The following is an excerpt from Kyle Edward Williams’ new book, “Taming the Octopus: The Long Battle for the Soul of the Corporation,” now out at W. W. Norton & Company.

There was no other decade in American history when the business executive had more power than in the 1950s. Corporations grew to unprecedented size—there had never been a comparable institution—and industry twisted into concentrated knots. New mergers made the corporation still bigger, testing the corporation’s—and the public’s—limits. Although, as the pollster Elmo Roper concluded, Americans were still suspicious of the private sector, the vast majority of the country agreed that big business was a good and necessary thing.

Roosevelt’s call for an arsenal of democracy fit to destroy fascism abroad had transformed industrial manufacturing at home into a concentrated and organized partner of the national state. The production accomplishments of American business during World War II proved once and for all that the large corporation was no longer an enemy of American democracy; it was the most powerful ally in promoting liberalism around the globe. The war, in short, gave business leaders the chance to leave behind the ideological battles of the 1930s and the cloud of animosity and distrust—stirred up by radical political movements, the Pecora hearings, and labor union militancy—that had hung over big business since the Crash of 1929. In the 1940s, business used advertisements, radio programs, and other PR ephemera to cast for-profit industry as the sole institution capable of conjuring the miracle of wartime production that saved democracy and, indeed, Western civilization. “The defense production job is the greatest news story of our generation. All the citizenry is watching,” said conservative money-giver and Sun Oil titan J. Howard Pew in 1941. “With a vigorous public relations program, competitive enterprise can dramatize its strength more successfully today than its enemies have ever been able to dramatize its occasional temporary mistakes.”

Other changes were afoot. Wall Street, that chief rival to managerial control, was no longer the kingmaker it once was. The House of Morgan was a ghost of its former self, a diminutive bank of marginal significance. Lower Manhattan had quieted down and grown more cautious. Industry also grew increasingly secure in the vast subsidies that began flowing from a military-industrial complex ramping up in the early Cold War, as well as by the relative peace achieved with most major unions through the so-called Treaty of Detroit, the deal that General Motors first, and then Ford and Chrysler, struck with Walter Reuther’s United Auto Workers. And anticommunism along with the new Keynesian consensus that growth can and should be managed by large institutions had pushed dissent to the furthest margins. An unprecedented (and to this day unequaled) economic boom, after twenty years of terrifying crisis, made potential recruits to the anticorporate cause scarce. It was a good time to be a man in a gray flannel suit.

The system of financial governance laid out in the New Deal securities laws of the early 1930s—and regulated by the Securities and Exchange Commission—receded in social and economic significance in the 1950s. Managed funds and large institutional investors were becoming bigger players on Wall Street. They were averse to risky ventures. They sought steady, predictable income from well-established industries, above all those that fed the expanding population’s appetite for consumer goods and both military and civilian construction. The system of corporate democracy, by which stock market prices and shareholder votes crowned executives and directors and influenced the business decisions of a company, was in a state of decay. The annual shareholders’ meeting, in the words of Adolf Berle, Jr., was little more than “a kind of ancient, meaningless ritual like some of the ceremonies that go on with the mace in the House of Lords.”

For an insurgent set of investors who came onto the business scene in the 1950s, the new corporate system reeked of complacency. These investors were innovators in surprising strategies of hostile takeovers, financial leveraging, and sophisticated forms of conglomeration. They took on the business establishment in high-profile clashes and headline-grabbing acquisitions. At times, such innovations in investment strategy directly lent themselves to an ideological assault on management.

Like most entrepreneurs, Louis Wolfson was driven initially not by greed or ideology but by the pragmatic convention of trying to make a business—any business—successful. Wolfson grew up in Jacksonville, Florida, and he maintained a lifelong tan to prove it. A natural athlete who boxed in his teenage years, Wolfson went to the University of Georgia in 1930 on a football scholarship. But he left Athens two years later after a season-ending shoulder injury. He went back to Jacksonville to his father’s junk and scrapmetal yard, which was hit hard by the Great Depression. With this experience in the family business, Wolfson was schooled in the humblest form of arbitrage: not so much turning trash into treasure but finding value where no one else was looking.

Later branded by the Saturday Evening Post as “Florida’s fabulous junkman,” Wolfson’s big break came in 1946. He bought up two shipbuilding companies on the cheap during the wave of war industry selloffs. Over the next few years, he sold the assets and closed down the shipyards at great profit. Next he bought an interest in a film studio for $400,000 and later sold it for $1.2 million. In 1949, Wolfson set his sights on Capitol Transit, a congressionally chartered holding company that controlled the transit system of Washington, DC. Wolfson didn’t care particularly about public transportation. He was alert, however, to Capitol Transit’s unusual hoard of more than $6 million in cash reserves. Wolfson bought a controlling interest for a little over $2 million and proceeded to liquidate the company’s accounts through higher dividends. He rounded off the decade with a proxy fight for a Manhattan-based construction company, chalking up a majority of directorships and eventually taking the title of chief executive.

At every chance he took, Wolfson bemoaned the loss of the “pioneering spirit which helped build this nation.” Instead of energetic business leaders possessing the vital initiative and individualism to adapt to changing conditions and produce a vigorous economy, the managerial class had drifted off into listlessness and conformity. It was a somewhat conventional critique of big business, to be sure, but coming from the mouth of a self-styled outsider such as Wolfson, it possessed an authenticity that most critics of corporate bureaucracy noticeably lacked. Big business was overrun with “robot executives,” he said, and had become devoted to rigid methods and obsessed with appearances. “These are the men—and I am sure they are well known to you—who are reluctant to attempt anything not well established by precedent,” Wolfson told a group of executives. “They fear to venture into new paths or to encourage fresh ideas.”

Wolfson made himself an expert in doing what few were willing and able to do in the 1950s: prowl American industry for firms that were sitting on a lot of cash and were managed by a sedate board of directors and executive leadership. If management didn’t have firm control of the voting stock, Wolfson pounced. While Wolfson developed a reputation as a kind of anticorporate outlaw, he was far from the only one pioneering this form of business strategy. There were fights over companies ranging from New York Central Railroad to 20th Century Fox. Perhaps the most infamous was the one that gave Wolfson the national spotlight for a brief moment in the mid-1950s. That was his battle for control of Montgomery Ward.

Excerpted from “Taming the Octopus: The Long Battle for the Soul of the Corporation” by Kyle Edward Williams. Published in the United States by W. W. Norton & Company, February 2024. Copyright © 2024 by Kyle Edward Williams. All rights reserved.

Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.