Friday, February 3, 2012

Nepotism: Yea or Nay

Nepotism, particularly in business and government, is regarded as a dodgy practice. Fair enough, but in the days before the invention and installation of telegraph lines, it was one of the more reliable ways to stay connected. Without the feedback loop of today’s communication networks, businessmen needed the trust of both kith and kin to grease the wheels of commerce.The idea, let alone the reality, of a digital village wasn’t even a twinkle in the eyes of our great-great-grandparents.

Thomas Jackson, manager of HSBC in the mid to late 1800s, had nepotism down to a fine art. He brought in more than a dozen relations and neighbours from Southern Armagh to work in the bank in Hong Kong. Some stayed, while others moved on to other ventures in the region. Even after they had moved on, they still remained part of his information network, and contributed to the bank’s success.

Thomas’ most brilliant move, although it was clearly also done for love, was to marry the daughter of a Singaporean sea Captain, and to thereby marry into her brothers’ entrepreneurial activities. These were all useful men to have within the family tent in the nascent days of HSBC.

Last October, my seat mate on a flight from Dublin to Boston looked like an interesting guy to chat with. He had one of those classy leather satchels, ennobled by the patina of use, and even better, he reached into it and pulled out a history book. The title, I can’t remember. We introduced ourselves, and it turned out that Jim Livesey was the Head of History at the Universityof Sussex with a specialty in the 18th Century. I wish now that I had peppered him with even more questions. In response to me asking about the early days of banking, he recommended - amongst other suggestions - that I read a book called Citizens of the World.

Citizens of The World: London Merchants and the Integration of the British Atlantic community 1735-1785. David Hancock. Harvard University. Cambridge University Press. 1995.

This turned out to be a great suggestion. Unlike many academic books that tend to be dull - they teach us how to write like that, Jim said - this one turned out to be a riveting picture of a handful of men who had their fingers in just about every commercial enterprise that sustained the reach of the British Empire. It made me think about Thomas Jackson in a new light, and what he brought to the table when he set about making a success of HSBC.

Reading this book, I also gained a new appreciation of what the word merchant meant in the 1700s. The word didn’t refer to a mere seller of saddles, or feed, or pewter. It referred to someone “who trafficks to remote countries”. In short, the word merchant referred to what we would call an importer/exporter.

Not surprisingly, it took more money to enter the global game than it did to stay local. For example, if you were an apothecary, retail cheesemonger, or a upholsterer you only needed start-up cash of about £100. You could conceivably raise this from your extended family, including grandparents, granduncles and grandaunts, godparents, and cousins and so on. There were other occupations that had pricier start-up costs. If you were a retail linen-draper, pawnbroker, or pewterer, then you needed £1,000 or so to get started. Becoming a merchant required £3,000-£4,000. I am not sure how that amount stacks up against the cost of buying a military commission, but it was certainly much more than chump change.

Still, if you weren’t born with a silver spoon in your mouth, but had the requisite social and commercial skills to succeed, it was well worth the candle. Compared to choosing one of the more usual options for men of this class: agriculture, it was a total no-brainer. As Hancock points out, historians have recently calculated the scanty returns that would be expected from land, no more than 3 1/4% per year. Far greater rewards, perhaps 20%, could be made in commerce.

Even though Thomas Jackson emigrated to Hong Kong in 1863, close to a century after the men profiled in Hancock’s book were commercially active on the international scene, he fits their profile of coming from the periphery, physically, commercially, and socially. In his case, he was a farmer’s son from South Armagh, and never had any formal university-level education. He learned the basics of banking as a clerk in Belfast, earning so little that he had to bunk in with relatives. Hancock describes the personality profile of such men as:

... “opportunistic”,  restless men who actively adapted their decisions and actions to the commercial expediency of the moment. They were relentless, even experimental in seeking opportunities to invest; they maintained more than one product or activity at once; they entered new enterprises, often profitably; and in general they were flexible in their responses to change. Their opportunism stood in contrast to peers who thought and acted more traditionally. ...  their fields of action were primarily neither local nor national. Their reach started early in life with their migrations, they drew on their far-flung experiences and contacts throughout their careers.

 When Jackson was a lad in knee pants, his relations earned their living through inter-dependent enterprises which in their case included: farming, being a chandler (literally making candles from the fat of the land), working in the leather trades, or as a maltster, butcher, or grocer. The linen industry that his uncles were involved in relied on a mix of agricultural skills needed for growing the flax, mechanical skills needed to run the flax mills, and marketing skills to sell the finished product. Today, we would call this approach: vertical integration,. This is naturally a useful concept for a banker to have already internalized when it comes to being able to turn a minor local bank into an international success story.

As a child, Thomas had accompanied his father to the local markets where cows and horses were bought and sold, crops were exported, and where the trading was always direct and oral. The skills of the marketplace, frequently underrated, were as much social as anything. Learning how to size up prospective buyers, as well as when to step up to the plate, and when to step back. Taking the measure of a man., and knowing full well that loyalty was earned, not purchased.

Just as successful  merchants had always done, Jackson nurtured commercial linkages to men with established skills. These men were culled and cultivated from a collection of blood, ethnic, and neighborhood connections. Like earlier men on the global scene, he also took care of his staff, and amongst other things, set up a lunch room for junior clerks – not a common practice in the days of Victorian banking. Aside from the obvious benefits, it also kept Jackson connected to cutting edge thoughts and approaches:

I have tried always, and I have succeeded, I think in making my principal friends among the junior members of the staff. Rubbing the old file against the young flint brings out the best qualities of both and produces a fire of intellect which has been grateful to us all.

Some of this was a no-brainer to Jackson. Like most of the global merchants who preceded him, he had grown up with no dramatic separation between public and private zones, no significant division of working spaces. As a child, he ate, played with and grew up alongside the children of the families who worked in his family’s fields, and in his parent’s home.He was at ease with a range of social classes.

Once married and living in Hong Kong, he had such an open door to his home, that his mother back in Armagh was a bit ticked off with him (on behalf of his over-worked wife): In my simplicity, she said, I thought that Tom was a Bank Manager, but it seems he is also a hotel keeper. Fortunately, Thomas' wife Amelia knew how to swing with this. After all, her family had not only run shipping interests, but also hotels. In fact, the present day Raffles Hotel is built on the same plot of land where they once lived, and as a sideline, once ran a rooming house.

I could go on, but I’ll stop for now, content with returning to my opening thought on nepotism. Yea or Nay? It does seem that it had its place.

NOTE: My next book to enjoy – which is on order: Civil Society and Empire: Ireland andScotland in the Eighteenth Century Atlantic World, James Livesey. Yale University Press. 2009.
2nd NOTE: I have italicized quotes from Citizens of the World, as well as quotes from my Jackson letters.

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