1. Contested Continuity of Corporate Form Ann E. Davis, Marist College ASSA, SF, January, 2016

2. Historical institutional investigation of finance and technology  Rather than assume abstract “autopoietic” reproducing system (Luhmann 1995), investigate and explore the system reproduction in social and historical context.  The corporate form has persisted since the twelfth century in Europe, yet with constant changes.  An exploration of the business corporation in the nineteenth century US electric utility industry provides a useful case study of the changing corporate form, in the context of finance and technology.

3. Contrasting Approaches Self-reproducing  Luhmann (autopoietic)  Padgett (autocatalytic) Historical Institutional; Linguistic  Marx, Schumpeter; Postone  Polanyi  Foucault  Austin; Searle  Poovey

4. Money as Abstract Symbol System  Finance itself can be understood as a self-referential, self-reproducing system (Luhmann 1995)

5. Money as Social Institution  Building on language, social institutions have a history and corresponding expertise (Searle 2010; Poovey 1998, 2008; Davis 2015)  “Capital” can be understood as an abstract “agent,” in the context of specific rules and norms (Postone 1996)

6. Case study: electric utility industry  Electricity discovery in the eighteenth century  Electricity electromagnetic spectrum (Faraday)  Invention of specific devices (dynamo, arc lights, incandescent light bulb) in US and Europe (Brush, Thomson, Edison, Tesla, Westinghouse), along with telegraph and telephone  Public exhibitions in US and Europe; press coverage  Design of “systems” for production and distribution to compete with gas (Edison, Thomson, Brush)

7. Competing Towns and Cities in Nineteenth Century US  In the context of suspicion of centralized national power, towns and cities compete for development  Resistance to national financial system and corporations  Cities and states are the first sponsors of infrastructure, such as streets, roads, canals and railroads  Municipal light and power options include electric light rail and arc lighting as well as gas

8. Commercial development in late nineteenth century US  Financing of laboratory by consolidating patents (Edison)  Separate incorporation of manufacturing companies  Electric utilities in towns and cities (central stations as well as isolated units)  Finance-led merger of companies of inventors (Thomson-Houston in Boston with Edison General Electric in NJ) into manufacturing company, GE  Extension of scale of central stations to regional holding companies (Insull in Chicago)

9. Commercialization of Science  Gentleman scientist  Inventor/businessman (Edison; Brush; Thomson)  Financier (Morgan) and entrepreneur (Insull)  Preference of larger scale to forestall competition, regardless of requirements for large capital investment  Choice of price to facilitate market expansion (Yankubovitch, Granovetter and McGuire 2005)  Complementarity of finance and industry (rather than finance-led (Sylla and Rousseau) or industry-led (Robinson))  Network industries lower transaction costs for extension of market

10. Incorporation  Companies to protect patents  Companies to organize production  Conception of “system”  Investment to develop components to advance innovation of complete systems  Requirement of affordable system, competing with existing technologies (electricity vs. gas)  Corporation as vehicle of finance, production, revenue, repayment, and extension of scale, as well as ongoing research and development

11. Money as “General Wheel of Circulation”  Smith (money as part of capital stock and also serves as “general wheel of circulation”)  Capital stock as method of improving labor productivity  Special role of network technologies (transportation, communication, power) to support market expansion  Attraction of investment to “system”  Later role of government in regulation (Insull’s preference of regulated utility to municipal or public power) vs. public industry or legal privileges to private business corporation

12. Alternative Trajectories  US private business corporation excludes local municipal government and labor (US vs Europe)  Economics of scale (AC vs. DC; Tesla vs. Edison)  Public vs. private power (FDR vs. Insull)

13. Finance and Technological Complementarity  Shaping of scientists into new role of entrepreneur/businessman  Competition among inventors for financing and commercialization  Fascination of public in invention and investment  Competition of local and state governments for development infrastructure via financing and incorporation  Role of finance/entrepreneur in extending scale  Shift from private investment banks to public finance and regulation in twentieth century

14. Conclusion  Social systems have capacity for reproduction  Social systems have social mechanisms for reproduction (language, symbols, meaning, discipline, communication)  Market is a special meaning system  Financiers and entrepreneurs, the “great men” of history (Morgan and Insull), understood the performative aspects of the market system (Poovey; MacKenzie), and envisioned, communicated, and enacted the new organizations and financial vehicles  Developmental state with visions of “empire,” including competition with Great Britain and acquisition of continental US

15. Method of Historical Institutional Economics  Concept (corporation)  Institution (emergence of private business corporation in context of financial circuit in nineteenth century US)  Knowledge (professionalization and separation of science from business and engineering from economics)