Although American energy production has brought immense benefits to the U.S. throughout our 250 year history, the companies responsible are frequently maligned more than they are credited. Even though large firms have been responsible for the profit-seeking innovation that has led to affordable and reliable energy, blaming “big business” and “corporate greed” remains a constant rejoinder for many of our perceived social ills.
Antipathy for large businesses has been especially prevalent for energy companies. Today, we see this hostility most prevalently in efforts across the country to sue energy companies for their greenhouse gas emissions, a strategy known as climate lawfare.
Early Energy Company Interpretation
Originally, energy companies were criticized for their size and reach. In 1911, the U.S. Supreme Court ruled that Standard Oil — the company founded in 1870 by John D. Rockefeller that controlled 90% of American refineries in the late 1880s — had violated the Sherman Antitrust Act and ordered its dissolution. Passed in 1890, the Act allowed the federal government to dissolve trusts that were “in restraint of trade or commerce among the several states, or with foreign nations.”
Just as the climate movements today are fueled by politicians, journalists, and other intellectuals, the anti-business attitudes of Standard Oil’s time came from these same sources. Muckraking journalist Ida Tarbell published a series of articles in McClure’s Magazine in the early 1900s that “portrayed Mr. Rockefeller and Standard Oil as ruthless and immoral, and the articles contributed to public outrage against Standard,” according to the New York Times. And, in his first message as president, Teddy Roosevelt wrote: “There is a widespread conviction in the minds of the American people that the great corporations known as trusts are in certain of their features and tendencies hurtful to the general welfare.”
Conflating economic achievement with political power, anti-business intellectuals sought to transform our economy from one of free-market entrepreneurship to a state-directed ideal.
If these early intellectuals had their way, the contributions of energy pioneers like Samuel Insull, Ray C. Fish, and Edwin Drake would be either deprecated or dismissed. Fortunately, American history has had a few leading intellectuals who have stood for the rights of business and the morality of energy production, considering such leaders as heroic, rather than “robber barons,” for drastically improving the quality of life for the average American.
A Scholarly Woman
One of these figures is Henrietta M. Larson, a business historian and the first woman elected as full professor at Harvard University Business School. According to IER Founder and CEO Robert L. Bradley Jr., “her business histories are among the greatest energy tomes.”
In her two coauthored books on energy companies — History of Humble Oil and Refining Company and History of Standard Oil Company (New Jersey) Vol. 3: New Horizons, 1927-1950 — Larson pioneered an approach to business scholarship that sought to understand business in terms of economic principles. In what would become known as “the new business understanding,” Larson recognized the advantages of size and integration (economies of scale and scope) to best deal with what Joseph Schumpeter called “the perennial gale of creative destruction.” As Bradley notes, “Larson chronicled how business problems inspired solutions, time and again. And she showed how regulation played into the process in a factual, illuminating way.”
Early Life
Information about Larson’s early life and career derives from the article, “Henrietta Larson: An Appreciation,” published in the Spring 1962 edition of the Business History Review.
Born in 1894 in Ostrander, Minnesota, to parents one generation removed from Norwegian forefathers, Larson learned the value of self-reliance early. Her father worked in multiple professions, including farming and storekeeping, eventually incorporating a bank and running a creamery, grain elevator, and cattle shipping association with fellow farmers. Her mother was active in community affairs and prioritized education for her children, with all five of her children who lived to maturity graduating from St. Olaf College and three daughters earning doctorates.
Larson majored in English and minored in Chemistry and History in college, after which she taught high school for a year before moving on to earn an M.A. in Sociology from Columbia University in 1920. Larson then decided to study History at Columbia, earning a Ph.D in 1926 and writing her dissertation on wheat marketing. While pursuing the Ph.D, Larson taught history, economics, and political science for a year at Augustana College in South Dakota and worked as a Teaching Fellow at the University of Minnesota for two years, during which time she took courses on economic history with Norman Scott Brien Gras.
A New Business Historian
Now a professional historian, Larson taught for a year at Bethany College in Kansas and for two years at Southern Illinois University. However, she would be called back east by Professor Gras, who had agreed to work in the Graduate School of Business Administration at Harvard and start a course and research program in business history in 1927. As Bradley outlines in his book Capitalism at Work: Business, Government, and Energy, Harvard Business School opened in 1908 as the U.S.’s second graduate business school, joining the University of Pennsylvania’s Wharton School of Finance. The school’s founding dean, Edwin Gray, focused on “entrepreneurial strategy in action,” highlighting “the self-centered, active individual” that forwards innovation through the pursuit of profit.
Even though she did not agree with some of Gras’s beliefs, was worried about her opportunities to teach, and had to accept a one-third salary reduction, Larson joined Harvard with assurances that “her later salary and rank would be determined by the quality of her work.”
