We found ourselves in a meditative mood Friday afternoon in New Orleans, a state of mind no doubt fueled by a lunch of lemonfish washed down with a nice Chardonnay at Restaurant August. One of the things we meditated on was Marty Lipton's comment at the Tulane Corporate Law Institute Friday morning that U.S. shareholder democracy will have a hard time competing with the state corporatism of Russia, China and other emerging economies.
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Lipton made the remark at the conclusion of a panel reviewing the last 20 years of M&A. He could have said much the same thing about Japan in the late 1980s, when Chalmers Johnson could write a widely praised book entitled "Miti and the Japanese Miracle," referring to the close nexus between business and government in that country. The sharp contrast between the stable Japanese corporation, oriented toward the long term, and its U.S. counterpart, hassled by Carl Icahn, Michael Milken and their ilk to the great detriment of the U.S. economy, was conventional wisdom at the time, though it didn't survive long into the 1990s as Japan's stock market and economy cratered, never fully to recover.
And (we swear we had only one glass of wine) we also pondered the similarities between Louisiana and Russia, both oil-rich states in which businesses have often found themselves at the mercy of rapacious politicians, some of whom masquerade as businessmen. That hasn't turned out too well for either polity.
Perhaps a good lunch caused an overly Panglossian self-satisfaction to pass over us, but the history that Lipton and Joe Perella spent the morning reviewing -- and that both men had a hand in shaping -- suggests that the increasingly shareholder-driven corporate governance of American companies at the very least hasn't hurt the U.S. economy and may in fact have been a competitive advantage. And now, perhaps, another glass of Chardonnay. - David Marcus
See Dealscape's additional coverage of the Tulane Corporate Law Institute in New Orleans
