Recommendations re. the corporation

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Recommendations re. the corporation

Postby dtcochrane » Sun Jan 31, 2010 7:33 pm

Hello all!

I am looking for any recommendations on a good text that critically examines the diverse mechanisms of control and accumulation made possible by the legal form of the institution? I want something more than a mere description, as I'd expect the average business and the law to treat the topic. I like to understand a bit better what the corporate form makes possible for owners that other forms of ownership do not.

For example, reading about the amalgamations in the Kimberley mines that eventually resulted in the De Beers monopoly, it is clear that the corporate form allowed that amalgamation to go further than sole ownership did. Individuals had already started buying up claims. Those with successful claims were able to use their earnings to buy out others. However, eventually these agglomerated claims under a single ownership became too big, and individual owners lacked the liquidity or access to credit to buy out each other. So, several owners would get together and form a joint-stock enterprise. This itself allowed amalgamation to reach a new stage, as several claim holders would bring their claims together to be worked jointly. It also allowed their individual liquid assets to be pooled to buy out other owners who did not subscribe to a joint-stock scheme. Finally, many banks would lend against scrip, making larger quantities of credit available. On the other hand, the joint-stock form seemed to require more business acumen and most of these diggers were sorely lacking[1], which may help explain why none of the figures who emerged at the top of the De Beers monopoly were actually diggers.

In this one example, the corporate form 1) allowed a size barrier to be hurdled, 2) created larger pools of liquid assets, 3) opened access to larger quantities of credit. I can also surmise that these corporations also enjoyed a tighter relationship with the banks and the government. These seem to be just five possibilities that the corporate form made possible. What else might I have missed?

Any recommendations would be greatly appreciated.


[1] Using Veblenian terms, they were more 'workmen' than 'sportsmen.'
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