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Book Review


William J. Hausman, Peter Hertner, and Mira Wilkins, Global Electrification: Multinational Enterprise and International Finance in the History of Light and Power, 1878-2007. Cambridge: Cambridge University Press, 2008. Pp. ix + 438. $48.00 (paper).


     Commendably for the authors and for Cambridge Press, the content in this ambitious book is accurately reflected in its title. It traces the century-long rise and fall and recent rise again of multinational enterprise and international finance in the development of electric light and power systems around the world. While electrification has steadily increased since the 1870s, foreign investment and foreign control of power systems has followed a quite different path. Despite the diversity of electric power system development across time and geography, there was a remarkable global trend toward international investment and development at the inception of the industry in the late 19th century, followed by what the authors call the "domestication" of electric systems from the 1910s through the 1960s in which foreign investment and control almost completely disappeared first in the developed nations and later in the developing world. Since the 1980s, with the global rise of the Chicago School of Economics privatization and free trade policies, there has been a fitful resurgence of international investment and enterprise in the electric power industry. The three authors painstakingly explain these trends over more than a century through quantitative analysis, illustrative anecdotes, and historical contextualization.

     A related shift from private ownership of power systems to public ownership and now back toward privatization paralleled that trend in foreign investment. The early period was dominated by for-profit enterprises while the domestication era led to extensive nationalization and public ownership. The counter-trend of privatization that accelerated in the 1990s led not surprisingly to an increase in international investment and ownership, although the authors conclude that this latter trend is unstable and its future trajectory uncertain.  Much of the recent privatization and deregulation has resulted in problems that have prompted a reversal in direction back toward more vigorous government regulation and ownership. Documenting and interpreting these trends is the purpose of this book.

     Although jointly crafted by three authors, the narrative is seamless and the prose accessible. Two of the authors are distinguished professors of economics and one is a distinguished professor of economic and social history. Yet this is not a technical economics treatise. There are plenty of numbers in the nineteen useful tables and graphs, but no mathematical formulas in the text. It is written for a lay audience and, presumably, for investors and policy makers interested in a global historical perspective on the electric power industry. The book is too detailed, narrowly focused, and sophisticated to serve as a text for high school and early college students, but it would work very well in upper division and graduate business history and global economic history courses.

     The great bulk of the narrative elaborates the empirical evidence for the authors' arguments. Interspersed are gems of insight whose significance reaches beyond the topic at hand. For instance, the authors argue that the character of the technological system itself required from the beginning exceptionally high levels of capital investment that facilitated the involvement of elite international financial institutions. In chapter 1 they conclude that "multinational enterprise and international finance [made] global electrification possible" (4). At the same time, however, another characteristic of the system essentially guaranteed government involvement. Once electricity became indispensable to manufacturing, commerce, and daily life, questions of ownership, access, reliability, safety, efficiency, and fair rates rose to political prominence, leading to regulation or government ownership or a combination of the two. The same story unfolded for the railways before electrification. There are useful lessons here for historians of global political economy about the complicated relationship between the private sector and the public sector in providing essential public services.

     Other common themes in global history enter and influence this history of electrification. The authors trace how growing nationalism in the early 20th century discouraged foreign ownership, encouraged domestic government investments in power systems, and created a number of national electric transmission grids (chapter 4). Those interested in colonialism will profit from the authors' analysis of which nations' capitalists invested internationally (North American and European investors) and where their money and influence went: Latin America, Africa, and Asia (Table 1.4, 31-33). Interestingly, foreign ownership remained marginal in developed nations throughout, while it was commonplace in developing nations (221) until the post-World War II era of decolonization when a global wave of national liberations and economic expropriations swept the Third World transferring many electric power systems to government ownership, including those in India, Egypt, South Africa, Australia, and many countries in Latin America (237-43). Even Canada and nations in Western Europe turned decisively toward public (national or provincial) ownership in the decade or so after the war. Ironically, in chapter six, which summarizes this "domestication" pattern, the authors show that electrification spread widely and rapidly in the developing world in the postwar era without the aid of foreign direct investment. Instead, quasi-government financial institutions like the World Bank and International Monetary Fund played the role that private capitalists had played decades earlier. 

     While the strongly empirical and non-polemical character of the analysis is commendable, the authors missed several opportunities to draw larger implications and make more explicit claims. For example, while foreign direct investment data reveals the asymmetrical nature of global wealth distribution and power relations, the authors rarely discuss the intentional nature of that inequality and its implications for international relations. They do not resolve the apparent contradiction between their statement in chapter 1 that international capitalist finance and entrepreneurialism made global electrification possible, as if it was indispensable, while describing in great detail in chapter 6 the extraordinary global spread of electrification in the decades after the Second World War that occurred largely without private sector international investment. The authors acknowledge the crucial role of governments in system design, development, and function, and they note that many power systems past and present incorporate a mix of private ownership and public ownership, but they do not attempt to resolve the long-term debate over the performance of one versus the other or bridge the ideological chasm between proponents of one versus the other. Still, this is an illuminating study based on a prodigious amount of research of truly global scope packaged in a highly accessible narrative. It serves as recommended reading for anyone interested in business history, technology history, political economy, energy systems, and global finance.

Paul Hirt is an associate professor of history at Arizona State University and a senior sustainability scholar at ASU's Global Institute of Sustainability. He teaches American and global environmental history and researches water and energy history in the North American West. He can be reached at


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