\u3cem\u3eThe Modern Corporation\u3c/em\u3e as Social Construction

Classic works, Mark Mizruchi and Lisa Fein argued, share a particular fate. Authors often cite classic works without reading them—or without reading them carefully. . . . Yet perhaps no single work fits the above description better than one of the most important books on the large corporation ever published: Adolf Berle and Gardiner Means’s The Modern Corporation and Private Property. One can speculate that few works in the social sciences have been as often cited and as little read. As a consequence, we would expect The Modern Corporation to be a good candidate for either selective interpretation or outright misinterpretation. And as we shall demonstrate, the book did indeed receive such treatment. . . . First, we present what we see as Berle and Means’s primary contributions in The Modern Corporation. Second, we describe various interpretations of this classic and situate these interpretations in their historical contexts. Third, we discuss the extent to which these interpretations provided an accurate account of the state of the American corporation and American business in the post-World War II period. We argue that these interpretations can be reconciled when we take into account the countervailing forces of the state, labor, and the financial community that created the conditions for a moderate, pragmatic approach to corporate governance. Finally, we discuss the changes that have occurred since the postwar period, from the 1970s on, and assess the fate of The Modern Corporation in light of those changes