Corporation Nation (Haney Foundation Series) PDF
Preview Corporation Nation (Haney Foundation Series)
Corporation Nation Haney Foundation SerieS a volume in the Haney Foundation Series, established in 1961 with the generous support of dr. John Louis Haney Corporation Nation Robert E. Wright uNivERsity of pENNsylvaNia pREss philadElphia Copyright © 2014 university of pennsylvania press all rights reserved. Except for brief quotations used for purposes of review or scholarly citation, none of this book may be reproduced in any form by any means without written permission from the publisher. published by university of pennsylvania press philadelphia, pennsylvania 19104-4112 www.upenn.edu/pennpress printed in the united states of america on acid-free paper 10 9 8 7 6 5 4 3 2 1 library of Congress Cataloging-in-publication data Wright, Rober E. (Robert Eric), 1969– Corporation nation / Robert E. Wright. — 1st ed. p. cm. — (haney foundation series) includes bibliographical references and index. isBN 978-0-8122-4564-6 (hardcover : alk. paper) 1. Corporations— united states— history— 19th century. 2. Corporate governance— united states— history— 19th century. 3. Corporate governance—u nited states— history— 21st century. 4. Big business—u nited states— history— 21st century. i. title. ii. series: haney foundation series. hd2785.W75 2013 338.7'4097309034— dc23 2013020982 Nations, like man, rise, flourish, and decay. —ferris pell, Review of the Administration and Civil Police of the State of New York (1819) C o n t e n t s Chapter 1. the Corporation Nation Emerges 1 Chapter 2. Before the Constitution 9 Chapter 3. Corporate iniquity 25 Chapter 4. Corporate ubiquity 49 Chapter 5. the Benefits of Big 80 Chapter 6. Governance principles 116 Chapter 7. Governance failures 152 Chapter 8. Regulation Rising 173 Chapter 9. Corporate Governance and Regulation since the Civil War 192 Chapter 10. Reforming Corporate Governance 215 Notes 231 index 305 acknowledgments 319 C h a p t e r 1 The Corporation Nation Emerges If they were honestly and safely conducted, [corporations] would afford a safe and satisfactory investment for small sums and thus tend to equalize the wealth of the people. — V. H. Lockwood, 18971 The development of the for- profit business corporation over time has never been well understood, even in the nation most responsible for its economic as- cendance, the United States. “American-s tyle corporate capitalism,” two busi- ness scholars recently proclaimed, “is an international juggernaut” (an overwhelmingly destructive force) and perhaps the single most important insti- tutional feature of modern, developed economies the globe over.2 Yet even lead- ing scholars of the U.S. economy have underestimated the number, ubiquity, and economic importance of early corporations, creating the misapprehension that they were insignificant until after, or perhaps during, the Civil War.3 Two reporters for the generally astute economics weekly The Economist recently wrote a book that called the corporation “yet another quirky . . . in- vention” of “Victorian Britain.”4 Many contemporaries, however, believed that America, not the Mother Country, was responsible for raising corpora- tions from vehicles of monopoly privilege to a widely used form of business. “In no other age or country,” wrote Andrew Allison in 1884, “have private corporations entered so extensively into the business of the country, never so thoroughly into the details of everyday life, as with us.”5 Moreover, while Brit- ain embraced the corporate form before most other nations did, the econo- mies of both America and Britain were significantly corporatized well before Victoria’s long reign began in 1837.
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