# Gardiner C. Means

Gardiner Coit Means (June 8, 1896 – Feb. 15, 1988) was an American economist, government advisor and researcher, who worked at the Committee for Economic Development. At Harvard University he had met lawyer-diplomat Adolf Berle, and together they wrote the seminal work of corporate governance, The Modern Corporation and Private Property (1932).

## Quotes

* Both... the separation of labor from control and of the owner from control... have made possible the continuing development of the size of the individual enterprise, have reduced the area within which economic processes is organized through the interplay of prices and have increased the area within which production is organized... and the coordination of production on a planned basis.
** Gardiner C. Means (1933; 6) as cited in: Samuels and Medema (1990; 69)
* In traditional economic writings dealing with the economy as a whole, it is usually assumed that prices are highly flexible and that economic adjustment is brought about through price changes. We are going to examine inflexible prices.
** Gardiner C. Means, "Price inflexibility and the requirements of a stabilizing monetary policy." Journal of the American Statistical Association 30.190 (1935): 401-413.
* The increasing discussion of the importance of inflexible prices in the. American economy has been somewhat stimulated by previous articles by the present writer. In one of these, material was presented on inflexible administered prices and their importance for monetary policy.
** Gardiner C. Means, "Notes on inflexible prices." The American Economic Review (1936): 23-35.

### The Modern Corporation and Private Property. 1932/1967

    See Adolf A. Berle#The Modern Corporation and Private Property. 1932/1967

### "The Distribution of Control and Responsibility in a Modern Economy", 1935

Gardiner C. Means. "The Distribution of Control and Responsibility in a Modern Economy." Political Science Quarterly. March 1935, pp. 59-69
* Economic and political developments have forced upon us a great problem of analysis in the field of politico-economic organization. The center of this problem lies in the midground between the science of politics and the science of economics and its scope is coterminous with the scope of both. It demands the best minds of both science to forge a new pattern of thinking which will weld the elements of politics and economics into an integrated whole having validity in the present day.
** p. 59; lead paragraph
* It is in the development of further administrative coordination that we must come to political scientists for aid. We ask that you apply to the field of economic administration the technique of analysis and principles of organization which you have developed in the study of administrative organization in the form of the state.
** p. 64
* Gradually but steadily, great segments of economic activity have been shifted from the market place to administration.
** p. 67; as cited in: Dimock (1937; 29)

### The Corporate Revolution in America, 1957

Gardiner C. Means The Corporate Revolution in America, 1957; 1962
* Earlier writers have recognized that economic activity is only in part trading and that the element of administration enters in, but they have tended to minimize this administrative aspect. The modern corporation has not only increased this aspect by bringing a greater part of economic activity within the administrative limits of single units, has altered the character of the market by making price not an outgrowth of trading but of administration.
** p. 18
* The Modern Corporation has undermined the preconceptions of classic economic theory as effectively as the quantum undermined classic physics at the beginning of the 20th century.
** p. 287
* We now have single corporate enterprises employing hundreds of thousands of workers, having hundreds of thousands of stockholders, using billions of dollars' worth of the instruments of production, serving millions of customers, and controlled by a single management group. These are great collectives of enterprise, and a system composed of them might well be called "collective capitalism."
** p. 288

## Quotes about Gardiner C. Means

* In a modern large corporation, ownership and power are by no means necessary combined. This matter, as it affects the United States, is authoritatively dealt with in a very important book, The Modern Corporation and Private Property by Berle and Means (1933). They contend that, although ownership is centrifugal, economic power is centripetal; by a very careful and exhaustive investigation they arrive at the conclusion that two thousand individuals control half the industry of the United States (p. 33). They regard the modern executive as analogous to the kings and Popes of former times; in their opinion, more is to be learned as to his motives by studying such men as Alexander the Great than by considering him as the successor of the tradesmen who appear in the pages of Adam Smith. The concentration of power in these vast economic organizations is analogous - so they argue - to that in the Medieval Church or in the National State, and is such as to enable corporations to compete with States on equal terms.
** Russell, Bertrand (1938) Power: A New Social Analysis London: George Allen & Unwin Ltd., pp. 131-132
* In recent years economists and historians have increasingly turned their attention to modern economic institutions. Economists such as Edward S. Mason, A. D. H. Kaplan, John Kenneth Galbraith, Oliver E. Williamson, William J. Baumol, Robin L. Marris, Edith T. Penrose, Robert T. Averitt, and R. Joseph Monsen, following the pioneering work of Adolph A. Berle, Jr., and Gardiner C. Means, have studied the operations and actions of modern business enterprise. They have not attempted, however, to examine its historical development, nor has their work yet had a major impact on economic theory. The firm remains essentially a unit of production, and the theory of the firm a theory of production.
** Alfred D. Chandler, Jr. The Visible Hand (1977) p. 5
* Gardiner C. Means [was] an economist whose theory regarding pricing practices in some industries was influential in setting national policy in the New Deal and later when inflation struck after World War II... In the mid-1930's Dr. Means, then a comparatively obscure adviser to Agriculture Secretary Henry A. Wallace, developed a theory to explain why prices did not always rise and fall in response to the classical law of supply and demand. The theory developed a popular name, administered prices.
    Dr. Means observed that in some industries, such as steel, oil and automobiles, prices were more inflexible than in other product lines and he reasoned that large producers in those industries were able to administer prices without regard for the level of demand. Instead of reducing prices when demand fell, they cut production to lower their costs, thereby maintaining profits.
   * Glenn Fowler. "Gardiner C. Means, 91, Is Dead; Pricing Theory Aided U.S. Policy." in The New York Times, February 18, 1988.
* Gardiner Means has a secure place in the history of 20th century economic thought, as the co-author with A.A. Berle of "The Modern Corporation and Private Property." But according to Samuels and Medema, Means should be remembered for major contributions in both micro- and macroeconomics. The authors discuss Means's ideas of administered pricing and profit maximization within the giant corporation, the possible links between industrial structure and macroeconomic performance, a theory of the firm as it relates to the market, and the micro foundations of macroeconomics. Central to Means's macroeconomics is his theory that administered pricing generates inflation and stagflation. Means, in the authors' view, was a seminal thinker and a post-Keynesian economist, as well as an institutionalist. This book also gives an precis of Means's unusual career in government and the academy.
** Warren J. Samuels, Steven G. Medema. Gardiner C. Means, Institutionalist and Post Keynesian. M.E. Sharpe, 1990 ; Abstract
* Gardiner C. Means [was], a leading institutionalist and post-Keynesian economist. Means studies the modern corporation and its implications for the institution on private property and the economic systems as a whole.
** Gardiner Coit Means, Frederic S. Lee, and Warren J. Samuels. The Heterodox Economics of Gardiner C. Means: A Collection. ME Sharpe, 1992. Book abstract