The Modern Corporation and Gardiner Means’s Critique of Neoclassical Economics

Abstract

There is no doubt that Adolf Berle and Gardiner Means's The Modern Corporation and Private Property has been one of the most influential books of the twentieth century. For neoclassical economists, the book's importance lies in its arguments about the separation of ownership from control and the implication of this for the assumption of profit maximization. However, they do not view the book as a critical attack on their theory, despite both Means's and Berle's insistence that it was just that (see e.g. [Berle 1965, p. 25]). On the other hand, institutionalists, post Keynesians, and other non-neoclassical economists take the view propounded by W. Ripley, F. Taussig, and W. C. Mitchell in 1936 that The Modern Corporation constituted a brilliant and sustained critique of neoclassical economic theory, with the separation of ownership from control undermining the profit maximization assumption as the most salient feature of the critique: