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We live in a system described in obsolete terms. We have come to believe our own repeated declarations that our society is based on individual initia… - Adolf A. Berle
" "We live in a system described in obsolete terms. We have come to believe our own repeated declarations that our society is based on individual initiative – whereas, in fact, most of it is no more individual than an infantry division. We assume that our economic system is based on “private property.” Yet most industrial property is is no more private than a seat in a subway train, and indeed it is questionable whether much of it can be called “property” at all. We indignantly deny that we are collectivist, yet it is demonstrable that more than two-thirds of our enterprise is possible only because it is collectivist: what is really meant is that the State did not do the collectivizing.
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About Adolf A. Berle
Adolf Augustus Berle, Jr. (January 27, 1895 – February 17, 1971) was an American lawyer, educator, author, and diplomat. He was the author of , a groundbreaking work on corporate governance, and an important member of U.S. President Franklin Roosevelt's "".
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Adolf Augustus Berle, Jr.
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Additional quotes by Adolf A. Berle
[The corporation is an invaluable auxiliary to the conduct of foreign affairs by the Government, and] has become an international as well as a national instrument. It is a mighty institution which thus far has not become, and has manifested no great desire to become, an independent political force. In international life it is an experiment in non-national organization, pledged only to discharge certain economic functions.
In its new aspect the corporation is a means whereby the wealth of innumerable individuals has been concentrated into huge aggregates and whereby control over this wealth has been surrendered to a unified direction. The power attendant upon such concentration has brought forth princes of industry, whose position in the community is yet to be defined. The surrender of control over their wealth by investors has effectively broken the old property relationships and has raise the problem of defining these relationship anew. The direction of industry by persons other than those who have ventured their wealth has raised the question of the motive force back of such direction and the effective distribution of the returns from business enterprise.
Where such a separation is complete one group of individuals, the security holders and in particular the stockholders, performs the function of risk-takers and suppliers of capital, while a separate group exercises control and ultimate management. In such a case, if profits are to be received only by the security holders, as the traditional logic of property would require, how can they perform both of their traditional economic roles? Are no profits to go to those who exercise control and in whose hands the efficient operation of enterprise ultimately rests? ...Furthermore, if all profits are earmarked for the security holder, where is the inducement for those in control to manage the enterprise efficiently? When none of the profits are to be received by them, why should they exert themselves beyond the amount necessary to maintain a reasonably satisfied group of stockholders.
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