The most common business enterprise form in Germany today is the Gesellschaft mit beschränkter Haftung (GmbH). The GmbH offers entrepreneurs the partnership’s flexibility combined with limited liability, capital lock-in, and other traits associated with corporations. Earlier enterprise forms such as the partnership and corporation were codified versions of longstanding practice; the GmbH, on the other hand, was the lawgiver’s creation. Authorized in 1892, the GmbH appeared during a period of ferment in German enterprise law and was an early example of the “Private Limited-Liability Company” (PLLC) prevalent in many economies today. This paper traces the debates and the legislative process that led to the GmbH’s introduction. The new form reflected challenges created by the corporation reform of 1884, problems in German colonial companies, and the view that British company law had put German firms at a competitive disadvantage. Many new enterprises adopted the GmbH, but significant sections of the financial and legal community harbored strong reservations about this legal innovation.
The first modern German cooperatives began operations in the 1840s and faced, among other challenges, unfriendly legal rules. In Prussia, cooperatives experienced official harassment as allies of the then-oppositional Liberals. More importantly, cooperatives lacked the right to act as bodies, forcing them to engage in expensive legal workarounds for simple tasks such as contracting debts. The first German cooperatives law, Prussia’s 1867 Act, made clear the cooperatives had a right to exist and gave them the right to act as entities. Further development in the cooperative movement exposed flaws in the original act. The 1889 (Reich) Cooperatives Act legalized some organizational differences in the newer, rural cooperatives, and introduced compulsory external audits for cooperatives. Most famously, the 1889 Act first allowed cooperatives with limited liability, a step that made German cooperatives more similar to those elsewhere in Europe. The historical literature on cooperatives has neglected two important parts of this story: problems with the way unlimited liability operated under the 1867 Act, and the close connection between cooperative and company law.
This article sets recent expressions of alarm about the monopoly power of technology giants such as Google and Amazon in the long history of Americans' response to big business. I argue that we cannot understand that history unless we realize that Americans have always been concerned about the political and economic dangers of bigness, not just the threat of high prices. The problem policymakers faced after the rise of Standard Oil was how to protect society against those dangers without punishing firms that grew large because they were innovative. The antitrust regime put in place in the early twentieth century managed this balancing act by focusing on large firms' conduct toward competitors and banning practices that were anticompetitive or exclusionary. Maintaining this balance was difficult, however, and it gave way over time—first to a preoccupation with market power during the post–World War II period, and then to a fixation on consumer welfare in the late twentieth century. Refocusing policy on large firms' conduct would do much to address current fears about bigness without penalizing firms whose market power comes from innovation.