Open Yale Courses

PLSC 270: Capitalism: Success, Crisis and Reform

Lecture 6 - Rise of the Joint Stock Corporation << previous session | next session >>

Overview:

Professor Rae explains how the growing scale and complexity of railroads in the US were foundational to the development of modern capitalism. Operating the railroad system required professional managers and new management techniques, and the scale of railroad financing gave rise to the formation of the joint stock corporation. Professor Rae then discusses how different forms of company ownership differ along liability, liquidity, financial scalability, accountability, and role of ownership dimensions. Joint stock corporations are shown to be extremely efficient ways to raise large amounts of money, even if they suffer principal-agent problems.

Reading assignment:

Chandler, The Visible Hand, "The Railroads: The First Modern Business Enterprises," pp. 79-121.

Class lecture:

Transcript
html
Audio
mp3
Video
medium bandwidth
null
low bandwidth
high bandwidth