Political Science 2211E Lecture Notes - Lecture 10: Gardiner Means, Mass Production, Aggregate Demand

• School: Western University
• Department: Political Science
• Course: Political Science 2211E
• Professor: Adam Harmes

Document Summary

Fordism and the rise of the modern corporation. Business is legally separate entity from owners/shareholders. Industrial revolution led to the mergence of big corporations. Jp morgan financed mergers in rail and steel and set off m&a wave. Ma(cid:374)(cid:455) fou(cid:374)ded a(cid:374)d ru(cid:374) (cid:271)(cid:455) i(cid:374)di(cid:448)idual i(cid:374)dustrialists k(cid:374)o(cid:449)(cid:374) as (cid:862)ro(cid:271)(cid:271)er (cid:271)aro(cid:374)s(cid:863) Private corporations owned by individual or families. Owners often specialized in the products they produced. Robber barons retired and sold their shares. Ma(cid:374)(cid:455) fir(cid:373)s (cid:862)(cid:449)e(cid:374)t pu(cid:271)li(cid:272)(cid:863) through a(cid:374) ipo. Came to be owned by a large number of small, unconnected shareholders. Decentralized ownership meant owners no longer ran corporation. 1932 berle-means model of the modern corporation. Board of directors: can veto management decisions, shareholders can vote on certain management decision at agm or through (cid:862)pro(cid:454)(cid:455) (cid:448)otes(cid:863, this was the theory. Realit(cid:455) (cid:449)as that (cid:373)oder(cid:374) (cid:272)orporatio(cid:374) (cid:449)as (cid:272)hara(cid:272)terized (cid:271)(cid:455) (cid:862)(cid:373)a(cid:374)agerial auto(cid:374)o(cid:373)(cid:455)(cid:863) Own shares in many companies- therefore (cid:862)e(cid:454)it(cid:863) rather tha(cid:374) (cid:862)(cid:448)oi(cid:272)e(cid:863)