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History of Chambers of Commerce

Extended chapter summary

Local Business Voice

Local business voice: The history of chambers of commerce in Britain, Ireland and Revolutionary America 1760-2011, by Robert J. Bennett (Oxford University Press, published: UK, October 2011; USA, November 2011).

Overview: This book challenges previous academic commentary on the early chambers by showing they were more numerous, persistent and active than previously recognised. It demonstrates common origins in protest leading to a reform agenda, with diffusion down the size spectrum of cities, eventually reaching all towns and communities. Chamber voice increasingly linked lobbying with supplying a ‘bundle’ of business services. The book uses multiple theoretical frameworks, overlapping in time, to trace for the first time the importance of commercial arbitration, coffee and reading rooms, and information and consultancy services as critical parts of the chambers’ Unique Selling Point (USP). For later developments it demonstrates the challenges arising from increasing partnerships with government, and competition with rival sector and small firm bodies. A systematic analysis of members shows their links with early protest campaigns and religious dissent; in modern chambers it demonstrates the forces that underpin joining and lapsing decisions: exit, voice and loyalty. The chambers fully included are those in the UK and Ireland. There is also detailed coverage of the early chambers in the USA, Canada, and Jamaica. These chambers had common origins as private law, independent voluntary bodies. The information used in the book’s figures and tables is available in a data archive deposit.

Part 1: Overview

Chapter 1: Local business voice and the chambers of commerce

This chapter defines chambers of commerce and the related bodies that are covered in the book: chambers of trade, trade protection societies, chambers of agriculture, and how these interface with sector, small firm, and national business organisations. It shows how the book combines primary historical, economic and political analysis to give statistical overviews, highlighting local contingency, personality, and the geography of place - to explain why chambers are, and were, where they are, and how they have been used and valued by members, and managed by staff. It also introduces the local and national archive sources employed, explaining how historical data were aligned.

Chapter 2: Historical overview

The book is mainly thematic, so this chapter puts the themes into a narrative context. It traces the earliest chambers of commerce, from 1767, and ‘delegate’ bodies that participated in the General Chamber of Manufactures 1785-7, and the Union of chambers 1793-1805. It demonstrates how the chambers of commerce developed in every major city, and were copied in smaller towns by chambers of trade. It describes how early societies for credit and debt collection (trade protection societies) worked with the chambers, and how chambers of agriculture competed. For the twentieth century the chapter traces competition from sector-based trade associations, small firm bodies, and national bodies such as CBI. It demonstrates the peripheralisation of local voice from WW1 up to the 1980s, but a revival in the UK and Ireland up to the present as providers of business services and partners with government in local economic development and workforce training.

Part 2: Forces, origins and diffusion

Chapter 3: Forces of association

This chapter reviews the main academic and practitioner discussions of what gives chambers their USP. It explores how unity of voice is developed through deliberation. It shows that earlier academic views of instability of early chambers are overstated. The forces underpinning collective action and free rider behaviour are examined to demonstrate how chamber service bundles develop: as trust goods, as well as tailored services, based on transaction cost and networking advantages. Institutional benefits and social capital assist chamber development. Modern additions to service bundles from government contracts are shown to have tensions of ‘non-preferred’ goods. Political non-alignment, and social networks are critical aspects of the historical and modern chamber brand. Only the national US Chamber of Commerce has a sustained history of political alignment. However, at critical points local chambers have been ‘elite’ social movements that have participated in changing frames and policy repertoires; especially during times of extreme contention.

