Apparently the answer is yes:
Lemann focuses on a lesser-known economist named Michael Jensen, whose 1976 article “Theory of the Firm,” he writes, “prepared the ground for blowing up that [New Deal] social order.”
Jensen and his colleagues embodied that particular brand of jaw-droppingly stupid that only intelligent people can achieve. Only a few decades removed from a crisis of unregulated capitalism that had sparked the worst war in history and nearly destroyed the United States, they argued that all the careful New Deal regulations that had prevented financial crises for decades and underpinned the greatest economic boom in U.S. history should be burned to the ground. They were outraged by the lack of control shareholders had over the firms they supposedly owned, and argued for greater market discipline to remove this “principal-agent problem”—econ-speak for businesses spending too much on irrelevant luxuries like worker pay and investment instead of dividends and share buybacks. When that argument unleashed hell, they doubled down: “To Jensen the answer was clear: make the market for corporate control even more active, powerful, and all-encompassing,” Lemann writes.
Here is Jensen’s paper. And it doesn’t say anything about the principal agent problem desiring to limit “luxury items like worker pay”.
We focus in this paper on the behavioral implications of the property rights specified in the contracts between the owners and managers of the firm.
It’s about the battle between management and shareholder interests you drivelling ignorant. It’s about that guy in Barbarians at the Gate who has 15 country club memberships and a fleet of planes paid for by the company. Untaxed I might add, something dealt with by the 1986 tax act under, you guessed it, Ronnie Reagan.
And if you’re not going to get the most basic things right then your analysis built on top is going to be pretty ridiculous, isn’t it?