The Early Years of Michael Cole Jensen

Abstract

The advantage of corporations have only been discovered over the last couple of centuries and described and appreciated over the past couple of generations. While John Burr Williams may have explained how a corporation might be valued based on expected future cash flows, and Ronald Coase taught us the importance of property rights and transactions costs, some new thinking was necessary to more fully explain why corporations have advantages, and some disadvantages, over alternative market-based institutions. The majority of those in any field apply conventional wisdom, or perhaps elaborate on this wisdom at its edges. Great minds often reject conventional wisdom and replace it with new and often revolutionary ideas. It is an interesting academic question how these great minds develop novel intuitions. Perhaps the new thinking for Michael Cole Jensen epitomizes a heritage of pioneers who originally settled a new country and who came from the old to the new, attracted by an economic engine like the world has never seen before.