Damages Of Deregulation of Corporations

Here's a clip from wiki about deregulation of corporations and the historical timeframe within which this occured:

In the United States, government chartering began to fall out of vogue in the mid-1800s. Corporate law at the time was focused on protection of the public interest, and not on the interests of corporate shareholders. Corporate charters were closely regulated by the states. Forming a corporation usually required an act of legislature. Investors generally had to be given an equal say in corporate governance, and corporations were required to comply with the purposes expressed in their charters. Many private firms in the 19th century avoided the corporate model for these reasons (Andrew Carnegie formed his steel operation as a limited partnership, and John D. Rockefeller set up Standard Oil as a trust). Eventually, state governments began to realize the greater corporate registration revenues available by providing more permissive corporate laws. New Jersey was the first state to adopt an "enabling" corporate law, with the goal of attracting more business to the state.[10] Delaware followed, and soon became known as the most corporation-friendly state in the country after New Jersey raised taxes on the corporations, driving them out. New Jersey reduced these taxes after this mistake was realized, but by then it was too late; even today, most major public corporations are set up under Delaware law.

By the beginning of the nineteenth century, government policy on both sides of the Atlantic began to change, reflecting the growing popularity of the proposition that corporations were riding the economic wave of the future. In 1819, the U.S. Supreme Court granted corporations a plethora of rights they had not previously recognized or enjoyed.[11] Corporate charters were deemed "inviolable," and not subject to arbitrary amendment or abolition by state governments.[12] The Corporation as a whole was labeled an "artificial person," possessing both individuality and immortality.[13]

At around the same time as the above events were occurring in the United States, British legislation was similarly freeing the corporation from the shackles of historical restrictions. In 1844 British Parliament passed the Joint Stock Companies Act, which allowed companies to incorporate without a royal charter or an additional act of Parliament.[14] Ten years later, England enshrined into law the preeminent hallmark of modern corporate law - the concept of limited liability. Acting in response to increasing pressure from newly emerging capital interests, Parliament passed the Limited Liability Act of 1855, which established the principle that any corporation could enjoy limited legal liability on both contract and tort claims simply by registering as a "limited" company with the appropriate government agency.[15]

This revolutionary switch from unlimited to limited liability prompted a writer for the English periodical Economist to write in 1855 that "never, perhaps, was a change so vehemently and generally demanded, of which the importance was so much overrated."[16] The glaring inaccuracy of the second part of this judgment was recognized by the same magazine more than seventy-five years later, when it claimed that, "[t]he economic historian of the future . . . may be inclined to assign to the nameless inventor of the principle of limited liability, as applied to trading corporations, a place of honour with Watt and Stephenson, and other pioneers of the Industrial Revolution."[17]


[edit] Modern corporations
By the end of the nineteenth century the forces of limited liability, state and national deregulation, and vastly increasing capital markets had come together to give birth to the corporation in its modern-day form.[18] The well-known Santa Clara County v. Southern Pacific Railroad decision began to influence policymaking. The decline of restrictions on mergers and acquisitions encouraged a wave of corporate consolidation: from 1898 to 1904, 1,800 U.S. corporations were consolidated into 157.[19] The modern corporate era had begun.

The 20th century saw a proliferation of enabling law across the world, which some argue helped to drive economic booms in many countries before and after World War I. Starting in the 1980s, many countries with large state-owned corporations moved toward privatization, the selling of publicly owned services and enterprises to corporations. Deregulation -- reducing the public-interest regulation of corporate activity -- often accompanied privatization as part of an ideologically laissez-faire policy. Another major postwar shift was toward the development of conglomerates, in which large corporations purchased smaller corporations to expand their industrial base. Japanese firms developed a horizontal conglomeration model, the keiretsu, which was later duplicated in other countries as well.