last resort, the Senate made a desperate plea to the people of Rome: if citizens would supply Scipio’s troops with clothes, grain, and equipment out of their own pockets, they would be repaid from the Roman treasury when it was replenished. In response, three companies (or societates, in the original Latin), consisting of nineteen men in total, came forward and agreed to supply the necessary provisions. In return, they asked only that they be exempted from military duty and that, if they lost their cargoes at sea, either from storms or enemy action, they be reimbursed for the loss (the fact that they did not ask for a similar guarantee for their cargoes on land suggests that the famed Roman roads were well protected). The Senate agreed to their terms.

The companies followed through on their promise. Livy wrote in his History of Rome, “As all the supplies were magnanimously contracted for, so they were delivered with great fidelity, and nothing was furnished to the soldiers less generously than if they were being maintained, as formerly, out of an ample treasury.” With provisions in hand, Scipio and his brother were able to go on the offensive. They defeated the forces of Hasdrubal, Hannibal’s brother, in several pitched battles, a string of victories that convinced “almost all of the people of Spain” to defect from the Carthaginians and ally themselves with the Roman Republic. Livy wrote that the affair served as a testament to the virtue of the Roman citizenry, noting that the private companies that stepped in to supply the army did so not out of a base desire for profit but out of a sense of duty to their country. “This character and love of country,” Livy said, “uniformly pervaded all ranks.”1

But setting aside what the affair says about the character of Roman citizens, the incident also sheds light on another important feature of the Roman world: the power of its economy and its private enterprise. The very fact that a group of just three companies could provide the necessary supplies for the armies of Publius Cornelius Scipio in Spain suggests that these companies were sizeable businesses. They must have had access to capital, grain, clothing, ships, seamen, and much more. They must have been well established in the fabric of Roman society if the Roman Senate thought to offer up the contracts to them. And their intervention changed the course of the war.

It was a remarkable moment in the history of the Roman Republic. The government, teetering on the edge of collapse, had been bailed out by a group of powerful Roman companies. And so, as Livy wrote, for a time during one of the most serious of crises, “the Republic was carried along by private money.”2

TODAY, WE DEFINE a corporation as a business entity that possesses a particular set of traits. It has shareholders. It lasts for an indefinite period. It grants its owners limited liability. It is treated like a person—at least insomuch as it is empowered to transact and be bound on its own account. And, as Supreme Court Justice Anthony Kennedy famously explained in his decision in Citizens United v. Federal Election Commission, corporations even have a constitutional right to freedom of speech. Corporations are instantly recognizable by their names—they end in “Inc.,” “Corp.,” or “Co.,” or some variation thereof.

The Roman corporation, though, looked substantially different. It dealt exclusively in government contracts, handling things like building roads, collecting taxes, and supporting the army. It was run by a single social class—the Roman knights. Not all of its owners had their personal assets protected from liability. And it was notoriously warlike. Its executives were often accused of lobbying for new Roman conquests.

But the legacy of the Roman corporation tells us something about why corporations have persisted and why they possess the form they do today. The Roman state and the Roman corporation were close partners in a grander project: building a prosperous and flourishing society. The Roman Republic granted corporations special rights and privileges in return for their services to the republic. The relationship was mutually beneficial. The privileges increased the efficiency and stability of business enterprise, which could, in turn, serve the state more efficiently and reliably.

In De monarchia, Dante Alighieri wrote of the Romans, “That holy, pious and glorious people, repressed all greed that is harmful to the community, preferring universal peace and liberty; so much so that they seem to have sacrificed their own advantage in order to secure the general well-being of mankind.” Dante, genius that he was, got it wrong here. The Romans, throughout their history, exhibited a consistent and sometimes astonishing appetite for wealth and opulence, on the one hand, and violence and cruelty, on the other. Rome’s greatest conqueror, Julius Caesar, once accepted the surrender of a rebellious town in Gaul and proceeded to cut off the hands of every male of military age he found inside. Rome’s wealthiest man, Marcus Licinius Crassus, created a private firefighting department that would show up at burning houses and refuse to extinguish the fire until the owner had sold him the house for pennies. Rome’s most prominent statesman, Cato the Elder, witnessed the growing prosperity of the neighboring city of Carthage and ever after concluded his speeches, whatever the topic, with the phrase Carthago delenda est—Carthage must be destroyed. Dante’s belief that Rome had repressed all greed and sacrificed itself for the general well-being of mankind required a supreme act of imagination.3