She excelled. In 1936, she (and Gras) published Jay Cooke, Private Banker, which, besides portraying Cooke as an innovative financier during the Civil War and discussing his difficulties financing large railroad projects, “contributed a great deal to general knowledge on the history of investment banking.” In 1939, she coauthored (again with Gras) the Casebook in American Business History, “the first body of assembled data on the subject.” The book was an instrumental resource for business history courses started at other institutions. By 1949, her Guide to Business History, “a monumental compilation of 5,000 references,” was published by the Harvard University Press.
Despite her high level of scholastic achievement, Larson faced barriers as a female Harvard faculty member. According to a tribute to Larson for History’s Women:
Because of Harvard’s policy toward women, Henrietta was not able to teach, but she supervised master’s and doctoral students and lectured occasionally in addition to her research work. In the 1950’s, she taught business history, although it had to be done under the name of a young man on the faculty. In 1961, a year before her retirement, Henrietta was promoted to full professor. She was the first woman at the Business School to achieve this rank, and only the fourth woman in Harvard’s history to do so.
Importantly, Larson was stewarding business history at a time when historians were generally suspicious of “favorable evaluation[s] of business activities.” As Bradley explains, “Much ‘Robber Baron’ history followed in the decades after Tarbell, failing to comprehend the advantages of industrialization and to differentiate free-market entrepreneurship on the one hand from corporate/government cronyism on the other.”
Oil History Tomes
Larson wrote an essay in 1944 that “mentioned that there was not a single comprehensive historical study of a large corporation in the country.” This statement caught the attention of Standard Oil Company (New Jersey) officials, who enlisted Gras and Larson to write a multi-volume history of the company.
To complete the project, Gras and Larson formed the Business History Foundation in 1947, a corporation with the purpose of “sponsor[ing] the project at hand as well as similar ones in the future.” Larson was elected as the foundation’s trustee and treasurer and supervised the project. Gras’s illness and eventual death left Larson fully in charge of the project, publishing the first volume in 1955, the second in 1956, and third (which she coauthored) in 1971.
The preface of the third volume of the series showcased Larson’s attitude toward her role as a business historian and the types of activities and individuals that contribute to business success:
The undersigned authors of this volume hope that, like the earlier volumes in the series, this study will contribute toward a better understanding of the historic role of big business, especially of the multinational type of enterprise… In the circumstances [of the 1927–1950 period], the survival and growth of Standard Oil Company (New Jersey) were not automatic. Indeed, there was no formula for long-term success except the constant exercise of rational calculations and of timely, informed, and broadly based judgements, together with discriminating and vigilant implementation of policies and plans. The result was not a static company but one that brought about significant changes in its organization, personnel, operations, and products and, indeed, in the concept of its obligations to the diverse peoples whom it served.
Larson viewed the work as a study of “the evolution of a vertically integrated, multinational enterprise.” She wrote that these companies have “been a dynamic factor in the administrative and technological evolution of the economy of the free world.”
While working on the third Standard Oil book, Larson published a treatise on Humble Oil and Refining in 1959. Larson emphasized the importance of understanding how business works and highlighted the benefits businesses bring to society, viewing Humble Oil as an example of a business that found success by creating social value through superior products and service:
Our hope is that this study may contribute to a better understanding of modern business. Any institution, to survive, must in the long run not only serve the society within which it operates and do so in ways consistent with that society’s values; it must also be sufficiently well understood so that the necessary social controls, whether through education and public opinion or through government regulation, will be constructive rather than arbitrary or punitive… [Humble’s] growth came not from absorbing other producing companies or even to a major extent from the purchase of proved oil-producing properties, but largely from expansion by means of the company’s own exploration and producing operations.
Although Larson retired from Harvard in 1961, she continued her work on the study of Standard Oil and role as Editor of the Harvard Studies in Business History, which she had held since 1948. In 1979, she received the Distinguished Service Award from the Harvard Business School in recognition of her “enduring self-reliance and quiet willingness to work with others,” which “has prospered the cause of business history at Harvard and across the civilized world.” In 1983, Larson passed away at the age of 83 at her home in Northfield, Minnesota.
Conclusion
Through value-free analysis, Larson chronicled how profitable business, without exploitation, provides value to consumers. She examined and wrote about the factors that contributed to success and failure so that future generations could understand the entrepreneurial and regulatory practices most conducive to prosperity. Her focus on energy companies clarified the important role they play in selling affordable products at massive scale.
Facing intellectual and professional barriers, Henrietta Larson’s scholarship influenced a new generation of historians and stands as good history today. Rhetoric and emotions were replaced by business principles to understand for-profit entrepreneurship regarding the master resource. For forwarding business history in the direction of objective interpretation instead of emotional condemnation, Henrietta M. Larson deserves the title of energy pioneer.
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This article is part of Fueling America: 250 Years of Energy Innovation, a special project by the Institute for Energy Research highlighting America’s unique role as a global energy innovator. To read more related content please visit Fueling250.org. 
