4 ms·

What was the reason before 1960s, when this idea of shareholder value, for companies to exist?

by mempko 3y ago

Kerrick 3y ago
If I remember anything from my high school social studies class, the reason was the ability to spread investment risk across multiple investors while also shielding the investors and employees from some personal legal liability. I think I even remember that companies/corporations predate stock exchanges.
- Pet_Ant 3y ago
  > Remember that companies/corporations predate stock exchanges. While not definitive, ChatGPT says that: > The idea of organizing a group of people to work towards a common goal for profit or mutual benefit has evolved over centuries. The modern concept of a company, with legal structures and formalized business practices, has its roots in the emergence of capitalism during the Industrial Revolution in the 18th and 19th centuries. Whereas the first stock exchange is somewhere between 1300 and 1600: https://en.wikipedia.org/wiki/Stock_exchange#History https://en.wikipedia.org/wiki/Stock_exchange#History Wikipedia doesn't have a history section on it's page for company, but it says this: > By 1303, the word company referred to trade guilds. Usage of the term company to mean "business association" was first recorded in 1553, and the abbreviation "co." dates from 1769. You can tweak your definition by the means you'd like, but I think an honest assessment would be at this point to say they were concurrent. https://en.wikipedia.org/wiki/Company#Semantics_and_usage https://en.wikipedia.org/wiki/Company#Semantics_and_usage So your statement seems incorrect. I'm no expert, just curious.
sdsd 3y ago
A company isn't the same as a corporation. A corporation is a legal privilege granted by the government to give a company legal personhood. Thus the word "corporation", from latin "corpus", signifying that the state considers this specific company to be a single, legal body. Corporations aren't a free market concept, it's a way for the state to give special protections to certain companies that need it for some prosocial reason. A short history: https://newint.org/features/2002/07/05/history https://newint.org/features/2002/07/05/history Basically, the original idea is, a corporate charter is granted to create a corporation, which acts on behalf of its shareholders (who the government trusts, have some worthy interest in mind).

What was the reason before 1960s, when this idea of shareholder value, for companies to exist?

by mempko 3y ago

What was the reason before 1960s, when this idea of shareholder value, for companies to exist?

If I remember anything from my high school social studies class, the reason was the ability to spread investment risk across multiple investors while also shielding the investors and employees from some personal legal liability. I think I even remember that companies/corporations predate stock exchanges.

Pet_Ant 3y ago
> Remember that companies/corporations predate stock exchanges. While not definitive, ChatGPT says that: > The idea of organizing a group of people to work towards a common goal for profit or mutual benefit has evolved over centuries. The modern concept of a company, with legal structures and formalized business practices, has its roots in the emergence of capitalism during the Industrial Revolution in the 18th and 19th centuries. Whereas the first stock exchange is somewhere between 1300 and 1600: https://en.wikipedia.org/wiki/Stock_exchange#History https://en.wikipedia.org/wiki/Stock_exchange#History Wikipedia doesn't have a history section on it's page for company, but it says this: > By 1303, the word company referred to trade guilds. Usage of the term company to mean "business association" was first recorded in 1553, and the abbreviation "co." dates from 1769. You can tweak your definition by the means you'd like, but I think an honest assessment would be at this point to say they were concurrent. https://en.wikipedia.org/wiki/Company#Semantics_and_usage https://en.wikipedia.org/wiki/Company#Semantics_and_usage So your statement seems incorrect. I'm no expert, just curious.

sdsd 3y ago

A company isn't the same as a corporation. A corporation is a legal privilege granted by the government to give a company legal personhood. Thus the word "corporation", from latin "corpus", signifying that the state considers this specific company to be a single, legal body. Corporations aren't a free market concept, it's a way for the state to give special protections to certain companies that need it for some prosocial reason. A short history: https://newint.org/features/2002/07/05/history https://newint.org/features/2002/07/05/history Basically, the original idea is, a corporate charter is granted to create a corporation, which acts on behalf of its shareholders (who the government trusts, have some worthy interest in mind).