At the same time, Dante’s opinion of ancient Rome gets at an important truth—one that is often overlooked. While the Romans may not have eliminated greed or acquisitiveness, they were keenly aware of the importance of mobilizing it for the public good. Indeed, the connection between business and government in the Roman Republic is so close that, at some points in history, the distinction vanishes entirely, as it did during the events of the Second Punic War when, as Livy wrote, the state was only continued through private funds. Business always played an integral role in Roman warfare, both in prosecuting it and, sometimes, in instigating it. Over time, this relationship between private business and public government led Rome to develop elaborate and sophisticated mechanisms for allowing businesses to seek their own profits in a way that also benefited the empire itself. We owe everything to the Romans, from our language, to our government, to our laws. It should come as no surprise, then, that we also owe to them the idea of a corporation.

The role of corporations in the Roman Republic is a subject of some debate. For one, there is always a problem with using modern terms to describe ancient phenomena. Were Roman societates the same thing as corporations of the modern era? Certainly not. There were no secretaries of state around to issue certificates of incorporation or extensive business codes regulating securities offerings, shareholder lawsuits, and director duties. But did Roman societates bear many of the core features of what we now would call a corporation? It appears so, particularly in the case of a special kind of societas called a societas publicanorum (more on them in a bit). A second issue relates to the structure and function of Roman business. Some scholars read the evidence we have from Roman writers as suggesting that ancient Rome had a large and active stock market, in which the shares of Roman companies could be traded among the public much like on a modern-day stock exchange. Others disagree, arguing that these scholars have exaggerated the available evidence. This book will not settle these debates, but it is worthwhile to keep in mind that substantial disagreement exists on these and other important facts about the economic life of ancient Rome.4

With that noted, we can now turn to what we do know about what Roman enterprise looked like.

FROM ITS MYTHICAL FOUNDING BY THE TWIN BROTHERS ROMULUS and Remus in 753 BC to its transition to an empire under Augustus in 27 BC, ancient Rome never developed the trappings of a large government. This is a striking fact. Despite growing from a small village on the banks of the Tiber to a sprawling world power ruling territories from the plateaus of Spain to the coasts of Syria, from the deserts of the Sahara to the shores of France, the Roman Republic operated with only the smallest of bureaucracies and a mere handful of civil servants. Government was mostly run by the exertions of Roman senators and a few of their designated officials. Without a body of civil administrators devoted to managing the many everyday tasks that the republic increasingly required, a question arose. How could the Roman Republic govern its rapidly expanding imperium? While a definitive answer was never established until the republic was replaced with the empire and its expansive imperial administration, one piece of the puzzle was the growing use of private enterprise to perform the duties of government, particularly through what became known as the societas publicanorum.

Societas publicanorum literally means “society of publicans.” So who were these publicans? For Christians, the name has a decidedly negative connotation. The Bible mentions publicans numerous times and never in a positive light. The apostle Luke, for example, tells a story of Jesus meeting a publican named Levi and eating a great feast at his house, alongside many other publicans. The Pharisees, seeing Jesus in the company of the publicans, asked him, “Why do ye eat with publicans and sinners?” Jesus replied, “They that are whole need not a physician; but they that are sick. I came not to call the righteous, but sinners to repentance.” Publicans and the idea of sin have ever after been closely linked.5

But Romans living in the Roman Republic viewed publicans quite differently. The publicans were a respected and even revered class within Roman society for much of the existence of the commonwealth. Their very name suggests their close connection to the state: publica means “public,” and res publica, “public thing” or “republic.” The publicani themselves were government contractors—that is, private citizens who negotiated with the government to perform public duties. Since there was no large government bureaucracy to do so, the republic depended heavily on publicans to keep the state running.

