William H. Meckling
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William H. Meckling | |
|---|---|
| Born | September 20, 1921 McKeesport, PA |
| Died | May 15, 1998 (aged 76) Rancho Santa Fe, CA |
| Spouse | Rebecca Frances Ely |
| Children | 5 |
| Academic career | |
| Institution | University of Rochester |
| School or tradition | Chicago School |
| Alma mater | Westminster College (Pennsylvania) (B.A.), University of Denver (M.B.A.) |
William "Bill" Henry Meckling II (September 20, 1921 – May 15, 1998) was an American finance professor. Along with Michael Jensen, he pioneered the field of corporate finance with the 1976 publication of "Theory of The Firm".[1]
Meckling was the second dean of the University of Rochester's William E. Simon Graduate School of Business Administration, serving from 1964 to 1983. During his tenure as dean, he oversaw the development of the management school and recruited several noteworthy economist including Michael Jensen and Kenneth French.[citation needed]
Early life and education[edit]
Meckling was born in McKeesport, Pennsylvania, a suburb of Pittsburgh, to William Henry Meckling Sr. and Katherine Elizabeth Meckling. The second of six children, he spent time in various cities across Pennsylvania and Indiana before attending Westminster College (Pennsylvania) in 1938.[2] While there, he studied business and was a member of Kappa Phi Lambda. After graduation, Meckling joined the Army Air Corp as a private and concluded the war in 1945 as a sergeant.[citation needed]
Following the war, he married Rebecca Frances Ely. The couple moved to Denver to be with Rebecca's mother where Meckling enrolled at the University of Denver, receiving his MBA in 1947. Meckling took a position teaching and conducting post-graduate research at the university following graduation. In 1949, Meckling enrolled at the University of Chicago studying under Milton Friedman and various members of the Cowles Commission, but did not receive a PhD. Ultimately, choosing to leave his studies and join the RAND Corporation as a senior economist in 1952.[2]
Meckling joined RAND at the same time as Armen Alchian where the two developed an immediate friendship. At RAND, Meckling frequently collaborated with Alchian, Ronald Coase, Burton Klein, and Andrew Marshall (foreign policy strategist). His primary focus was on incentives, economic policy related to military research and development and public policy concerns related to communications satellites.[3]
It was during his time at RAND that Meckling would also join the Mont Pelerin Society.[4] The think tank exposed him to the most influential Neoliberal economics
Career[edit]
University of Rochester[edit]
In 1962, a fellow Mont Perlin Society member and University of Chicago alumni, W. Allen Wallis, became the dean at the University of Rochester. Wallis invited Meckling to become the Dean of the University of Rochester business school in 1964. The two would go on to build a business school in the Chicago mold, hiring 14 faculty with degrees from the Booth School between 1970 and 1995.[4] A contributing factor to this growth was the size of the University endowment at the time: $580 million. Giving the school the country's fourth largest endowment in 1970.[5]
Meckling was responsible for establishing the school's Center for Research in Government Policy and Business (now known as the Bradley Policy Center), which provides a public forum to research and examine the interaction of public policy and business strategy.[citation needed]
He retired from the University in 1983.[6]
Research in corporate structure and incentives[edit]
Theory of the Firm (1976)[edit]
In 1973, Karl Brunner, a European economist on the faculty at Rochester, approached Meckling and Jensen about participating in an economic conference series he organized in Interlaken. Brunner, Meckling and Jensen began to organize a paper around Milton Friedman's recently published The Social Responsibility Of Business editorial in the New York Times.[7]
Jensen and Meckling would spend the next year refining the paper as they found holes in the view of a firm as a profit-maximizing entity. This realization and the justification for their reasoning, led to the paper being well over 100 pages by the time it was completed. The pair presented this paper to their colleagues at Rochester before taking it abroad where it was received poorly. As Jensen recalls in a 2013 interview, "[the faculty] hated it... It was not a mild reaction. They accused us of being wrong."[8]
The key ideas in the paper built upon Meckling's observations while working at RAND. Chief among them were the importance of organizational structure and aligning incentives to desired outcomes.[citation needed]
Outside academia[edit]
Meckling served a six-year term on the National Science Board – the board of directors of the National Science Foundation – and was a member of the Tax Foundation. Meckling was also a member of the board of directors of Superba Cravats and a member of the Council of New York State Economic Advisors under then Governor Nelson Rockefeller. He was also president of the Center for Naval Analyses (CNA), director of its economics division.[6]
In addition to this, he worked as the executive director of President Nixon's "Commission on an All-Volunteer Armed Force",[9] using his connections at the CNA to secure some of the data used in the final report.
Personal life and legacy[edit]
Meckling and his wife, Rebecca Frances Ely, had five children. Following his retirement, he moved to California, where he lived until his death in 1998 as a result of heart disease.[10][11][better source needed]
References[edit]
- ^ Jensen, Michael C.; Meckling, William H. (October 1976). "Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure". Journal of Finance. 3 (4): 305–360. SSRN 94043 – via SSRN.
- ^ a b The Corporate Financiers. Palgrave MacMillan. 2015. ISBN 9781349465057.
- ^ "William Meckling | Published Research". Rand Corporation. May 19, 2023. Retrieved May 19, 2023.
- ^ a b Fourcade, Marion; Khurana, Rakesh (2017-06-01). "The Social Trajectory of a Finance Professor and the Common Sense of Capital" (PDF). History of Political Economy. 49 (2): 347–381. doi:10.1215/00182702-3876505. ISSN 0018-2702. S2CID 157274696.
- ^ Jarrell, Gregg (1993). "University of Rochester's Endowment Fund Review".
- ^ a b Clark, Lindley H. (1983). "Rochester Review" (PDF). Originally published in The Wall Street Journal. pp. 17–18. Retrieved May 19, 2023.
- ^ Financial Management Association International (Dec 29, 2016). "Interview with Michael Jensen (Part One)". YouTube. Retrieved 2023-05-12.
- ^ American Finance Association (August 5, 2013). "Masters of Finance: Michael Jensen". YouTube. Retrieved May 12, 2023.
- ^ THE PRESIDENT'S COMMISSION ON AN ALL-VOLUNTEER ARMED FORCE (PDF). U.S. Library of Congress. January 1970. pp. x.
{{cite book}}: CS1 maint: location missing publisher (link) - ^ "Rochester Review V61 N1--In Memoriam". Retrieved 2023-08-25.
- ^ "William H. Meckling, Dean Emeritus at University of Rochester, Dies". www.newswise.com. Retrieved 2023-09-29.