“What is the "cost of capital" to a, firm in a world in which funds are used to acquire assets whose yields are uncertain; and in which capital can be obtained by many different media, ranging from pure debt instruments, representing money-fixed claims, to pure equity issues, giving holders only the right to a pro-rata share in the uncertain venture? This question has vexed at least three classes of economists: (1) the corporation finance specialist concerned with the techniques of financing firms so as to ensure their survival and growth; (2) the managerial economist concerned with capital budgeting; and (3) the economic theorist concerned with explaining investment behavior at both the micro and macro levels.”

— Merton Miller

Franco Modigliani and Merton H. Miller. "The cost of capital, corporation finance and the theory of investment." The American economic review (1958): 261-297.

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Merton Miller5

American economist 1923–2000

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“What is the "cost of capital" to a, firm in a world in which funds are used to acquire assets whose yields are uncertain; and in which capital can be obtained by many different media, ranging from pure debt instruments, representing money-fixed claims, to pure equity issues, giving holders only the right to a pro-rata share in the uncertain venture? This question has vexed at least three classes of economists: (1) the corporation finance specialist concerned with the techniques of financing firms so as to ensure their survival and growth; (2) the managerial economist concerned with capital budgeting; and (3) the economic theorist concerned with explaining investment behavior at both the micro and macro levels.”

Franco Modigliani (1918–2003) Italian-American economist

Franco Modigliani and Merton H. Miller. "The cost of capital, corporation finance and the theory of investment." The American economic review (1958): 261-297.

“This paper integrates elements from the theory of agency, the theory of property rights and the theory of finance to develop a theory of the ownership structure of the firm. We define the concept of agency costs, show its relationship to the 'separation and control' issue, investigate the nature of the agency costs generated by the existence of debt and outside equity, demonstrate who bears the costs and why, and investigate the Pareto optimality of their existence. We also provide a new definition of the firm, and show how our analysis of the factors influencing the creation and issuance of debt and equity claims is a special case of the supply side of the completeness of markets problem.”

Michael Jensen (1939) American economist

Source: "Theory of the firm: Managerial behavior, agency costs and ownership structure", 1976, p. 305 Abstract

“Imperialism is capitalism in that stage of development in which the domination of monopolies and finance capital has established itself; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun; in which the partition of all the territories of the globe among the great capitalist powers has been completed.”

Vladimir Lenin (1870–1924) Russian politician, led the October Revolution

Source: Imperialism, The Highest Stage of Capitalism (1917), Chapter Seven

“The finance conception of the modern corporation, which currently dominates, emphasizes control through the use of financial tools which measure performance according to profit rates. Product lines are evaluated on their short-run profitability and important management decisions are based on the potential profitability of each line. Firms are viewed as collections of assets earning differing rates of return, not as producers of given goods. The firm is not seen as being a member of only one industry. Consequently if the prospect of an industry in which it participates declines, the firm disinvests. The problem for management from this perspective is to maximize short-run rates of return by altering product mix, thereby increasing shareholder equity and keeping the stock price high”

Neil Fligstein (1951) American sociologist

Source: The transformation of corporate control, 1993, p. 15

“The enhanced ability to obtain external funding and … capacity to deploy capital internally to the most promising of a wide range of divisional ventures.”

Richard Rumelt (1942) American economist

Source: Strategy, structure, and economic performance. (1974), p. 119

“Throughout the years in which the US was punishing countries that departed from fiscal prudence, it was borrowing on a colossal scale to finance tax cuts and fund its over-stretched military commitments. Now, with federal finances critically dependent on continuing large inflows of foreign capital, it will be the countries that spurned the American model of capitalism that will shape America's economic future.”

John Gray (1948) British philosopher

A shattering moment in America's fall from power (2008)

“No, fascism is not a power standing above class, nor government of the petty bourgeoisie or the lumpen-proletariat over finance capital. Fascism is the power of finance capital itself.”

Georgi Dimitrov (1882–1949) Bulgarian politician

Ch. 1, The Class Character of Fascism https://www.marxists.org/reference/archive/dimitrov/works/1935/08_02.htm#s2. <br class="br">The Fascist Offensive and the Tasks of the Communist International in the Struggle of the Working Class against Fascism

“The discounting presumably is to be done for each period of time at that rate of interest which represents the alternative cost of employing capital in the occupation in question; that is, at the rate which the entrepreneur could obtain in other investments”

Kenneth E. Boulding (1910–1993) British-American economist

Source: 1940s, The theory of the firm in the last ten Years, 1942, p. 793 cited in: Pedro Garcia Duarte (2010) " A Path through the Wilderness: Time Discounting in Growth Models http://public.econ.duke.edu/~staff/wrkshop_papers/2009-2010_Papers/PGDuarte_Path_Through_Wilderness.pdf"

“It is traditional in the theory of the firm to define the production opportunity set available to the firm in terms of its boundary -- the maximum attainable set of output quantities for various input quantities, given the state of technology and knowledge. This boundary is the production function of the firm. One of our purposes here is to point out the dependence of such production functions on the structure of property rights and contracting rights within which the firm exists. We redefine the production function in order to recognize the dependence of output on the structure of property and contracting rights. That expanded framework is then used to discuss a concrete set of problems surrounding the role of labor in the firm ranging from the 'labor-managed firm' system (in which tradable capital value residual claims [common stock] are legally prohibited), and the codetermination and industrial democracy movements (in which management participation by labor is required by law), to cooperatives and professional partnerships (i. e., quasi-labor-managed firms which arise out of the voluntary contracting process), and the capitalist corporation.”

Michael Jensen (1939) American economist

Michael C. Jensen and William H. Meckling. "Rights and production functions: An application to labor-managed firms and codetermination." Journal of business (1979): 469-506.

“Generally speaking, under capitalism, the ownership of capital is separate from the application of capital to production; money capital is separate from industrial or productive capital; the rentier, living entirely on income obtained from money capital, is separated from the entrepreneur and from all those directly concerned in the management of capital.”

Vladimir Lenin (1870–1924) Russian politician, led the October Revolution

Source: Imperialism, The Highest Stage of Capitalism (1917), Chapter Three

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