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Abstract

Readers game enough to work through all three hundred pages of The Modern Corporation and Private Property looking for insights on corporate law today encounter two, apparently contradictory, lines of thought. One line, set out in Books II and III, resonates comfortably with today’s shareholder-centered corporate legal theory. Here the book teaches that even as ownership and control have separated, managers should function as trustees for the shareholders and so should exercise their wide-ranging powers for the shareholders’ benefit. The other line of thought emerges in Books I and IV, where The Modern Corporation encases this shareholder trust model in discussions of corporate power and social welfare. These discussions resonate today with those who advocate corporate social responsibility. Here, the separation of ownership and control implies public responsibilities: “It is entirely possible . . . that the corporate profit stream in reality no longer is private property, and that claims on it must be adjusted by some test other than that of property right.”