Papers presented by Charlotte Robertson since 2019
2024 Providence, Rhode Island
"Free Incorporation and its Discontents: State, Society, and the Corporation in France, 1852-1886"
Charlotte Robertson, Harvard Business School
Abstract:
Until 1867, sociétés anonymes (SAs), i.e. limited-liability joint-stock corporations, required to government authorization in France. This centralized authorization procedure considered public interest and the composition of the securities markets when evaluating prospective corporations. Laws passed in 1863 and 1867 removed this legal hurdle and the aura of privilege surrounding SAs, which became increasingly incompatible with the economic acceleration and gradual liberalization promoted by Napoleon III (1852-1870). After 1867, the number of SAs (including joint-stock banks) skyrocketed, fueling market instability that ultimately erupted in a major financial crisis in 1882—considered the first financial “crash” in France. Bank failures spurred renewed debate about the virtues and vices of free incorporation, understood as a form of capital market deregulation. The “triumph of free incorporation” was highly contested. Both before the passage of the law and after the financial crisis, the French government solicited opinions from legislators, local governments, and chambers of commerce, while public debates animated the print media. Positions on free incorporation were divided across social classes, political alliances, regional interests, and industry sectors. Certain regions championed the preservation of state discretion over incorporation as a public safeguard, rejecting the state’s renunciation of this responsibility as inviting moral hazard or financial instability. Others advocated for the complete removal of state discretion over incorporation, construed as an exercise of arbitrary power. This paper examines how these positions evolved over the course of the 1860-80s and considers factors influencing their distribution. One striking feature of the geography of discontent is that regions that were opposed to free incorporation in the 1850-60s witnessed surging popular antisemitism in the late nineteenth century. The French experience offers historical perspective on the relationship between market regulation and economic populism.
2023 Detroit, MI, United States
"From Repression to Regulation: French Police as Securities Market Authorities, 1850-1885"
Charlotte Robertson, Harvard Business School
Abstract:
This paper examines how the French police actively managed the capital and securities markets during the “first financialization” of the second half of the nineteenth century. In so doing, it offers an account of de facto financial market regulation before the institution of dedicated regulatory bodies in the twentieth century. In the 1850-60s, the French Emperor, Napoleon III, focused his efforts on economic development, and enlisted the public securities markets, rather than taxation, to achieve his program. In this context, the securities markets became an object of active surveillance, administration, and intervention. France’s powerful police apparatus was deployed into the financial sphere and Prefects of Police were recruited for their financial literacy, which they applied to the supervision of corporate chartering, the regulation of market practices, the protection of investors, the monitoring of the illegal curb market, and the surveillance of electric telegraph dispatches. The police also served a crucial reconnaissance and knowledge-generating role for the government, “reading” the markets as a continuous plebiscite on the regime and shaping its financial policy accordingly. However, as the French state’s interventions in the financial markets backfired, it ultimately gravitated away from this discretionary approach toward the embrace of free incorporation in 1867, which set into motion the adoption of similar legislation across the Continent. Through this act, the French state extricated itself from the active role it had formerly assumed in guiding capital formation, by removing the long-standing requirement of government authorization to establish a limited liability corporation. While this rules-based order was a boon to entrepreneurs, the subsequent proliferation of corporations ignited new problems for police oversight and market stability, seeing that many of these newly formed corporations were banks. Like interventionism, standardization also produced unintended market instability.