Embracing Capital: On normative and legal aspects of the capitalization of business ownership

Outline

This project examines the structural transformation of corporate ownership in Germany from the foundation of the Federal Republic (1949) to the present (2024). The central research assumption is that corporate ownership is increasingly organised through limited liability firms, a process referred to as ‘capitalisation’. Hence, the study focuses on corporations, which were introduced in Germany in the 19th century and are regarded in classical economic sociology as a key capitalist structural innovation. These entities not only limit entrepreneurial risk but, as legal persons, can also own property and issue shares, enabling the sale of firms on financial markets. The subproject extends economic sociology debates by arguing that the institutionalisation of the corporation was a major milestone but did not mark the endpoint of the structural transformation of corporate ownership, which only fully materialised in Germany after the break with the Nazi regime.

The project identifies three interconnected social trends that have contributed to this transformation but have not yet been analysed together: first, the internationalisation of businesses, which necessitates risk management strategies; second, entrepreneurialism, a growth- and sales-oriented culture of entrepreneurship that demands easy access to capital; and third the coding of capital, that is the use of corporate law to safeguard and increase private and corporate assets. These trends illustrate how corporations gained legitimacy and dominance, leading to fundamental changes in institutionalised expectations of ownership.

To better understand this structural change, the project examines three key structural levels through the following research questions: what shifts in corporate law have occurred regarding limited liability firms; who or what can be a corporate owner, and to what extent is corporate ownership normatively contested; and how and to what extent has the corporate form proliferated. The project employs an economic-sociological approach to ownership and justification. Empirically, it is divided into three studies: a genealogical study of corporate law, tracing legal changes in corporate forms over time; an analysis of political and public discourses on corporate ownership, exploring shifting norms around legitimate corporate owners, their rights, duties, and responsibilities; and an analysis of sales tax statistics and shareholder structures, revealing the actual proliferation of corporations and changes in shareholder composition.

By continuously comparing these three levels, the project provides a comprehensive understanding of capitalisation and its interconnections. It makes a significant contribution to understanding the legal, normative, and empirical dimensions of the shift from partnership-based to corporation-based business ownership. Ultimately, the study explains how the expansion of corporate ownership evolved over time and how private business ownership has been radicalised, transforming into a financial and asset management instrument.

Project Staff

Prof. Dr. Isabell Stamm

Principal Investigator

Berlin