The late 1870s and early 1890s ushered in the Gilded Age of the U.S., where rapid industrialization and free-flowing innovations were sweeping the nation. As I see it, successful ventures from the private sector played an interesting role in the development of the state during this period. The steel conglomerate that Andrew Carnegie helped usher in, an icon of industrialization, stands as a striking example of this. This is because Carnegie Steel Co. had effectively managed to rally together the production of steel from all over the country, turning numerous small-scale and fragmented steel mills into one gigantic steel conglomerate. Interestingly, the larger and more economically successful Carnegie Steel became, the more important it became to put bureaucratic structures, feedback loops, regulations, and systems in place. Alternatively, the conglomerate may very well have been crushed by its own success.
Despite immense challenges, Carnegie Steel managed to grow successfully—so successfully, in fact, that it urged the U.S. government to become more involved in regulating the private sector and in protecting consumers. Social and political reform followed from the 1890s to the 1920s in an effort to address emergent inequalities and instances of corruption, all of which were exacerbated by the growth of the private sector. For the steel giant, this meant that it had become simply too big and too important to be left in private hands alone. In 1901, the conglomerate was bought by the state, becoming a major component of U.S. Steel. The U.S. now had to make sure that this sector of the economy, which was responsible for a vital aspect of civilian life, operated efficiently and that it served the public interest.
The lessons I draw from this story are twofold: first, as a company grows and grows, it needs to implement and adhere to rules, structure, and hierarchy out of necessity for further growth and economic success. Second, in cases where we can’t look to the state for implementing regulation, structure, and good governance, we can look to the private sector for these things, to some degree.
The idea is that the growth of the private sector leads to competition. To get ahead in this competition, you need structure and long-term vision, so control and strategy become more and more important. The companies with efficient processes and structures pull ahead in the race to the top. More development then breeds an ecosystem of progress-through-organization. Any large company that emerges in this ecosystem must depend on structure and strategy to be able to compete. At this point, it becomes easier to hold the private sector accountable because everyone is playing by the same rules.
In a very optimistic scenario, a new norm emerges, where people realize that it’s in everybody’s best interests to collaborate on a larger scale rather than going at the private sector alone. From ant to colony. After all, a private sector landscape with small-scale enterprises is very chaotic and difficult to monitor and regulate. There’s simply too much turnover and not enough studying of what actually works. Larger organizations are able to learn over time, optimize, standardize, and thereafter provide the tools needed to replicate success. This, I think, is what’s needed in Albania.
However, all this is not to say that large private companies like those of the U.S. are the only thing that can change Albania for the better; it is simply a means of positive action that a particular group of people can take. Albania cannot and should not take the path that the U.S. did. We bear a different history and are facing a different reality. Carnegie Steel had the success it had because the state supported the development and growth of private enterprise. This is not exactly the case for Albania. But we have something else up our sleeve—the help of industrialized democracies that operate in developed markets.
After all, developed markets in the West have already created large enterprises that operate under strict regulation and structure. We may just be able to depend on the reputation, support, self-governance, and regulatory framework of multinational companies from developed markets to make our own businesses work. We don’t necessarily need to reinvent the wheel here; we can take what works from one part of the world and bring it to our little corner. And if we’re really smart about it, we can bring it over with their help.
