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Political Economy, Interest Groups, Legal Institutions And The Repeal Of The Bubble Act In 1825, Ron Harris

Ron Harris

For 105 years, beginning with the enactment of the Bubble Act in 1720, the free and spontaneous formation of joint-stock companies in England was prohibited. The only legal course of action opened to entrepreneurs seeking company formation was to first obtain specific state authorization, in the form of a charter or an act. During this period the English economy experienced unprecedented growth and substantial structural changes, which many still refer to as the industrial revolution. This legal framework of business organization seems to have formed a constraint upon the economy, inducing entrepreneurs to organize, willingly or reluctantly, in family firms, …