The Literature of Economics: The Case of Berle and Means

Abstract

THERE are not many books fifty years old whose central argument is identified for modern economists simply by naming the work, but Berle and Means's The Modern Corporation and Private Property is surely one. Every schoolboy, as Macaulay would say, knows that they discovered or asserted or proved or were otherwise joined to the proposition that ownership and control have been separated in the large corporation. Moreover this separation had large, but not easily recalled, effects on the conduct of corporate enterprise. This essay will examine the reception of this book, particularly by the economics profession, in its first decade. Our interest will be not so much in the novelty or validity of the book's message as in how it was understood and received. The process by which a proposition of great potential scientific and political significance gets established in a discipline is fascinatingly mysterious. Our investigation will support the view that doctrines and theories congenial to an intellectual milieu are accepted quickly and widely, although not necessarily as uncritically as the work of Berle and Means was accepted.