Date of Award

2015

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Graduate Group

Sociology

First Advisor

Randall Collins

Abstract

At the end of the nineteenth century, American corporate law changed

into its modern, permissive form.

Emerging first in \NJ[,] the new laws allowed corporations to own each

other, and using them capitalists solved their collective action

problem of ruinous competition, reorganizing American industry in a

great merger wave.

The most famous explanation for why the law changed, the efficiency argument,

has been refuted by economic sociologists and political scientists who instead

argue that the law changed because of the combination of powerful actors

pursuing their interests and contingent conditions such as state fiscal

crises. From this critical juncture, the law developed path-dependently.

But these conditions did not occur in \NJ[,] and the actual

development of the law there, with several anti-incumbent changes

in a relatively short period, do not fit with a path-dependent

model.

Neither does the simultaneous adoption of both permissive corporate

laws modeled on \NJ[']s, and their reaction, restrictive antitrust

laws, across the United States.

To address these problems, this dissertation develops a theoretical

framework in which institutional change is determined by how the

institution serves the interests of incumbents in adjoining fields.

In its first part, this dissertation applies this framework to the

development of corporate law in \NJ over time, comparing 28 failed and

successful attempts to change the law, 1830-1913.

In its second part, it tests this framework on the adoption of

permissive and restrictive corporate laws across the United States, 1889-1915.

Using both qualitative and quantitative methods on new datasets of bills, votes,

laws, politicians, corporations, and taxes, this dissertation finds that how

existing law served political and economic incumbents' interests, by limiting

competition and providing tax revenues, explain its change and persistence.

The power and interest relationships among classes are reflected back

into the state through taxation, mediated by state

capacity. Politicians sit like both spider and fly in a web of

dependencies among actors and policies.

When the web is tight, institutions persist, when it loosens, change

is possible.

Included in

Sociology Commons

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