The publicans emerged very early in the existence of the Roman Republic. Blackstone even claimed that the mythical Roman king Numa Pompilius first created them. But the first historical mention of publicans appears in the work of Dionysius of Halicarnassus, who wrote that in 493 BC the Roman government entered into contracts with private parties for the building of temples to honor the Roman gods Ceres, Liber, and Libera (the so-called Aventine Triad of the deities of agriculture and fertility). Pliny wrote that publicans were responsible for providing horses for the circus, as well as feeding geese on the Capitoline hill. (Feeding geese may not sound like much, but it would have been considered a deeply important and even reverent act in the Roman Republic, for geese had warned the Romans of an impending attack of the Gauls during their sacking of the city in 390 BC.)6

By the third century BC, the publicans had become firmly entrenched in the operation of the Roman state. During the Second Punic War, for example, they were sufficiently organized to lobby the Roman government as a group, seeking to extend their contracts for the restoration of temples and the provision of chariot horses. But their business ranged much wider by then. They both provided services and supplies to the public (opera publica et sarta tecta) and developed public property like mines and quarries (ager publicus). Indeed, if we marvel at the ingenuity of Roman cities, it is largely due to the works of the publicans: they constructed and maintained nearly everything a Roman would have seen on a walk around town, including streets, city walls, temples, markets, basilicas, statues, theaters, aqueducts, public sewers, and the circus. And of course, the military victories of the Roman legions owed much to the publicans, who supplied the Roman army with food, clothes, horses, and equipment even after the terrors of Hannibal.7

But the publicans became most famous for a slightly seedier side of their business: collecting taxes. Tax collection was a significant source of revenue for the publicans, and they became closely associated with the practice. Indeed, many translators render the term publicanus as simply “tax collector” or “farmer of the revenue.” The idea of tax farming is unfamiliar to many today, but it was widely practiced in the ancient world. In Rome, it was an essential (perhaps the essential) means of funding the Roman state. As Caesar said, “There were two things which created, protected, and increased sovereignties—soldiers and money—and these two were dependent upon each other.” There were many different forms of taxation in the Roman Republic, but as a general matter, the conquered territories bore the brunt of Roman taxes. These taxes could be high. In Sicily and Asia, for example, farmers were required to hand over 10 percent of their agricultural production every year. Whenever a new province was added to Rome’s jurisdiction, either through conquest or annexation, it became subject to Rome’s tax. But since the Roman Republic did not have a large administrative state, it did not have the capacity to enforce and collect the taxes owed to it, and the problem only grew as the Roman imperium expanded across the continent. The Senate resolved this problem by turning to tax farming. Under this system, instead of collecting the taxes directly, Rome would auction off the right to collect taxes to private enterprises, and then these enterprises would collect the taxes for their own profit.8

The process of auctioning off tax-collecting rights was a formalized affair. Auctions were held in the Roman Forum and managed by the Roman censor (a magistrate in charge of the census and, importantly for our purposes, government finances). The auctions were required by law to take place in public, before the people of Rome, in order to make the process open and transparent. Roman censors would set forth the terms and conditions of the contract ahead of time and then offer up the contract for bidding. The heads (or manceps) of the various societates in attendance would raise their hands if they were willing to pay the steadily increasing auction price. At the end of the auction, the winning company would then be obligated to pay a fixed sum to the Roman treasury (sometimes up front and sometimes in installments over the course of the contract). The enterprise would, in return, have the right to go off to the province and collect taxes for its own profit from the inhabitants. This was a mutually advantageous system for the Roman Republic and the societates—although perhaps not so much for the inhabitants of the provinces themselves. The Roman treasury received a guaranteed sum and did not have to go to the trouble of administering its tax system, which it likely did not have the capacity to do in any case, given the minuscule size of its bureaucracy. The societates had the possibility of recouping their money many times over if the province proved prosperous and their collection efforts sufficiently vigorous. Over time, the societates evolved into highly specialized creatures, with certain entrepreneurs gaining a reputation as repeat players in the auctions.9

