Property and Economic Power

Abstract

In his well-known theory of a declining capitalism, Joseph Schum peter sees of property as unavoidable consequence of capitalist process. It is especially corporation, as the giant unit of control, that eliminates proprietor and associated proprietary interests. Corporations are directed by nonowning man? agers who tend to acquire employee attitudes. Large share? holders act as absentee owners; small holders feel ill used by corpora? tions. The combined effect of these changes within corporations has been that the capitalist process . . . takes life out of idea of property ... it looses grip . . . upon actual ability to do what one pleases with ones own. The result is an evaporation of ma? terial substance of property. Private property ceases to be a funda? mental institution of private capitalism. Dematerialized, defunc tionalized, and absentee ownership does not impress and call forth moral allegiance as vital form of property did. [Schumpeter, 1950, pp. 141-142] Since this was written about forty years ago, there has been an exceptionally large accumulation of assets in large corporations. Neither has property evaporated, nor has corporate capitalism suf? fered any visible decline. Far from seeing themselves as employees, top managers have eagerly increased corporate property and steadily raised their personal income from corporations. Top managers speak freely of my company as if they were personal owners. They employ specialists to refurbish public image of corpora? tion, and steadily watch for opportunities to take over other com? panies. Accumulation and agglomeration of corporate property con? tinues unabated, and property power is one of most important forms of economic power of our time. While correctly expecting further growth in assets, why did Schum? peter misunderstand nature of change in corporate property structure? Briefly, he employed a one-sided definition of property which includes only personal proprietorship. Appropriate emotions generate a property mindedness that provides sympathy and public