New Publication: Adolf Berle’s Critique of US Corporate Interests in the Caribbean Basin

2 11 2017



I thought I would let my readers know about a paper I have just published with my co-authors Jason Russell (Empire State College) and Kevin Tennent (University of York Management School). “Adolf Berle’s Critique of US Corporate Interests in the Caribbean Basin.” This paper appears in  Wiliam Pettigrew and David C. Smith (eds) A History of Socially Responsible Business, c.1600–1950. Palgrave Studies in the History of Finance. Palgrave Macmillan.

Abstract: The expansion of the USA into a global economic power began with the extension of its influence over the Caribbean and subsequently Latin America. This was not an accidental process and was instead the result of foreign policy decisions that led to the USA’s political and economic dominance in the western hemisphere.

This chapter is an outgrowth of our wider research project on Berle. We presented another paper about Berle at the recent Academy of Management conference in Atlanta.


s-l300 The abstract of that paper is below:

Our paper explores how a seminal text influenced corporate governance systems in the United States and abroad. The Modern Corporation and Private Property by Adolf Berle and Gardiner Means (1932) remains one of the most cited works in management. Unfortunately, the radical political vision that informed this book has been ignored or forgotten by the vast majority of management academics who now cite this book. Our paper shows that Berle and Means espoused a stakeholder theory of corporate governance that challenged the idea that the sole purpose of a corporation is to create value for the shareholders. Whereas shareholder value ideology was dominant in the United States in the 1920s, the nation’s corporate governance system moved towards a stakeholder model during the New Deal. We argue that the influential text by Berle and Means contributed to this shift. Stakeholder theory remained dominant in the US corporate governance theory until the late 1970s, when it was challenged by the re-emergence of shareholder value ideology. Our paper, which is based on archival research in the Franklin Delano Roosevelt Presidential Library, explores the cultural shifts that shaped how US companies have historically defined success, treated their workers, and influenced inequality in society. Our paper examines why Berle and Means choose to present a stakeholder theory of corporate governance in this text, which was written between 1928 and 1931. The paper then discusses the reception of this ideas of Berle and Means and documents how their theory came to influence how many US corporations allocated resources among different stakeholders. We suggest, somewhat tentatively, that the ideas of Berle and Means prompted corporate managers to behave in ways that contributed to the relatively low levels of income inequality that prevailed in the United States between the New Deal and approximately 1980. The paper documents how political cultural shifts in the 1970s undermined the popularity of the idea of Berle and Means and promoted a revival of shareholder value ideology. In advancing our explanation for the rise and fall the Berle-Means variant of stakeholder theory, we relate their ideas to United States cultural, political, and military history. We suggest that the same cultural shifts that contributed to the re-emergence of shareholder value ideology in the 1970s were connected to neo- liberalism and the post-1980 growth in economic inequality in the United States. By the time Gardiner Means died in 1988, the neo- liberal ideology of corporate governance presented by Jensen and Meckling (1976) had largely displaced the stakeholder approach espoused by Berle and Means. In addition to being informed by the research of business historians such as Lazonick and O’Sullivan (2000), our paper is also informed by the current debates about the relationship between national cultures of corporate governance and the comparative levels of inequality in various advanced economies (Piketty, 2014; Cobb, 2015; Atkinson, 2015).




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