A HISTORY OF FINANCE-INDUSTRY RELATIONSHIPS IN THE UNITED STATES: ORIGINS AND REMEDIES TO THE FINANCIALIZATION OF CORPORATIONS

Abstract

This article revisits the history of the relationships between finance and industry in the United
States. This was first suggested by Hyman Minsky, but this analysis is focused on shareholding with a view to understanding the current influence of shareowners on corporations.
We examine the evolution of the two institutions that allow shareholders to weigh on firms'
governance: market liquidity and the voting power associated with the concentration of
shares. We underline that concentration has always been present, despite the dispersion of
shareholdings. This means that it is the existence of a constraint on liquidity that has allowed
managers to maintain, to a point, the autonomy that they won during the 20th century. We
suggest that this constraint is based on capital controls that are either internal or external to
the United States