The Shareholder Era and the Changing Nature of the Corporation. A Comment on "Managed by the Markets: How Finance Re-Shaped America" by G. Davis (OUP, 2009)

Abstract

The book under review presents a valuable, timely and gripping analysis by Gerald F. Davis. The author purports that finance has shaped the transition from industrial to post-industrial society in the United States [U.S.] over the past three decades. He claims that the U.S. society that orbited around large corporations is increasingly shaped today by financial markets. Due to a Copernican revolution, finance became the new American religion with many adherents willing to accept it on faith. The author quotes Shakespeare who wrote: “all the world’s a stage, and all the men and women merely players.” He explains that the world today seems like a stock market, and all people are merely day traders, buying and selling various species of “capital” and hoping for the big score (p. vii). Davis’s book should be required reading for anyone, whether academic, practitioner, or policy maker, who needs to think critically about finance which, rather than a mechanistic set of transactions, is presented in the book as a social phenomenon that is invading our lives.