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Corporate Governance, The Firm and Investor Capitalism

Alexander Styhre

The shift from managerial capitalism to investor capitalism, dominated by the finance industry and finance capital accumulation, is jointly caused by a variety of institutional, legal, political, and ideological changes, beginning with the 1970s’ downturn of the global economy. This book traces how the incorporation of businesses within the realm of the state leads to both certain benefits, characteristic of competitive capitalism, and to the emergence of new corporate governance problems emerges. Contrasting economic, legal, and managerial views of corporate governance practices in contemporary capitalism, the author examines how corporate governance has been understood and advocated differently during the New Deal era, the post-World War II economic boom, and the after 1980 in the era of free market advocacy.
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Prologue: the Great Recession Durcharbeitung

Alexander Styhre


Capitalism does not invent hierarchies, any more than it invented the market, or production, or consumption; it merely uses them. In the long procession of history, capitalism is the later-comer. It arrives when everything is ready.

Fernand Braudel (1977: 75)

The Annales school historian Emmanuel Le Roy Ladurie (1983) remarks that in the period of 1350 to 1750 there was only a modest population growth in Europe. The continent was held captured by a military-state apparatus, dominated by the aristocracy, and with the monarchy as a largely military institution, implicated in the European balance of power (Le Roy Ladurie, 1983: 15). To maintain the power balance, constant wars and skirmishes tortured the European population and prevented economic development and population growth for more than four centuries. ‘From the fourteenth to the seventeenth century inclusive, the economy was servant not master’, Le Roy Ladurie (1983: 23) writes. Only after the beginning of the industrialization process, itself derived from the advancement of the bourgeoisie at the expense of the aristocracy and its primary institution the monarchy, could the economy start to grow. In this case, the facts by and large speak for themselves: ‘[i]n 1328, the French population stood at 17 million; it was 19 million in 1700 – still about the same. But by 1879, it had reached 27 million and had risen to almost 40 million by the time of the Franco-Prussian war of 1870’ (Le Roy Ladurie, 1983: 25). Roughly after 1750, midway...

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