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Can the Corporation Survive?

19 Pages Posted: 15 May 2001 Last revised: 18 May 2013

Michael C. Jensen

SSRN; Harvard Business School; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit

William H. Meckling

Simon School, University of Rochester (Deceased)

Date Written: January 30, 1978

Abstract

One of the tactics politicians use in their quest for power is to draw a false distinction between human rights and property rights. Property rights are, in the last analysis, rights of individuals. As investors, who have a direct stake in the property rights of corporation, become less certain that society will honor those rights, the capitalized values of corporate securities will erode - ultimately to the point that many corporations will be able to remain in business only so long as they can finance their operations from internally generated cash flow or public subsidy.

Keywords: Rights, regulation, private enterprise, contracts, rights, regulation, private enterprise, contracts

Suggested Citation

Jensen, Michael C. and Meckling, William H., Can the Corporation Survive? (January 30, 1978). Financial Analysts Journal, Vol. 31, No. 1, pp. 31-37, January/February 1978; Harvard Business School NOM Unit Working Paper No. 1978. Available at SSRN: https://ssrn.com/abstract=244155 or http://dx.doi.org/10.2139/ssrn.244155

Michael C. Jensen (Contact Author)

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Harvard Business School ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Harvard University - Accounting & Control Unit ( email )

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Boston, MA 02163
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William H. Meckling

Simon School, University of Rochester (Deceased)

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