direct employee participation in corporate decision-making may mitigate some of the inefficiencies that can beset labor contracting the workforce in typical firms is too heterogeneous in its interests to make an effective governing body-and the problems are magnified greatly when employees must share governance with investors, as in codetermined firms. In general, contractual devices, whatever their weaknesses, are and other collective choice mechanisms in resolving conflicts of interest among an tino then supplemented by appropriate labor market regulation evidently superior to voting between a corporation s investors and employees. 8 Today, even inside germany, few commentators argue for codetermination as a general model for corporate law in other jurisdictions. Rather, codetermination now tends to be defended in germany as, at most, a workable adaptation to local interests and circumstances or, even more modestly, as an experiment of questionable value that would now be politically difficult to undo. g C. The State-Oriented Model Both before and after the Second World War, there was widespread support for a corporatist system in which the government would play a strong direct role in the affairs of large business firms to provide some assurance that private enterprise would serve the public interest. Technocratic governmental bureaucrats, the theory went, would help to avoid the deficiencies of the market through the direct exercise of influence in corporate affairs. This approach was most extensively realized in post-war France and Japan. In the United States, though there was little actual experimentation with this approach outside of Andrew Shonfield's 1967 book Modern Capitalism, with its admiring description or was o the defense industries, the model attracted considerable intellectual attention. Perhaps the most infiuential exposition of the state-oriented model in the Anglo-American world wa 8 Henry Hansmann, supra note 2, at 89-119; Henry Hansmann, Worker Participation and Corporate Governance, 43 UNIVERSITY OF TORONTO LAW JOURNAL 589-606 (1993) Henry Hansmann, Probleme von Kollektiventscheidungen und Theorie der Firma Folgerungen fur die Arbeitnehmermitbestimmung, in Claus Ott and Hans-Bernd Schafer editors, OKONOMISCHE ANALYSE DES UNTERNEHMENSRECHTS 287-305(1993). On the weaknesses of German boards, see, e.g., Mark Roe, German Securities Markets and German Codetermination, 98 COLUMBIA BUSINESS LAW REVIEW 167(1998) 9. Some commentators, of course, continue to see co-determination as a core element of a unique Northern European form of corporate governance. See, e.g., Michel Albert, CAPITALISM VS CAPITALISM(1993(asserting the superiority of the" Rhine Model of captialism over the "Anglo-Saxon Model). Even Albert concedes, however, the growing ideological power of shareholder-oriented corporate governance. Id at 169-190 68. Henry Hansmann, supra note 2, at 89-119; Henry Hansmann, Worker Participation and Corporate Governance, 43 UNIVERSITY OF TORONTO LAW JOURNAL 589-606 (1993); Henry Hansmann, Probleme von Kollektiventscheidungen und Theorie der Firma -- Folgerungen für die Arbeitnehmermitbestimmung, in Claus Ott and Hans-Bernd Schäfer, editors, ÖKONOMISCHE ANALYSE DES UNTERNEHMENSRECHTS 287-305 (1993). On the weaknesses of German boards, see, e.g., Mark Roe, German Securities Markets and German Codetermination, 98 COLUMBIA BUSINESS LAW REVIEW 167 (1998). 9. Some commentators, of course, continue to see co-determination as a core element of a unique Northern European form of corporate governance. See, e.g., Michel Albert, CAPITALISM VS. CAPITALISM (1993) (asserting the superiority of the “Rhine Model” of captialism over the “Anglo-Saxon Model”). Even Albert concedes, however, the growing ideological power of shareholder-oriented corporate governance. Id. at 169 -190. 6 direct employee participation in corporate decision-making may mitigate some of the inefficiencies that can beset labor contracting, the workforce in typical firms is too heterogeneous in its interests to make an effective governing body – and the problems are magnified greatly when employees must share governance with investors, as in codetermined firms. In general, contractual devices, whatever their weaknesses, are (when supplemented by appropriate labor market regulation) evidently superior to voting and other collective choice mechanisms in resolving conflicts of interest among and between a corporation’s investors and employees.8 Today, even inside Germany, few commentators argue for codetermination as a general model for corporate law in other jurisdictions. Rather, codetermination now tends to be defended in Germany as, at most, a workable adaptation to local interests and circumstances or, even more modestly, as an experiment of questionable value that would now be politically difficult to undo.9 C. The State-Oriented Model Both before and after the Second World War, there was widespread support for a corporatist system in which the government would play a strong direct role in the affairs of large business firms to provide some assurance that private enterprise would serve the public interest. Technocratic governmental bureaucrats, the theory went, would help to avoid the deficiencies of the market through the direct exercise of influence in corporate affairs. This approach was most extensively realized in post-war France and Japan. In the United States, though there was little actual experimentation with this approach outside of the defense industries, the model attracted considerable intellectual attention. Perhaps the most influential exposition of the state-oriented model in the Anglo-American world was Andrew Shonfield’s 1967 book Modern Capitalism, with its admiring description of