Chapter 4: Concepts and origins

This chapter searches for the proximate cause of chambers over 1760-1800. It reviews the discourse on ‘chambers’, how this linked with re-assessing the trading relationships with the colonies, and how it interfaced with existing lobby mechanisms, including American and other colonial agents. It analyses how a new ‘discourse coalition’ emerged across the Atlantic world supporting ‘reform’, and how this worked with the opposition, and the Rockingham, Shelburne and Pitt administrations. It focuses on the role of American unrest leading to rebellion; how this was articulated through American merchants in New York, Boston and Charleston; and how localities in Britain and Ireland responded. New analysis of the Stamp Act, Wilkes and other petitions demonstrates how key participants became leading forces behind the early chambers on both sides of the Atlantic. Entirely new information on the first Liverpool, Manchester and other early chambers is developed. Responses in Jersey, Guernsey, Jamaica and Quebec echo the general pattern. The chapter extends and re-interprets the activity of Josiah Wedgwood, Thomas Walker, Samuel Garbett, and other leading personalities; it also shows Birmingham and Manchester as exceptional to most of the other chambers. It show the critical importance of Benjamin Heywood in Liverpool, and later Patrick Colquhoun in Glasgow. Early chamber leaders are shown to be pro-reform, but treading an uneasy path between attacking the government and resisting revolution. In the US many members, but not all, were dubbed ‘loyalist’.

Chapter 5: Diffusion

Chambers were initially small in number and located mainly in the main ports. This was explained by the ports’ political weight, experience of lobbying for private Bills for infrastructure development (especially wet docks and canals), and their focus on networks of economic and social exchange. This chapter shows that chamber diffusion was generally down the population rank-size distribution of cities, eventually penetrating into all areas and sizes of centres. This was true in the UK, Ireland and the USA. However, the chapter shows that there was important regional differentiation, and there were some notable barriers to diffusion as a result of resistance. In London this included resistance from central government. In centres, such as Bristol, Dublin, Cork and Londonderry, it was resistance from the pre-Reform local corporations. Other centres had mixed support from pre-existing bodies such as the Merchant Adventurers, Staplers, and commercial committees.

Part 3: Structural tensions

Chapter 6: Resources, governance and management

This chapter shows how the resources underpinning the early chambers predominantly came from subscriptions, but shifted progressively to include user fees, and after the 1970s were supplemented by government contracts. This changed the relation between members and the chambers, but analysis of management practices demonstrates that subscriptions were, and remain, a critical influence on member decisions – particularly times when subscriptions are raised. The governance of chambers of commerce evolved from purely voluntary elected officers to a professional staff of contract managers; however, smaller chambers of trade have remained dominantly voluntary. The tensions of the shift to professional staff are analysed, together with possible influences on ‘management sorting’. Analysis of committee structures shows a broadening to encompass wider interests and sector structures, and to respond to government threats.

Chapter 7: Recognition and public status

As voluntary bodies, chambers in Britain, Ireland and America rely to some extent on the receptiveness of government. Public law systems, such as those in Europe, have automatic access, but can lack independence of voice (and of course they can also be ignored). This chapter analyses how private law chambers have tried to enhance their right to be heard: initially through charters and incorporation, then seeking to achieve a formal status in government consultations (especially over railway rates). Some advocates also called for public law chambers, from the earliest days; this led to a destructive internal debate in the UK in the 1980s. In modern times involvement in government contracts, and a Chamber Act to protect title have achieved many of the former aims, e.g. in the UK and Canada. A separate track, for chambers to have a formal legal status as commercial arbitrators through tribunals of commerce, achieved notable success through the 1889 Arbitration Act, but the impact was limited by resistance from lawyers. Leone Levi and Francis Lyne were prominent in these debates, as was Henry Brougham and the Law Amendment Society, and the Social Science Society. This chapter presents the first detailed analysis of these developments.

Chapter 8: National voice, local voice

This chapter provides the first overview of how tensions between local chambers and national bodies were resolved, largely omitted form the history of the ABCC by Ilersic and Liddle. Early initiatives were a Union of Chambers, the General Chamber of Manufacturers, and chamber agents in London. Some of these initiatives copied the models used by American and colonial agents; e.g. London agents for Scotland, Ireland and the Channel Isles. The UK national association for chambers of commerce (ACC/ ABCC/ BCC), established in 1860, which included Irish chambers, was replicated in the chambers of trade, trade protection societies etc; and in the Irish Republic in 1923. In the US national associations awaited 1912. The chapter shows that the UK association was slow to settle down, with many major chambers not joining, and Liverpool prominently leaving after one year. There were similar tensions in Ireland after 1923. Detailed analysis shows the clash of local chamber independence with attempts to enforce a common view. Tensions continue up to the present. The chapter analyses the tussles and different plans. Efforts by national associations to improve local chambers have often been resisted; but in the UK after 1990 an accreditation and benchmarking system has been successful, and copied in Ireland and Canada.

