The Modern Corporation and Private Property Revisited: Gardiner Means and the Administered Price

35 Pages Posted: 12 Sep 2018 Last revised: 25 Sep 2018

See all articles by William W. Bratton

William W. Bratton

University of Pennsylvania Law School; European Corporate Governance Institute (ECGI)

Date Written: September 5, 2018

Abstract

This essay views The Modern Corporation and Private Property from the perspective of its junior coauthor, Gardiner Means. Means generated the book’s statistical showings of deepening corporate concentration and widening separation of ownership and control, studies also included in a Ph.D. dissertation Means successfully submitted to the Harvard economics department a year after the book’s publication. The dissertation also included a chapter, never published and rejected by the dissertation committee, that set out a theory administered prices. The theory lays out the statistical results’ implications for public policy. In Means’s view, Adam Smith’s picture of supply, demand, and automatic market correction had been partially eclipsed by inflexible pricing administered by corporate managers. Growing corporate concentration exacerbated these “administrated” prices’ distortionary effects. The theory explained the Great Depression’s persistence and yielded a detailed list of problems to be addressed by a new regulatory state. The chapter, only alluded to in the book, provides essential explication of its excursuses on corporate power and social welfare, for it explains in hard economic terms just what Berle and Means thought that “neutral technocrats” in the corporate sector could do to make the economy work better. The essay goes on to describe Means’s later articulations of the theory and to compare his later career path to that of Berle.

Keywords: Berle & Means, separation of ownership & control, corporate governance, corporate legal history, corporatism, theory of administered prices, corporate concentration, inflexible prices

JEL Classification: B15, B31, D43, G30, K22

Suggested Citation

Bratton, William Wilson, The Modern Corporation and Private Property Revisited: Gardiner Means and the Administered Price (September 5, 2018). U of Penn, Inst for Law & Econ Research Paper No. 18-29. Available at SSRN: https://ssrn.com/abstract=3247924 or http://dx.doi.org/10.2139/ssrn.3247924

William Wilson Bratton (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050
Brussels
Belgium

HOME PAGE: http://www.ecgi.org

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