62 Colum. L. Rev. 433 (1962)
Modern Functions of the Corporate System; Berle, Adolf A.

handle is hein.journals/clr62 and id is 473 raw text is: MODERN FUNCTIONS OF THE CORPORATE SYSTEMt
Pioneer work usually does (and invariably should) come in for critical
rake-over a generation later. By that time, the author is usually dead. I am
not, and find the experience piquafit.
Appreciating the subtle flattery implied in the title-and in being con-
sidered folklore in the text-something more than courteous passivity is
indicated. It is nice to be credited with having asked the right questions in
1932. But I can not escape the feeling that it is also incumbent on lawyers-
and scholars to come up occasionally with the right, or at least with viable,
Folklore is commonly considered legend rather than description. Later
generations, criticizing, did not live through the period that produced the
original work. Professor Manne and his contemporaries did not live through
World War I and the decade of the twenties, and the crash of 1929, culminat-
ing in the breakdown of the American economic system in 1933. They have
not experienced a corporate and financial world without the safeguards of
the Securities and Exchange Commission, without systemization and en-
forced publicity of corporate accounting, without (more or less) consistent
application of antitrust laws, without discouragement of financial pyramiding,
and which tolerated conflicts of interest to a degree unthinkable now. They
have not experienced a banking, credit, and currency system unguided by the
reorganized Federal Reserve Board. Least of all have they lived in a political-
economic world in which great corporations were not consistently held by
active public opinion to public responsibility. Naturally, books reflecting the
conditions then prevailing seem folklore to them, as the tales of Marco
Polo and the travels of Herodotus seemed myths to their readers. Historical
research later usually verifies-and I think would verify in respect to my
own work-that what is later taken as folklore was a more or less accurate
account of existing historical conditions.
Prediction is another story. Some, at any rate, of the extrapolations
made in 1931 by Dr. Means and myself have not come true. It would, I
think, be fair to acknowledge that we had something to do with this. Some
of us went into that phase of active government known historically as the
New Deal. We did our level best to prevent those predictions from being
realized. The grandfather clause embodying the death sentence for unduly
t This article is a reply to Manne, The Higher Criticism of the Modern Corpora-
tion, appearing in this issue, 62 CoLum. L. REv. 399 (1962).
* Professor of Law, Columbia University.

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