Adolf Berle and Gardiner Means are commonly credited with having identified the separation of ownership and control in public corporations as the central problem of corporate governance. See The Modern Corporation and Private Property (1932). Dalia Tsuk, by the way, has a very interesting recent piece on how our understanding of Berle and Means' work has evolved over time. I recommend it. From Pluralism to Individualism: Berle and Means and 20th-Century American Legal Thought.
In fact, however, Berle and Means were not the first to document the phenomenon of separation of ownership and control. Herbert Hovenkamp, in his wonderful book Enterprise and American Law: 1836-1937 (1991), shows that Alfred Marshall had made the same point in 1890, as had William W. Cook in 1891.
All of which comes as preface to the fact that I have found an online version of William Cook's philippic The Corporation Problem: The Public Phases of Corporations, Their Uses, Abuses, Benefits, Dangers, Wealth, and Power, With a Discussion of the Social, Industrial, Economic, and Political Questions to Which They Have Given Rise. Cook writes:
Without corporations America would be a different nation and have had a different history. The Civil War would have been more dangerous to the Republic. The present railroad system could not have been built, and the Pacific Coast and the Eastern States would not have been bound by ligaments of steel to a common interest. ...
And yet notwithstanding all the advantages, material, intellectual, and moral, which have been derived from corporations, there is much to be said against them. And they have two peculiarities which have led to these abuses. These are, first, the ease with which all responsibility for bad acts is placed upon the corporation itself, while the real perpetrators are concealed; second, the separation of the stockholders from the corporate agents, of the investor from the investment, of the principal from the agent, with the expectation on the part of the investor, the principal, the stockholder, that profits will be made, honestly if possible, but that profits will be made.
What's fascinating to me is how strongly that passage confirms the relevance of Ecclesiastes 1:9 to the study of corporate governance. These are precisely the same problems with which we continue to struggle today.
Anyway, I'm about a third of the way into the monograph and may report back as needed.
