Daniel Defoe co-wrote the Bank of England

Professor of Organisation and Culture at the School, Martin Parker, has just published a new book which provocatively blurs the lines between economic facts and literary fictions

Why is a novel like an organization? It’s an improbable question, but in a new book, Valerie Hamilton and I show that the origins of the corporation and those of the novel have some remarkable similarities. Daniel Defoe and the Bank of England demonstrates how the stories of the past gave birth to the organizations that make the present day.

The book takes the reader back to London, in the late 17^th century. There are poems, plays, fables, legends and tales of gods and goddesses and knights and damsels. But there are no novels. No stories of ordinary people set in the streets around us, with towns, characters and events that we might recognise. Nothing written in the language we might actually use to speak to one another. The novel, in the way that we would recognise it today, begins in the late 1600s with Daniel Defoe’s stories about Robinson Crusoe and Moll Flanders.

Late 17^th century London has very few modern organizations which we would recognise either. Goldsmiths and guilds have vaults where they keep various forms of bullion and things of value. But there are no banks and cheques, no large scale speculative finance. The commercial corporation is taking shape, with the beginnings of various companies of merchants for overseas exploration, but as yet it has little purchase in the everyday world. Most trade is face-to-face and small scale, and there are very few big commercial companies shaping the life and architecture of the city.

From within this world we tell the intertwined story of two friends – Defoe, one of the inventors of the novel, and William Paterson, one of the inventors of the Bank of England. The Bank, for most of its history, was a commercial corporation, an attempt to spin profits from debts. As our story unravels it becomes clear that their two creations work in the same way, using almost identical techniques to make fictions into facts. Both require that we suspend our disbelief, and give credit to charlatans who are out to deceive us while claiming that they are not.

It is a book which tells a story about the determination of two imaginative individuals, a story which is also shaped by the hidden hand of chance and the power of storytelling. The Bank of England took shape because of the discovery of treasure in a sunken ship in the Caribbean, and because it promised more money than it ever had. The novel too had to promise truth, with realistic accounts of recognizable people who had never existed, spinning lies in order to make money for speculators like Defoe and his publishers.

We think that present day theories of organization and management can learn a lot from looking beyond the discipline. Our book draws on history and literature in order to tell an organizational tale. In so doing, it reconnects with a past less bounded, less boxed in, than our own. Daniel Defoe and William Paterson were both extraordinary ‘projectors’ – a 17^th century word for what we would now call ‘entrepreneurs’. Their ‘projections’ now shape the world that we live in, suggesting that our distinction between fact and fiction is a lot less robust than we often like to think.