Chapters 3, 4, and 5 examine empirically why markets for corporate control expanded even though incumbents resisted exposure to competition. The British case, presented in Chapter 3, illustrates the doubly self-reinforcing feedback effects of market-enabling takeover rules. Even in Britain, rules conducive to takeover bids did not emerge until after World War II. The first regulatory blow to the entrenched position of corporate insiders was dealt not by shareholder-oriented market liberals, but by stakeholder-oriented parties to their left. Marketization was an unintended side-effect eagerly snatched up by incumbents’ symbionts, namely merchant banks, who abandoned their former allies to become profiteers. Marketization gathered speed not only because the pro-market clienteles grew, but also because opposition waned as competition intensified. I attribute this to feedback effects of marketization on the power resources, attitudes, and behavior of politically relevant groups, including institutional investors, bankers, managers, and trade unions.
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