This only works in a monopoly or oligopoly, where you can’t easily switch careers. If you were out of AT&T, your experience there couldn’t translate easily to other companies. This works even today: there are few ex-Googlers, because experience inside Google is most valuable to Google; there are few other gigantic search-first companies to move on to (OK, you can go to Facebook or Amazon or Microsoft and that’s about it).

So, unless you want the economy consisting of a few dzaibatsu-style monopolies, the “loyalty first” approach to hiring is unsustainable.