IDEAS home Printed from https://ideas.repec.org/a/bpj/maneco/v2y2015i2p195-214n4.html
   My bibliography  Save this article

Herbert Spencer on Corporate Governance

Author

Listed:
  • Mingardi Alberto

    (Director General of Istituto Bruno Leoni (Italy). Affiliate, Economic Science Institute at Chapman University (USA))

Abstract

Herbert Spencer (1820–1903) wrote on the emergence of railroad corporations and corporate governance matters. Since Spencer is typically considered a staunch libertarian, the fact that he expressed some criticisms over the emergent corporate capitalism might surprise many. But what Spencer did was mainly identifying the so-called “agency problem,” which he considered very much worth addressing, especially in a market economy. Writing on the “railway mania,” Spencer was appalled by fraudulent schemes. But he did not consider them an inevitable feature of the capitalist economy. He focused on the institutional dimension of conflict of interests within the then-emerging corporation, and suggested to uphold freedom of contract in its strictest meaning, as to offset those. Spencer’s theory may be seen as a pure freedom of contract answer to agency problems, that stands in striking contrast with theories – such as Adolf Berle and Gardiner Means’s – that stresses the need for a technocratic solution, to make corporate capitalism viable in society.

Suggested Citation

  • Mingardi Alberto, 2015. "Herbert Spencer on Corporate Governance," Man and the Economy, De Gruyter, vol. 2(2), pages 195-214, December.
    • Handle: RePEc:bpj:maneco:v:2:y:2015:i:2:p:195-214:n:4
    DOI: 10.1515/me-2015-6004
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/me-2015-6004
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/me-2015-6004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hilton, Boyd, 2008. "A Mad, Bad, and Dangerous People?: England 1783-1846," OUP Catalogue, Oxford University Press, number 9780199218912, Decembrie.
    2. Demsetz, Harold, 1983. "The Structure of Ownership and the Theory of the Firm," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 375-390, June.
    3. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73(2), pages 110-110.
    4. Campbell, Gareth & Turner, John D., 2012. "Dispelling the Myth of the Naive Investor during the British Railway Mania, 1845–1846," Business History Review, Cambridge University Press, vol. 86(1), pages 3-41, April.
    5. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73(4), pages 351-351.
    6. Casson, Mark, 2009. "The World's First Railway System: Enterprise, Competition, and Regulation on the Railway Network in Victorian Britain," OUP Catalogue, Oxford University Press, number 9780199213979, Decembrie.
    7. Leonard, Thomas C., 2009. "Origins of the myth of social Darwinism: The ambiguous legacy of Richard Hofstadter's Social Darwinism in American Thought," Journal of Economic Behavior & Organization, Elsevier, vol. 71(1), pages 37-51, July.
    8. Harold Pollins, 1954. "The Marketing Of Railway Shares In The First Half Of The Nineteenth Century," Economic History Review, Economic History Society, vol. 7(2), pages 230-239, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Iryna Akimova & Gerhard Schwödiauer, 2004. "Ownership structure, corporate governance, and enterprise performance: Empirical results for ukraine," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 10(1), pages 28-42, February.
    2. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    3. Grossman, Sanford J. & Hart, Oliver D., 1988. "One share-one vote and the market for corporate control," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 175-202, January.
    4. Derek Horstmeyer & Kara Wells, 2020. "When Do Governance Mechanisms Matter Most?," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 10(01), pages 1-52, February.
    5. Noel O'Sullivan & Pauline Wong, 1999. "Board composition, ownership structure and hostile takeovers: some UK evidence," Accounting and Business Research, Taylor & Francis Journals, vol. 29(2), pages 139-155.
    6. Johan E. Eklund, 2009. "Corporate Governance and Investments in Scandinavia – Ownership Concentration and Dual-Class Equity Structure," Chapters, in: Per-Olof Bjuggren & Dennis C. Mueller (ed.), The Modern Firm, Corporate Governance and Investment, chapter 7, Edward Elgar Publishing.
    7. Becker, Bo & Cronqvist, Henrik & Fahlenbrach, Rüdiger, 2011. "Estimating the Effects of Large Shareholders Using a Geographic Instrument," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 46(4), pages 907-942, August.
    8. Carline, Nicholas F. & Linn, Scott C. & Yadav, Pradeep K., 2014. "Corporate governance and the nature of takeover resistance," CFR Working Papers 14-01, University of Cologne, Centre for Financial Research (CFR).
    9. David B. Audretsch & Erik E. Lehmann, 2013. "Corporate governance in newly listed companies," Chapters, in: Mario Levis & Silvio Vismara (ed.), Handbook of Research on IPOs, chapter 9, pages 179-206, Edward Elgar Publishing.
    10. Pradiptarathi PANDA & Jinesh PANCHALI, 2019. "Corporate ownership structure and performance: An enquiry into India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(621), W), pages 93-110, Winter.
    11. Nguyen, Thi Tuyet Mai, 2017. "An examination of independent directors in Vietnam," OSF Preprints ay6dv, Center for Open Science.
    12. Johannes Lundberg, 2022. "Agency Theory’s “Truth Regime”: Reading Danish Pension Funds’ Decisions Regarding Shell from the Perspective of Agency Theory," Sustainability, MDPI, vol. 14(22), pages 1-15, November.
    13. ATM Adnan & Nisar Ahmed, 2019. "The Transformation Of The Corporate Governance Model: A Literature Review," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 8(3), pages 7-47.
    14. Kamath Shyam J., 1994. "Privatization: A Market Prospect Perspective," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 5(1), pages 53-104, March.
    15. Gugler, Klaus & Mueller, Dennis C. & Yurtoglu, B. Burcin, 2008. "Insider ownership, ownership concentration and investment performance: An international comparison," Journal of Corporate Finance, Elsevier, vol. 14(5), pages 688-705, December.
    16. Robert Campbell & Chinmoy Ghosh & Milena Petrova & C. Sirmans, 2011. "Corporate Governance and Performance in the Market for Corporate Control: The Case of REITs," The Journal of Real Estate Finance and Economics, Springer, vol. 42(4), pages 451-480, May.
    17. Gorton, Gary & Schmid, Frank, 1999. "Corporate governance, ownership dispersion and efficiency: Empirical evidence from Austrian cooperative banking," Journal of Corporate Finance, Elsevier, vol. 5(2), pages 119-140, June.
    18. Domingo Javier Santana Martín & Inmaculada Aguiar, 2004. "Propiedad y blindaje de las empresas cotizadas españolas. 1996-2002," CNMV Documentos de Trabajo CNMV Documentos de Trabaj, CNMV- Comisión Nacional del Mercado de Valores - Departamento de Estudios y Estadísticas.
    19. J. Mulherin, 2005. "Corporations, collective action and corporate governance: One size does not fit all," Public Choice, Springer, vol. 124(1), pages 179-204, July.
    20. Eklund, Johan E, 2009. "One Share – One Vote: new evidence from the Nordic countries," Working Paper Series in Economics and Institutions of Innovation 168, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:maneco:v:2:y:2015:i:2:p:195-214:n:4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.