The publicans quickly became important and wealthy constituents of the Roman Republic. Their accomplishments were widely recounted in public speeches of the time. Marcus Tullius Cicero, for example, frequently lauded their role in maintaining the republic. Defending the public official Gnaeus Plancius from charges of bribery, Cicero noted that Plancius was the son of a prominent equestrian publican. “And who is there who does not know what a great assistance that body of men [that is, the publicans] is to any one in seeking for any honor? For the flower of the Roman knights, the ornament of the state, the great bulwark of the republic is all comprehended in that body.” By the time of Cicero, Caesar, and Augustus, the publicans had emerged as a potent economic and political force.10

BUT THE PUBLICANS COULD NEVER HAVE RISEN TO THE DIZZYING heights of power and wealth that they achieved in the first century BC without an important development in the structure of their business. It did not take them long to realize that they were much more powerful when they united their forces together than when they acted alone. As individual citizens, they would never have had the wealth necessary to carry on the massive projects of supplying armies and building temples. Separately, they were subject to all the circumstances of human fate—illness, injury, and death—that inhibit our ambitions. They were much more together than they were apart. Similarly, from the perspective of the Roman government, the idea of a society of publicans committed to promoting the state’s affairs was appealing. It was a problem when the death of a single publican could interrupt the provision of government services or cut off the flow of government revenue.

And so the idea of a societas publicanorum with a special collection of rights and privileges evolved. The resulting societas looked strikingly similar to a modern-day corporation. First and foremost, the societas was recognized as an entity separate and apart from its owners. This is an important difference from a typical Roman partnership, where the partners could be held responsible for anything that the other partners did. If one partner failed to pay for something on time, the other partner could lose his farm. In a societas, on the other hand, the company could negotiate and contract with others on its own behalf and not that of its owners. Because the societas was a separate entity from its owners, it could “act like a person,” as the Digest, the index of Roman law, concluded. This also meant that it could continue in existence even after the death of a member, or socius. Second, and relatedly, the societas had shares, or partes, that represented ownership interests in the company and could be bought either from other shareholders or directly from the company itself. Shares appear to have had fluctuating values as well, with Cicero writing of partes illo tempore carissimas, or shares that were at that time very expensive. Third, because many shareholders did not want to participate in the actual management of the company, the societas developed a management class devoted to running the business itself. The separation of shareholders from managers created new tensions that called for measures to regulate the relationship between the two groups. In order to ensure that the managers did not abscond with the shareholders’ money, for example, managers were required to produce public accounts (or tabulae) of the business, setting forth the company’s revenues and expenses. Indeed, there appear even to have been shareholder meetings where the managers and the shareholders could discuss the company’s affairs together.11

The hierarchy of the societas ended up looking much like that of a modern corporation too. At the head of the societas stood the manceps. As mentioned before, the manceps was the individual who directly bid on contracts for the societas. He was also obligated to provide security for the company’s contracts, typically in the form of land that he owned personally; if the company failed to fulfill its obligations, the Roman Republic could seize his land as repayment. The manceps was joined by a group of other socii, or partners, who provided capital to the company and sometimes, but not always, also offered guarantees in the form of pledged property. The socii and the manceps together created the company and registered it with the censor. The socii, like modern shareholders, did not directly run the affairs of the company and instead turned this over to the magistri, who might be compared with the board of directors of a modern corporation. These magistri were subject to annual election and were frequently replaced.12

This intricate structure allowed the societates to grow into sprawling institutions. Their revenues were enormous. One contract for togas, tunics, and horses from the second century BC amounted to around 1.2 million denarii, the equivalent of the total annual pay for ten thousand soldiers. Another contract, for the building of the Marcian aqueduct, came to forty-five million denarii, which would have equaled the wealth of Rome’s richest citizen, Marcus Crassus. With operations throughout the Roman world, from the mines of Spain to the lands of Mithridates, the societates developed fast and efficient courier systems to communicate across the thousands of miles of territory. Their couriers became so renowned for their speed and reliability that the Roman Republic at times leased them out for their own messages.13

