The Property Revolution 2016

The Property Revolution 2012

The Property Revolution

The separation of ownership and control resulting from the corporate and managerial revolutions has changed the concept of corporate property. The typical stockholder in a large company provides a share of the capital necessary for production, but he gives up control over how that capital is used to the management of the company . All that he has left is a claim on a share of the profits as dividends and the right to sell his interests, hopefully at a capital gain. The spiritual value of ownership-the satisfaction of creatively utilizing productive assets-is gone. All that the stockholder actually "owns" is a piece of paper that gives him certain rights to the benefits of property. It is only this that he can use or dispose of, not the assets of the issuing corporation.

The property revolution consisted of a diffusion of rights to the same concrete object. In America the traditional conception of "private property" emphasized concentration of all property rights in the hands of an individual owner. There is no reason, however, why various kinds of rights cannot attach to the same object. "Property consists, first, not of things, but of rights; it is not a concrete object of reference, but a socially recognized claim.1112 A broad distinction can be made between the right of control and the right of beneficial ownership. Cable and Means used the concepts of "active property" and "passive property" to make this distinction.13 Active property involves control of how property is used without enjoying benefits derived from it; passive property confers the right to enjoy the benefits of property without having the right to determine how property is used.

Thus instead of asking, "Who owns the corporation?" we should ask, "What rights are represented in corporate property?" Clearly corporate property does not have the unlimited ownership of individual private property. Several differing groups have rights in the same corporate property. Stockholders, bondholders, and creditors have investment rights. They have a right to a return from funds placed at the disposal of the corporation. They are not, however, necessarily individual persons-they may be trust or pension funds, other corporations, or other organizational investors. Management actually administers the company and therefore. has control rights over corporate assets. If a powerful minority bloc of stockholders is able to wrest control from management, its power is based not so much on stock holdings as on its position in the corporate power structure. Since the property of the company can be controlled through regulation by governmental bodies, it also is subject to regulatory rights. Finally, labour in its demands for job security is in effect claiming that it has job rights in corporate property. It is this fragmentation of corporate property that is the essence of the property revolution.

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