HISTORICAL ORIGINS:A BRIEF SKETCH 20)originating in the "Gilded Age"(Iwain and Warner 1873)10 and later to the managerial corporation.Thecaptains of industry"in the trusts and hierarchical groups controlled the majority of votes in vast corporate empires with relatively small(er) amounts of capital,allowing them to exert product market power and leaving ample room for self-dealing.2 In contrast,the later managerial corporations were controlled mainly by professional managers and most of their shareholders were too small and numerous to have a say.In these firms control was effectively separated from ownership.1 Today corporate feudalism of the managerial variety in the U.S.and the "captain of industry"kind elsewhere is challenged by calls for more "shareholder democracy",a global movement that finds its roots with the "corporate Jacksonians"of the 1960s in the U.S.14 them to enforce a common policy on output and prices;the certificates issued by the voting trust could be widely placed and traded on a stock exchange. Holding companies have the purpose of owning and voting shares in other companies.After the passage of the Sherman Antitrust Act in 1890 many of the voting trusts converted themselves into New Jersey registered holding companies ("industrial combinations')that were identical in function,but escaped the initial round of antitrust legislation,for example the Sugar Trust in 1891 (Mead 1905,pg.44)and Rockefeller's Standard Oil in 1892(Mead 1905,pg.35). 10 The "captains of industry"of this era,are also referred to as the "Robber Barons"(Josephson 1934,De Long 1998),were the target of an early anti-trust movement that culminated in the election of Woodrow Wilson as US President in 1912.Standard Oil was broken up even before (in 1911)under the Sherman Act of 1890 and converted from a corporation that was tightly controlled by the Rockefeller clan to a managerial corporation.Trust finance disappeared from the early corporate finance textbooks(for example Mead 1912 versus Mead 1922).In 1929 Rockefeller Jr.(14.9%)ousted the scandal ridden Chairman of Standard Oil of Indiana,who enjoyed the full support of his board,only by small margin,an example that was widely used for illustrating how much the balance of power had swung from the "Robber Barons"to management(Berle and Means 1932:82-83,cited in Galbraith 1967),another type of feudal lord. 11 For Berle and Means(1930):"the]"publicly owned"stock corporation in America...constitutes an institution analogous to the feudal system in the Middle Ages". 12They also laid the foundations for some of the World's finest arts collections,philanthropic foundations and university endowments. is This"separation of ownership and control"triggered a huge public and academic debate of"the corporate problem";see,for example,the Berle and Means symposia in the Columbia Law Review (1964) and the Journal of Law and Economics (1983).Before Means (1931a,b)and Berle and Means (1930,32) the point was argued in Lippmann(1914),Veblen (1923)Carver(1925),Ripley (1927)and Wormser (1931);see Hessen(1983). 14 Non-Americans often consider shareholder activism as a free-market movement and associated calls for more small shareholder power as a part of the conservative agenda.They are puzzled when they learn that shareholder activism today has its roots in part of the anti-Vietnam War,anti-apartheid and anti-tobacco movements and has close links with the unions.In terms of government (of corporations)there is no 8/168HISTORICAL ORIGINS: A BRIEF SKETCH 20) originating in the “Gilded Age” (Twain and Warner 1873)10 and later to the managerial corporation.11 The “captains of industry” in the trusts and hierarchical groups controlled the majority of votes in vast corporate empires with relatively small(er) amounts of capital, allowing them to exert product market power and leaving ample room for self-dealing.12 In contrast, the later managerial corporations were controlled mainly by professional managers and most of their shareholders were too small and numerous to have a say. In these firms control was effectively separated from ownership.13 Today corporate feudalism of the managerial variety in the U.S. and the “captain of industry” kind elsewhere is challenged by calls for more “shareholder democracy”, a global movement that finds its roots with the “corporate Jacksonians” of the 1960s in the U.S.14 them to enforce a common policy on output and prices; the certificates issued by the voting trust could be widely placed and traded on a stock exchange. 9 Holding companies have the purpose of owning and voting shares in other companies. After the passage of the Sherman Antitrust Act in 1890 many of the voting trusts converted themselves into New Jersey registered holding companies (“industrial combinations”) that were identical in function, but escaped the initial round of antitrust legislation, for example the Sugar Trust in 1891 (Mead 1905, pg. 44) and Rockefeller’s Standard Oil in 1892 (Mead 1905, pg. 35). 10 The “captains of industry” of this era, are also referred to as the “Robber Barons” (Josephson 1934, De Long 1998), were the target of an early anti-trust movement that culminated in the election of Woodrow Wilson as US President in 1912. Standard Oil was broken up even before (in 1911) under the Sherman Act of 1890 and converted from a corporation that was tightly controlled by the Rockefeller clan to a managerial corporation. Trust finance disappeared from the early corporate finance textbooks (for example Mead 1912 versus Mead 1922). In 1929 Rockefeller Jr. (14.9%) ousted the scandal ridden Chairman of Standard Oil of Indiana, who enjoyed the full support of his board, only by small margin, an example that was widely used for illustrating how much the balance of power had swung from the “Robber Barons” to management (Berle and Means 1932:82-83, cited in Galbraith 1967), another type of feudal lord. 11 For Berle and Means (1930): “[the] “publicly owned” stock corporation in America… constitutes an institution analogous to the feudal system in the Middle Ages”. 12 They also laid the foundations for some of the World’s finest arts collections, philanthropic foundations and university endowments. 13 This “separation of ownership and control” triggered a huge public and academic debate of “the corporate problem”; see, for example, the Berle and Means symposia in the Columbia Law Review (1964) and the Journal of Law and Economics (1983). Before Means (1931a,b) and Berle and Means (1930, 32) the point was argued in Lippmann (1914), Veblen (1923) Carver (1925), Ripley (1927) and Wormser (1931); see Hessen (1983). 14 Non-Americans often consider shareholder activism as a free-market movement and associated calls for more small shareholder power as a part of the conservative agenda. They are puzzled when they learn that shareholder activism today has its roots in part of the anti-Vietnam War, anti-apartheid and anti-tobacco movements and has close links with the unions. In terms of government (of corporations) there is no 8/168