George Washington University Law School Professor Larry Mitchell’s new book, The Speculation Economy, is a worthwhile read, and anyone with an interest in corporate law, securities regulation, stock market evolution, the rise of big business, legal history, antitrust, and other related topics should consider putting the book on his or her holiday wish-list.Â
More specifically, The Speculation Economy is a valuable book for anyone wanting to understand how the legal, regulatory, financial, and legislative climate of big business evolved through the late 1800s into the early 1900s, laying the foundation for today’s modern publicly-held corporations and giving rise to what Mitchell calls “American corporate capitalism.â€Â Though the time period covered in the book is narrow, the developments during this period are far-reaching and important. To that end, Mitchell fearlessly deconstructs the antitrust, corporate law, securities law, and the related federalism and state competition events over these three decades, describing, blow-by-blow, the move from a large business entity world dominated by major individual players focused on building an industrial enterprise to a business environment where business entities – trusts turned conglomerates turned corporations – were no longer a means to an end but rather an end in and of themselves.Â
And Mitchell’s attention to detail is actually where I found the true value in the book. Based on the book’s subtitle – “How Finance Triumphed Over Industry†– and based on various reviewers’ comments on the jacket and otherwise, I thought the book would be valuable because it explains why finance came to dominate industry. The reality, however, is that the book basically dispenses with that issue in its first two chapters. The rest of the book is spent on an a journey through the regulatory, legislative, state, political, and federal struggling and machinating in response to this capital market paradigm shift. It is this rich discussion and description that I found most valuable and wonderfully edifying. Mitchell takes us from New Jersey’s appearance as the first winner of the real race to the bottom to the Panic of 1907 to early attempts to federalize corporate law to the Owen Bill, the Pujo Committee, the Hepburn Act, the Mann-Elkins Act, and the Littlefield Bill to the sunset of Woodrow Wilson’s economic progressivism (covering, on the way, a whole host of other relevant material). The Speculation Economy is a solid historical read highlighting a critical time in corporate and capitalism history.Â
Columbia Professor Harvey Goldschmid’s comment on The Speculation Economy book jacket promises that “[a]nyone interested in the development of our modern financial markets will be richly rewarded by a careful reading.â€Â Harvey was right. The Speculation Economy, while requiring an attentive, slower read due to its factual density, delivered, in return, a wealth of information, coherently explained and colorfully detailed, about a pivotal time in corporate history. The book earned its rightful place on my office bookshelf of corporate and securities law tomes, and, for only 279 pages of text (excluding the endnotes), The Speculation Economy is must-read contribution to the legal history, corporate law, securities regulation, and big business scholarship.
** Look for the Conglomerate’s book review session on The Speculation Economy in a few weeks!   http://www.theconglomerate.org/conglomerate_book_club/index.html
