British trade in the West was never an instrument of empires. It had no headquarters like the compounds at Montreal and no capitol like the rock-rooted fortress at Quebec. It had no seasonal rhythm like the canoe caravans coming down the rivers on the spring race of water to the tall ships above the quaysides loading their pyramids of peltry. It had no trace of the pagentry of black-robed priests visioning by their campfires in the forest a new empire for the Church, and no imperial plan of feudal seigniories and savage nations submissive to the rule of the Rock. The British trade was sporadic, individual and motivated by simple greed. When forty dollars' worth of trade goods would secure a thousand dollars' worth of peltry, there was incentive enough to bring pack trains to Ohio.
Walter Havinghurst, Land of Promise
In 1959, Dr. Charles Lindblom posited that companies that had disciplined processes for experimentation and discovery had an advantage over those that operated, in the words of Dr. John Kay, against "a single comprehensive evaluation of all options in light of defined objectives". The argument Doctors Lindblom and Kay make is common sense. For those of us without the gift of omnipotence, the ability to reassess objectives and tactics with the benefit of first-hand market knowledge is a handy capability to have.
While this is intuitively appealing to entrepreneurially-minded managers, it is decidedly unappealing to risk-averse capital. Complex corporate strategy derived from analysis and modeling creates the appearance of authoritative expertise. Authoritative experts are in the business of selling predictability. Debt capital likes predictability. As long as there is cheap capital to be raised from risk-averse investors there will be complex business strategies. This doesn't make for good strategy or good investment. This just makes it something that happens.
There is an obvious contemporary comparison between Amazon (financed with equity capital) and WeWork (financed largely with debt capital) and no doubt there will someday be a good case study that sheds light on the differences between the two firms. Suffice to say for now that in the latter's case, somebody tells a good story (Adam Neumann at WeWork), somebody has money burning a hole in their pocket (Masayoshi Son at Softbank). The story makes for an eye-popping valuation, but the story doesn't make it a rational valuation.
Human history is rife with examples of big, ambitious, up-front design that fails to live up to the hype and reward the capital behind it. I've been doing some research into the development of North America from the time of the Renaissance. The opening of the North American continent created a massive trade opportunity for European countries. Although the Spaniards were the first to arrive during the Renaissance, the French were first to pursue opportunities in the North American interior. The interior was rich with wildlife. The indigenous peoples were adept at harvesting the pelts of that wildlife. European manufactured products could be profitably traded for those pelts: $40 of trade goods to $1,000 of prepared pelts, per the opening quote.
As lucrative as the trade opportunities were, the French dreams for the development of the interior were even more ambitious.
Having seen the immense forests of the Ohio and the broad prairies of the Mississippi, La Salle formulated his life's ambition. He would establish French civilization in the rich country between the two rivers. He would begin by systematizing and enlarging the fur trade, using cargo vessels on the lakes, erecting fur depots on the rivers, establishing a chain of warehouses and magazines. It was a bold undertaking that looked to the protection of French interests all the way from the mouth of the Mississippi to the Great Lakes and the establishing of stations of prestige and power at a dozen strategic points.
[...]
It was a dimly comprehended country, but La Salle saw it more clearly than any man of his age. He made the restless [Governor] Frontenac envision it like a panorama from the Rock above the St. Lawrence. And it made the ambitious governor grasp his program of a commercial empire with French goods going systematically to the strategic posts and the fur caravans drawing in over the great web of rivers to the broad sea lanes of the Lakes. Together they drew up a design of occupation, fortification and settlement.
La Salle's big vision needed big execution. It did not suffer from a lack of big execution. He oversaw the construction of the 60-foot long Griffon, the first ship ever on the great lakes beyond Ontario; a vessel of that size could transport larger quantities of trade goods than the largest fleet of canoes. He established trade relationships with interior peoples. He established forts throughout the present day states of Ohio, Indiana and Illinois, reaching as far west as the Mississippi.
What the big vision did suffer from was unforeseen circumstances, to which La Salle was simply unable to respond. Advance traders squandered their French-made trade goods, trading for themselves rather than for their employer. One of La Salle's trusted lieutenants - Louis Hennepin - was taken prisoner by the Sioux. La Salle's men abandoned his key fortification of Fort Crevecoeur. A key trading partner - a village of the Illinois - was defeated by the Iroquiois. A storm over Lake Michigan claimed the Griffon, laden with pelts from the North American interior for Europe. Ultimately, La Salle's detractors were successful in discrediting him in Montreal and Paris, and his creditors closed in on him. While he would ultimately gain support from the French crown for one final expedition, it would fail for the same reasons his previous expedition did: ambition impervious to ground truths.
Though the ensuring years saw scattered new trading posts and mission stations - at Chicago and St. Joseph, at Detroit, Cahokia and Vincennes - there was no bold design of a French civilization encompassing the whole interior country.
The legacy of the French vision lingers on in the names of rivers, cities and counties that bear the names of the influence of the French explorers and of the explorers themselves: Eau Claire, Fond du Lac and St. Louis; Hennepin, Joliet and Marquette; and of course, La Salle himself. But these are just echoes of the past. As Dr. Havinghurst points out, the North American market for European trade goods fell into the hands of those who were not executing in pursuit of a grand design, but content to muddle through.
No surprise, then, that the 20th century instantiations of these 18th century ambitions - Singer Industries and TRW - if they are remembered at all, it is as legacy place names and not 21st century concerns.
