After Managerial Capitalism

Corporations maximize shareholder returns—or so goes the conventional wisdom. It was not always so. In the middle decades of the last century, lawmakers, business leaders, and journalists agreed that the nation's largest and most powerful corporations had obligations to a raft of stakeholders that included (in addition to shareholders) employees, customers, and the localities in which they had set up shop. Some historians have labeled this consensus “corporate liberalism”; contemporaries called it “social responsibility.” Still others, including, most notably, Alfred D. Chandler Jr., regarded these corporate obligations as emblematic of a new stage in economic development—“managerial capitalism”—whose origins could be traced back to the railroad, the country's first “big business.” This consensus had durable consequences, as Kenneth J. Lipartito and others demonstrated in Corporate Responsibility: The American Experience (2012), a multiauthor survey of shifting assumptions regarding corporate governance in the United States from the colonial era to the present.