[1]: 91  The Modern Corporation and Private Property, first brought forward issues associated with the widely dispersed ownership of publicly traded companies.

[1]: 91  Compared to the notion of personal private property, say as one's laptop or bicycle, the functioning of modern company law “has destroyed the unity that we commonly call property.” This occurred for a number of reasons, foremost being the dispersal of shareholding ownership in big corporations: the typical shareholder is uninterested in the day-to-day affairs of the company, yet thousands of people like him or her make up the majority of owners throughout the economy.

Justification for their inheritance must be sought outside classic economic reasoning.”[5] The position of stockholders' profit, said Berle, “can be founded only upon social grounds.

Ideally the stockholder’s position will be impregnable only when every American family has its fragment of that position and of the wealth by which the opportunity to develop individuality becomes fully actualized.” Book I is entitled, "Property in Flux: Separation of the attributes of ownership under the corporate system" and provides a general picture of the shifting economic power structure that Berle and Means observed.

This first chapter explores the basic thesis of Berle and Means, that with the emergence of the corporation, the very institution of private property has been fundamentally altered.

The direction of industry by persons other than those who have ventured their wealth has raised the question of the motive force back of such direction and the effective distribution of the returns from business enterprise.”[6] “Such an organization of economic activity rests upon two developments, each of which has made possible an extension of the area under unified control.

The factory system, the basis of the industrial revolution, brought an increasingly large number of workers directly under a single management.

Then, the modern corporation, equally revolutionary in its effect, placed the wealth of innumerable individuals under the same central control.

The property owner who invests in a modern corporation so far surrenders his wealth to those in control of the corporation that he has exchanged the position of independent owner for one in which he may become merely recipient of the wages of capital.”[7] Berle and Means continue by emphasizing how increasing dispersion of stock ownership under a shareholder public is necessary for those in control to enforce their position.

Whereas the organization of feudal economic life rested upon an elaborate system of binding customs, the organization under the system of private enterprise has rested upon the self-interest of the property owner - a self-interest held in check only by competition and the conditions of supply and demand...

It has been assumed that, if the individual is protected in the right both to use his own property as he sees fit and to receive the full fruits of its use, his desire for personal gain, for profits, can be relied upon as an effective incentive to his efficient use of any industrial property he may possess.”[10] Shareholders, it is stated “cannot be motivated by those profits to a more efficient use of the property, since they have surrendered all disposition of it to those in control of the enterprise.”[11] The second chapter puts forward the view that corporations have entered, grown and become dominant first in the fields of public utilities, common carriers, banks and insurance companies and last in the areas of personal service and agriculture.

The organizations which they control have passed far beyond the realm of private enterprise - they have become more nearly social institutions.”[14] In this Chapter, Berle and Means present considerable statistical evidence of the growing dispersion of stock ownership around the economy.

Physical property capable of being shaped by its owner could bring to him direct satisfaction apart from the income it yielded in more concrete form.

Both the New York Stock Exchange and the New York Curb have refused to list new issues of non-voting common stock; for practical purposes, this would seem to have eliminated the use of this device on any large scale in the immediate future.”[17]Berle and Means note the development of Voting trusts, which initially met bitter opposition, being declared illegal by courts.

The answer to this question will depend on the degree to which the self-interest of those in control may run parallel to the interests of ownership and, insofar as they differ, on the checks on the use of power which may be established by political, economic, or social conditions...

Since only the entity was liable for debts, which did not attach to the various individuals, it followed that a stockholder was not normally liable for any of the debts of the enterprise; and he could thus embark a particular amount of capital in the corporate affairs without becoming responsible beyond this amount, for the corporate debts.”[20] In the United States, particularly at the time Berle and Means were writing[21] they noted two things which particularly compromised shareholder's power: vote by proxy and restrictions on removing directors.

[22] So far as for what objectives the company pursues they say, “The present corporation’s objects and the nature of the business in which (so far as the charter goes) it can engage are commonly limited only by the imagination of its organizing attorneys and their ability to embrace the world within the limits of the English language.”[23] "The conclusion that can be drawn (from this chapter) is that the share of stock, while it represents a participation in corporate assets, does so subject to so many qualifications that the distinctness of the property right has been blurred to the point of invisibility.

For protection the stockholder has only a set of expectations that the men who compose the management and control will deal fairly with his interest.

He must rely for the most part not on legal rights but on economic significances – on an accumulation of conditions which will make it desirable or advantageous for the purposes of the administration of the corporation to recognize a participation more or less meeting his expectation."

When none of the profits are to be received by them, why should they exert themselves beyond the amount necessary to maintain a reasonably satisfied group of stockholders.”[25] Berle and Means go right back here to Adam Smith's oft cited disdain for joint stock companies, the idea that "negligence and profusion" would always prevail.