The American Economic Republic
A society in which production is governed by blind economic forces is being replaced by one in which production is being carried on under the ultimate control of a handful of individuals. The economic power in the hands of the few persons who control a giant corporation is a tremendous force which can harm or benefit a multitude of individuals, shift the currents of trade, bring ruin to one community and prosperity to another. The organizations they control have passed beyond the realm of private enterprise—they have become more nearly social institutions.
It is thirty-one years since Adolf A. Berle and Gardiner C. Means published The Modern Corporation and Private Property (whence the quotation above), but three intervening decades have not outmoded this extraordinary book. To be sure, some of the names included on their famous list of the 200 largest non-banking corporations have been displaced by other names, and the economic power of the list itself has not grown quite so alarmingly as Berle and Means feared (in a moment of fantasy they suggested that by the year 2300 the 200 giants might be fused into one single immense corporate organism with a business life expectancy of over 1,000 years). But the issues posed by The Modern Corporation and Private Property are no less resonant and no less contemporary on that account. For as the title of the book made clear, this was not just an inquiry into economic performance. It was also, and perhaps more profoundly, an inquiry into economic philosophy. In a fundamental sense it questioned not only the practices of the great concentrate of economic power, but the very right of that concentrate to exist. Having revealed traditional economic theory to be little more than a pious theology, it asked what was left to describe the American economic system except a Realeconomiic of privilege for privilege’s sake?
For Gardiner Means, economist and statistician, the economic problems raised by the concentrate—market power, price-fixing, collusion and competition—marked out the road to be followed in later work. But for Berle, professor of law, diplomatist and amateur politician, it was the philosophic issue which was the more attractive. “It is conceivable—indeed it seems almost essential if the corporate system is to survive—“ he wrote at the conclusion of the book, “that the ‘control’ of the great corporations should develop into a purely neutral technocracy, balancing a variety of claims by various groups in the community and assigning to each a portion of the income stream on the basis of public policy rather than private cupidity.”
“Is this suggestion of a responsible business community merely a dream?” he asked elsewhere. Thirty years later, The American Economic Republic constitutes his answer.
It is not, unhappily, the best of his books. The 20th Century Capitalist Revolution (1953) is tighter and sharper; Power without Property anticipates what is to come later and is more interesting. By contrast with these, The American Economic Republic sprawls and repeats and vaporizes …