What Makes America Great? Modern Corporate Finance
His book seeks to define the intellectual basis of modern corporate finance and tell a story of how certain ideas made the US the most successful nation at generating wealth, if not economic growth.
Donald Chew has an answer. The founding editor and current editor-in-chief of the Journal of Applied Corporate Finance, Chew has written a new book,
The Making of Modern Corporate Finance (Columbia University Press)
Ethics to make shareholders true owners, structures to eliminate agency costs, tactics to guide value-creating investments.
In many ways, The Making of Modern Corporate Finance is a cousin to Francis Fukuyama’s The End of History and the Last Man, a 1992 history of ideas that rang the bell after the fall of the Soviet Union for the “universalization of Western liberal democracy.”
For the past 30 years, Fukuyama’s book has often been brought up as a warning against hubris. History did not end.
China’s state-directed capitalism feels less threatening and European stakeholder capitalism feels more fragile than at any time in the past two decades.
Have the ideas that led to rigorous American-style ownership capitalism also triumphed for good? Today, at least, it doesn’t feel foolish to say so.
Ownership capitalism is not Chew’s phrase. He prefers “modern corporate finance,”
The central economic question is how long can a wealth-creating market, unleashed by modern corporate finance, grow five times faster than the economy?
Gary Sernovitz Bloomberg 14 February 2025
https://www.bloomberg.com/news/articles/2025-02-14/what-makes-america-great-modern-corporate-finance
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