The first American corporations were developed in the 1790s, almost instantly becoming key institutions in the young nation's economy. Although corporations existed in Europe in the early-19th century – particularly in Great Britain and the Netherlands – no country took to corporate development like the United States. Corporate development was dealt a blow toward the turn of the 20th century with the introduction of antitrust legislation, but it quickly rebounded. The end of World War II created a period of unprecedented American corporate hegemony until the rise of Japanese competition in world markets in the 1980s.
Corporations have played a crucial, if not controversial, role in the economic, political and cultural identity of the United States. Easy access to capital and business development provided by the corporate structure was the driving force behind the American Industrial Revolution in the 1820s. The U.S. became the world's greatest innovator and one of its leading economic powers during the Gilded Age, as the latter half of the 19th century was dubbed.
Corporation structure has changed over their 200-year history. Part of this evolution is attributed to a new understanding of successful corporate governance models over time. Other changes can be attributed to the imposition of government regulations, as well as savvy shareholder demands and foreign competition. The academic impact of corporate theory and the role of responsible governance has also loomed large in corporations' development.
The First Corporations
Small banking corporations existed in the first years after the American Revolution. However, most historians note that the first important industrial corporation was the Boston Manufacturing Co. in 1813. Its business model was imported from Great Britain, where textile corporations helped spark the first Industrial Revolution some three decades earlier.
Corporations could raise capital from diverse sources, providing an important mechanism for savers and producers alike. Voting rights were much less protected in the early years through processes of "graduating" certain shareholders, but corporations still embodied a new type of investment.
The Gilded Age
Mark Twain dubbed the decades after the Civil War the "Gilded Age." It was a period was dominated by political scandal and the "Robber Barons," the growth of railroads and the economization of oil and electricity, and the development of America's first giant – national and even international – corporations.
Some rich corporations soon became rent-seekers, reinforcing Henry Clay's idea of state-assisted industrialization. Historian Charles A. Beard wrote that government gifts tended to go to the largest investments. Ironically, the two biggest names in American corporate history, John Rockefeller and Andrew Carnegie, were noteworthy for fighting against government favors and subsidized competitors.
The Post-World War II Period
Americans' opinions of corporations sunk after the Stock Market Crash of 1929. In the public mind, Big Business, especially the financial sector, seemed to blame for the onset of the Great Depression. Reinforcing this sentiment was the book The Modern Corporation and Private Property, published in 1932, in which authors Adolf Berle and Gardiner Means argued that those who legally have ownership over public companies (that is, the shareholders) have been separated from their control, leaving management and the directors to manipulate the resources of companies to their own advantage without effective scrutiny.
However, the public perception of corporations rebounded after World War II. After 1945, America was the only major industrial power to not be devastated by war. American corporations grew without major challenge for decades. This exalted status was eventually challenged by multinational Japanese and German corporations in the 1980s and 1990s.