Being a corporate executive brought with it many perks. Beyond their wealth, the managers of Rome’s corporations also held powerful positions in politics and society and, as a result, were catered to at every turn. People addressed them with the terms maximi (excellent), ornatissimi (highly honored), amplissimi (of high standing), and primi ordinis (of first rank). In an ancient version of corporate box seats, in 129 BC, the Roman Senate even passed a law reserving fourteen rows of seats at the games to the Roman equites (the class that ran the societates).14

But the benefits of the Roman societates did not accrue solely to the corporate executives. The Roman public partook in the bounties as well, partially through steady increases in state revenue and partially through direct share ownership. The budget of the Roman Republic tells the financial story in broad strokes. In the third century BC, the revenue of the Roman Republic was around four to eight million sestertii a year. By 150 BC, it had risen to fifty to sixty million sestertii. And by 50 BC, the heyday of the societates, state revenues had soared to 340 million sestertii a year. The dramatic rise in the state’s wealth allowed the Roman Republic to engage in massive public works projects on a scale never before seen—roads, temples, aqueducts, sewers, and, of course, the circuses. The people of Rome also benefited from the societates more directly by owning shares in them. In fact, it appears that shares of the societates were widely dispersed in Roman society. Polybius wrote, “There is scarcely a soul, one might say, who does not have some interest in these [government] contracts and the profits which are derived from them.” Shares of the Roman companies were traded freely among Roman citizens, typically at the Temple of Castor in the Forum. Polybius gives a sense of the breadth of the business: “Through the whole of Italy a vast number of contracts, which it would not be easy to enumerate, are given out by the censors for the construction and repair of public buildings, and besides this there are many things which are farmed, such as navigable rivers, harbors, gardens, mines, lands, in fact everything that forms part of the Roman dominion.” Modern commentators, perhaps stretching the available evidence, have concluded that Rome had a true capital market. Economic historian William Cunningham, in his classic Essay on Western Civilization, wrote, “The Forum, with its basilicae, may be regarded as an immense stock exchange where monetary speculation of every kind was continually going on.” Another commentator described the scene at the Forum in bustling terms: “Crowds of men bought and sold shares and bonds of tax-farming companies, various goods for cash and on credit, farms and estates in Italy and in the provinces, houses and shops in Rome and elsewhere, ships and storehouses, slaves and cattle.”15

But as the companies grew in size and power, so too did their potential dangers to the republic. One problem was fraud and corruption. In his


  •     —Named a Best Book of 2022 by The Economist and the Financial Times
  • “Magnuson eloquently explains how issues such as principal-agent problems, competition law and environmental and labour rights have cropped up throughout history.”—The Economist
  • “A historical tour de force.”—Bloomberg Opinion
  • "A comprehensive and lively account of eight corporations that have changed the world...A valuable, discerning assessment of these enormously influential societal actors--and a clear set of recommendations to make them serve the good."

    Shelf Awareness
  • “… I can pay Magnuson no higher compliment than to say that For Profit is a book I would be proud to have written.”
     —Martin Vander Weyer, The Spectator (UK)
  • “…For Profit is a well-written history of the corporation, an unexpectedly important topic for us all.”—Charter
  • “Brilliantly conceived and enlightening at every turn, For Profit is a thrilling history of an institution that has shaped all our lives—for better and for worse.”—Lawrence Wright, author of The Plague Year
  • “In this lively and informative history of the corporation, William Magnuson shows that corporations were born to serve the public interest—only to be used and abused time and again to maximize profits for shareholders and executives. A must-read for any student of the world’s most influential form of economic organization.”—Adam Winkler, author of We the Corporations

On Sale
Nov 8, 2022
Page Count
384 pages
Basic Books

William Magnuson

About the Author

William Magnuson is a professor at Texas A&M Law School, where he teaches corporate law. Previously, he taught law at Harvard University. The author of Blockchain Democracy, he has written for the Wall Street Journal, Washington Post, Los Angeles Times,and Bloomberg. He lives in Austin, Texas. 

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