The purpose of this symposium is to shed light on the genealogy of the idea of a business corporation, an economic institution which has long been regarded with a mixture of awe and apprehension. Each of the four original contributions addresses the history of some of its key features. In the process, each contributor reveals some of the insights that history has to teach us regarding the central concepts that inform contemporary debates about the nature of the corporation, the contours of the corporation's purpose, the sources of corporate power, the functions of corporate law, the duties of directors, the status of shareholders, and the legitimacy of corporate rights.

The notion that business corporations should be managed for the exclusive benefit of shareholders has been widely challenged. In particular, critics have argued that directors are authorised to serve the interests of the corporation: a legal entity that is completely separate from its shareholders. However, the premise that shareholders have sole legitimate claim to ‘membership’ has rarely been questioned. This article explores medieval thought on ownership, authority and participation in guilds, churches, towns and universities, and shows that membership can be understood as participation in, and shared responsibility for, a group's distinct collaborative activity over time. Our theory suggests that ‘membership’ in the modern corporation extends to non-shareholding stakeholders, but with the implication that ownership and authority are vested in the members as a body and not in a separate entity.

The rise of large business corporations in the late 19th century compelled many American observers to admit that the nature of the corporation had yet to be understood. Published in this context, Ernst Freund's little-known The Legal Nature of Corporations (1897) was an original attempt to come to terms with a new legal and economic reality. But it can also be described, to paraphrase Oliver Wendell Holmes, as the earliest example of the rational study of corporate law. The paper shows that Freund had the intuitions of an institutional economist, and engaged in what today would be called comparative institutional analysis. Remarkably, his argument that the corporate form secures property against insider defection and against outsiders anticipated recent work on entity shielding and capital lock-in, and can be read as an early contribution to what today would be called the theory of the firm.

That stockholders “own” the corporation and are its “members,” are assumptions deeply embedded in Anglo-American treatments of the business corporation. They are also principal supports of the policy of “shareholder primacy” and, in the United States, of the corporate claim to constitutional rights. This article critiques these assumptions, while also explaining why they took hold. Among several reasons for this, the primary explanation is to be found in the peculiar parentage of England's first major business corporation, the English East India Company (EIC). The EIC did not begin its life as a true business corporation, but as a cross between a guild (a form of member corporation) and a joint stock company (a form of partnership). In the transition to a unified business corporation, its stockholders inherited the monikers of “member” and “owner” from their guild and partner forebears. This mis-description set the legal mold for all subsequent Anglo-American treatments of stockholders.

I investigate the historical development of limited liability – widely considered a cornerstone of the business corporation – and challenge the commonplace linear narratives about how limited liability evolved. I dismiss the claim that limited liability was invented with the very first joint-stock business corporations around 1600. I also reject the assertion that it became dominant with the limited liability acts of the mid-19th century. My argument is that it was only around 1800 that limited liability became a separate corporate attribute, distinct from legal personality, and that limited liability in the modern sense became a uniform attribute of all corporations only in the 20th century. Since corporations, stock markets and the corporate economy enjoyed a long and prosperous history well before limited liability in its modern sense became established and dominant, the economic theory of limited liability needs to be revisited. The paper opens a new set of conceptual, empirical and theoretical research questions, and points to new possibilities in terms of viable future liability regimes.

How can gift and gift-giving studies be relevant to the study of institutions and vice versa? This is the question we broadly address in the introduction to this symposium while drawing on the contributing articles and sketching out a possible future research in a perspective of integration between these two fields of study. Is the gift an institution? What types of methodological approaches would be most suitable in view of such integration? We define the gift as transfers underpinned by institutions, including customs and norms. We contend that the institutional thought can employ empirical and qualitative research methods used by anthropology and that there are important and fruitful lines of tension between gift-giving and institutions – from the relationship between freedom and obligation to the role of third sector between state and market – worthy of further research in the future.

Economics has tended to neglect giving, and thus both its important contemporary economic role and its potential contribution to alternative, non-market systems. To remedy this, it will need to draw on the broad debates on the nature of the gift that have developed in and across the other social sciences. This paper addresses several of these by asking how we should define the terms gift and giving. It rejects definitional associations of giving with obligation, reciprocity and the development of social relationships. Such definitions exclude many phenomena commonly understood as giving and underpin misguided attempts to analyse gifts in contemporary late-modern societies in terms derived from anthropological discussions of very different societies. Instead, the paper develops a definition of the gift based on contemporary giving institutions. A more open, contemporary definition of the gift helps to sensitise us to the continuing importance of gift institutions in social and economic life.

The article proposes a reading of Marcel Mauss's insights into gift exchange in primitive societies through the lens of the institutional economics approach. It thus tries to demonstrate that the gift as seen by Mauss can be interpreted as an institution arising from the self-transcendence of social relationships that gifts themselves are expressly designed to create and according to which individuals orient their behavior. On this basis, we provide elements to discuss the benefits that might derive from the adoption of the institutionalist approach in economics.

How do gifts relate to formal and informal institutions? Giving gifts, especially in the form of anti-poverty aid, opens the givers to a serious social dilemma: the Samaritan's dilemma. We explain how the Church of Jesus Christ of Latter-day Saints uses a mixture of formal and informal governance to provide sustainable social welfare programs that avoid this dilemma. These institutions not only govern aid arrangements, but also provide governance across the entire Church community, encouraging religious adherence and broad-based participation.

Credit unions currently serve over 110 million members in the United States. This is surprising, given the challenges associated with forming cooperatives. This paper explains how grants were used to overcome these challenges and create the modern credit union sector. Edward Filene, a wealthy 20th-century department store owner, provided philanthropic funding and technical expertise to early credit unions, resulting directly in the creation of 26,000 American credit unions over a 45-year period. Filene's leadership helped overcome the various social dilemmas associated with creating cooperatives, reforming institutions, and establishing an institutional framework that enables and supports cooperatives.

In Western societies, in-kind gifts are generally more common than money gifts. However, exchange of in-kind gifts potentially involves inefficiency. Several models have been suggested to explain the in-kind gift-giving practice as a rational behaviour under certain assumptions about givers’ preferences and information and/or technological constraints. Unlike many Western societies, China has a long tradition of money gift-giving. So-called red packets are commonly exchanged. We argue that models developed to rationalise Western norms of gift-giving cannot fully account for Chinese gift-giving practices, and some Chinese practices even contradict existing theories. We collect Chinese household data through two surveys to establish stylised facts about gift-giving. We find that money gifts are commonly appropriate, depending on the occasion and relationship between givers and receivers. Moreover, for every occasion and relationship, money is more appropriate than gift vouchers. Finally, unlike studies focusing on Western gift-giving, our study finds no evidence that givers need to compensate receivers with higher value when giving money gifts rather than in-kind gifts. Our results are consistent with the view that the acceptability of money vis-à-vis in-kind gifts is governed primarily by social convention rather than information and technological constraints or the specific preferences of givers.