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Faculty Scholarship at Penn Law

Corporations

Economic Theory

2011

Articles 1 - 2 of 2

Full-Text Articles in Law

The Marginalist Revolution In Corporate Finance: 1880-1965, Herbert J. Hovenkamp Jul 2011

The Marginalist Revolution In Corporate Finance: 1880-1965, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

During the late nineteenth and early twentieth centuries fundamental changes in economic thought revolutionized the theory of corporate finance, leading to changes in its legal regulation. The changes were massive, and this branch of financial analysis and law became virtually unrecognizable to those who had practiced it earlier. The source of this revision was the marginalist, or neoclassical, revolution in economic thought. The classical theory had seen corporate finance as an historical, relatively self-executing inquiry based on the classical theory of value and administered by common law courts. By contrast, neoclassical value theory was forward looking and as a result ...


A Preface To Neoclassical Legal Thought, Herbert J. Hovenkamp Jun 2011

A Preface To Neoclassical Legal Thought, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Most legal historians speak of the period following classical legal thought as “progressive legal thought.” That term creates an unwarranted bias in characterization, however, creating the impression that conservatives clung to an obsolete “classical” ideology, when in fact they were in many ways just as revisionist as the progressives legal thinkers whom they critiqued. The Progressives and New Deal thinkers whom we identify with progressive legal thought were nearly all neoclassical, or marginalist, in their economics, but it is hardly true that all marginalists were progressives. For example, the lawyers and policy makers in the corporate finance battles of the ...