Public Policy and Private Cupidity: Berle and Means Re-Visioned

Abstract:     
Adolph A. Berle and Gardiner C. Means' The Modern Corporation and Private Property is one of law's undisputed canonical texts. Its 75th anniversary is an occasion both to reassess its legacy and perhaps to rework its insights. Although Berle and Means' work was intended to redirect the governance of corporate affairs away from furthering private cupidity and towards advancing public policy, their enslaving insights have done more harm than good; they have tended to reinforce the primacy of private cupidity or, perhaps more accurately, allowed subsequent theorists to prefer the pursuit of private cupidity by equating it with the development of public policy. This is not only unfortunate, but also unnecessary. Although Berle and Means' The Modern Corporation forms the bedrock of the prevailing paradigm in corporate law and governance, it also contains some very suggestive materials from which to construct an alternative and more democratic way of proceeding which actually subverts and transforms the established model. In this essay, therefore, I want both to celebrate The Modern Corporation, but also to lament the enduring influence of its received understanding on corporate law scholarship and practice.

Keywords: corporation, governance, democracy, accountability

JEL Classifications: K20, K22, K42

Working Paper Series