From Social Control to Financialization
Before the nineteenth century corporations were formed for public purposes under special charters by which states limited corporate powers. Social control exercised by states under special charters became a limit on business achieving stabilized scarcity to protect against cutthroat price competition. The general incorporation statute adopted by New Jersey in 1888 allowed corporations to avoid the limitations of special charters and the ultra vires doctrine. Other states followed. By 1899 the formation of corporations increased by 900 percent in New Jersey. Despite precedents describing corporations as artificial entities and distinguishing the corporation from its shareholders, the Supreme Court in 1886 identified the corporation as a person and in 1890 recognized intangible property as legally protected property. The trend toward concentration and consolidation by the twenty-first century had the largest corporations controlling 80 percent of corporate assets and two-thirds of corporate net income.
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