The emergence of the joint stock company and its associated tendency towards the socialization of the ownership of the means of production (SOMP) has raised the question: who controls these companies? Unlike their predecessors, the small nineteenth-century firms, which were owned and controlled often by one individual or a family, the joint stock companies are ‘owned’ by the public at large. In view of the often wide dispersal of shareholding, the distinct possibility emerges that not all shareholders will exercise corporate control. In this sense the very existence of the joint stock company implies a potential separation of ownership from the unity of ownership and control.

The above does not necessarily imply a separation of ownership from control. Control can be in the hands of the shareholders as a whole, a subset of the shareholders or no shareholders at all, in which case control may be exercised by a group of non-shareholders, e.g. professional managers and/or technical experts. It is only in this last case that ownership and control are divorced. In the first case ownership and control are still a unity, while in the second only a subset of owners is separated from control, i.e. a partial separation of ownership from control exists.

Consistent with their focus on ‘consumer sovereignty’, orthodox neoclassical economists largely ignored the possibility of the separation of ownership from the unity of ownership and control. According to their often implicit view, all shareholders are in control of firms.