Talbot, Lorraine (2010) Enumerating old themes? Berle the Progressive. Working Paper. Coventry: Department of Law, University of Warwick. Warwick School of Law Research Paper Series (Number 2010/03).

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Abstract

Berle’s progressive vision of an economy of business organisations which operated in the interests of the community began to be realised in New Deal America and in post-war England. However, in the more recent period of neo-liberalism, corporations have reverted back to their longstanding ideological commitment to the protection and pursuit of shareholder value. That Berle’s work has not had a more longstanding effect on shareholder primacy hegemony, I state, may be attributed to a number of factors. First, whilst Modern Corporation is famous for empirically evidencing wide share dispersal and the resulting issue of director accountability, it is less known – in the UK at least – for its analysis of the changing nature of ownership in the context of share ownership. This has particularly important consequences in the UK, as much of the justification for shareholder primacy is based on a shareholder’s proper entitlement as owners. Second, as Berle acknowledged in his famous HLR debate with Merrick Dodd, much of the normative force of his model depends upon social context. Passive shareholding will only be ‘progressive’ in the context of a strong, socially concerned government. I will show here that post-war Britain’s welfare and nationalisation program was potentially such a context but that this changed with the triumph of the New Right at the end of the 1970s and because of internal contradictions within the labor movement. Finally, I will argue that because Berle’s separation thesis effectively relocates power to managements rather than shareholders (and incorporates an expectation that this tendency would increase with time), it is blind sighted by the emergence of more active, controlling owners. In enumerating Berle’s old themes in the current financial crisis it might be possible to see anew how we, as a society, should negotiate the balance of power and interests between all ‘stakeholders’ for the benefit of the community - concerns which are central to Berle’s work.

Item Type:	Working or Discussion Paper (Working Paper)
Divisions:	Faculty of Social Sciences > School of Law
Series Name:	Warwick School of Law Research Paper Series
Publisher:	Department of Law, University of Warwick
Place of Publication:	Coventry
Official Date:	19 February 2010
Dates:	Date Event 19 February 2010 Published
Number:	Number 2010/03
Number of Pages:	67
Institution:	University of Warwick
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Open Access Version:	SSRN

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