Part 4: Activities

Chapter 9: Early chamber voice

This chapter is a radical reappraisal of the earlier academic literature. It shows the breadth, persistence and impact of early chamber lobbies, with a strongly developing set of locally independent voices in Liverpool, Manchester, Glasgow, Dublin, etc. They were important in Treaty negotiations, American debt compensation (Jay Treaty), over lighthouses, the post office, East India Company charter, and many other matters. The chapter reviews these developments, and the Union of chambers that formed in 1793, and the particular influence of John Turnbull. It analyses lobbies by all the early major chambers showing how North’s and Pitt’s governments were influenced. On the slave trade it shows how the chambers stood back and left decisions to parliament. The chapter also covers the short-lived General Chamber of Manufacturers. It demonstrates that the demise of the General Chamber was due more to personalities than economic tensions, and to an unworkable structure trying to relate national and local voices. Contrary to earlier academic opinion, it had little relation to, or effect on, the independent chambers, but it did influence their degree of ‘noise’. The role of Patrick Colquhoun in Glasgow is shown to be far more significant than previously recognised in influencing policies taken up by the General Chamber, and keeping the provincial chambers independent.

Chapter 10: Chamber voice from the Corn Laws to the twenty first century

This chapter combines a full analysis of the Parliamentary Papers archive (giving an overview of all chamber parliamentary lobby activity), with detailed assessments of the main ‘frame changing’ campaigns. It shows growth in volume of lobbying in the mid nineteenth century, and then through the twentieth century. It shows the frame-changing effect of the Corn Law abolition as a re-launch of the chamber brand, especially from the contribution of Manchester. The extended tensions over free trade and tariffs are given new insights. A crucial new analysis is given of chamber co-operation with government in the Advisory Committee on Commercial Intelligence from the 1898, and then disseminating consular information after 1917 – arguably the first examples of ‘corporatism’ in the UK. Resistance to municipal enterprise and high local taxes (the Rates) form major themes throughout the twentieth century in the UK and Ireland. Modern lobbies have focused on partnering government, but attacking taxation and over-regulation.

Chapter 11: Milieus for discourse and deliberation

This chapter breaks new ground in showing how early chambers were intimately involved in many commercial coffee houses, exchanges and other initiatives to provide meeting places and drop-in facilities for business discussion, in some cases promoting the settlement of bills of exchange. More than half of the early chambers were joint developers of coffee rooms, hotels, subscription libraries or exchanges. This was critical to their need for deliberation on policy threats, but also interrelated with their underpinning networks in local communities: New York had the first. New material on Liverpool, Waterford, Cork, Glasgow, Dublin, Dundee and Newcastle, Lancaster, Galway and other chambers reveals some of the strongest links. Analysis of the content of chamber reading rooms and libraries shows their economic focus, as well as overlap with social networks and ‘politeness’. Subsequent developments demonstrate milieus as critical parts of the USP until modern times; supplemented by publications, and then web and e-communications in the modern chamber.

Chapter 12. Services

Chambers bundled the activities of voice with a range of other services. This chapter gives the first long-term and detailed analysis of how these services evolved. It covers commercial arbitration, debt collection (often joint with trade protection societies), dealing with information and enquiries, certification of commercial documents, conciliation in labour disputes, providing labour market information and help with recruitment, commercial examinations, and filling other gaps. Some limited attempts at combinations are analysed in Northwich and Macclesfield. There were also efforts by chambers of trade and trade protection societies to regulate shopping hours, employment conditions, and trade credit. The modern chamber bundle is assessed for breadth and durability.

