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Resource Movement And The Legal System, Herbert J. Hovenkamp
Resource Movement And The Legal System, Herbert J. Hovenkamp
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In "The Problem of Social Cost" Ronald Coase considered several common law disputes among neighbors whose economic activities conflicted with one another. For example, Sturges v. Bridgman was a nineteenth century nuisance case involving a pediatrician whose practice was hindered by his neighbor, a confectioner whose operation required a noisy mechanical mortar & pestle. Coase showed that if high transaction costs did not interfere, private bargaining would provide a solution which he characterized as efficient -- namely, that the right to continue would be given to the person who valued it most. For example, if the pediatrician valued the right …
Shareholders And Social Welfare, William W. Bratton, Michael L. Wachter
Shareholders And Social Welfare, William W. Bratton, Michael L. Wachter
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This article addresses the question whether (and how) the shareholders matter for social welfare. Answers to the question have changed over time. Observers in the mid-twentieth century believed that the socio-economic characteristics of real world shareholders were highly pertinent to social welfare inquiries. But they went on to conclude that there followed no justification for catering to shareholder interest, for shareholders occupied elite social strata. The answer changed during the twentieth century’s closing decades, when observers came to accord the shareholder interest a key structural role in the enhancement of economic efficiency even as they also deemed irrelevant the characteristics …