Chapter 13: Partner and contractor to government

Many modern chambers rely to a significant extent on government finance through contracts. The chapter shows chambers as, in many ways, ‘natural partners’. Early relationships developed through municipal improvement and local partnerships. This expanded to cover various consultation processes on local and national committees; then provision of apprenticeships. Since the 1990s there has also been chamber leadership of local economic initiatives. Chambers became ‘natural’ partners because of their democratic basis and networks of business members. Links became so close that after 1996 some UK chambers merged with government financed Training and Enterprise Councils (TECs). After these were abolished in 2001, chambers worked with regional agencies (RDAs), and after the 2010 UK election with Local Enterprise Partnerships (LEPs) and Enterprise Zones. In Ireland there has been important partnering of chambers with County Enterprise Boards and EU initiatives, such as DAWN. Many chambers of the last 20-30 years are different from any stage in the past in this close relation with government. This has created major tensions arising from imbalanced risk/reward ratios and instability, leading to challenges for the future.

Part 5: The members

Chapter 14: Members and interests

Chamber membership is assessed in detail for the earliest chambers in terms of their geographical reach, sector structure, balance of company structures, trading markets, overlap with other networks, and links to protests and religious dissent. This was true in the USA, UK and Ireland. Detailed sector analysis shows banking to have been a small, but leading sector within early chambers, disproportionate in the number of bank partners as members and leading office holders. Modern developments have interrelated with changes in industrial district structures, expansion of the incorporated business form, evolving networks, changes in international trade, and the expansion of small firms. A remarkable finding is the market penetration of chamber membership (per head of local population) has stayed relatively stable over 200 years. Pressures from the world wars and economic slumps have been relatively short-lived. Econometric analysis shows service development as the main feature associated with stronger market penetration. The only major changes to stability have come from the 1990s, and appear to relate to the mixed signals from chambers acting as partners with government.

Chapter 15: Motives for membership

This chapter compares historical and modern information on membership motives for joining, retaining membership and lapsing. It tackles the classic issues of exit, voice, involvement, loyalty and commitment; assessing purposive, expressive, solidarity, material selective, and insurance benefits. Affective, continuance and normative commitment is analysed. The chapter demonstrates strong membership persistence, and the importance of subscriptions as crucial pricing decisions influencing lapsing (despite historic under-pricing of chamber services). Recent increases in membership from small businesses has shifted demands towards more direct and tailored services.

Chapter 16: Dynamics of membership

This chapter gives the first estimates of long term joining and lapsing rates for chambers. They were very stable from the 1790s until the 1970s, much more stable than non-commercial societies, trade unions, or many sector organisations. However, a rapid evolution took place after 1970, but mainly in the 1980s and 1990s, to very high rates of membership turnover. This has become one of the major challenges of the modern chamber. Econometric analysis shows that economic changes and crises have little effect on this. The main features associated with lapsing are changes in subscriptions, and changes in services and other costs. Comparison or independent chambers with those that merged with government-financed TECs, show the latter to have had higher lapse rates.

Part 6: Then and now

Chapter 17: Then, now, and the future

This chapter concludes that the chambers have shown remarkable durability by being adaptable to new needs, and diversifying their service bundle over time. However, the 1980s seem to have become something of a ‘clean break’ with the past. The causes for this are sought in product life cycles, shifts to a small firms economy, expansion of chamber territories to cover larger areas more thinly, but most important has been contracting and partnering with government. This has introduced far more instability than that in the economy, with changes arising from changes in the party in power, administrative confusion and ministerial caprice. For the future it is suggested that chambers need to re-emphasise their USP and develop stronger independent missions that maintain government links more on their own terms, keeping risk/reward ratios under control. Developments since the 2007-10 financial crisis in the UK and Ireland suggest that chambers may offer many advantages in an era of austerity, but Local Enterprise Partnerships in the UK over 2010-11 exhibit many of the same tensions as earlier initiatives.

Appendices

  1. Archival and other sources: A guide to sources.
  2. Historical benchmarking: Data compilation and alignment of the database deposit for 150 chambers 1790-2005
  3. Population and economic data used.

Bibliography of chamber histories

References

Index

Detailed to provide a finding aid to all named individuals and every reference to each chamber and locality.

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