Corporate Property: The Public Role of the Corporation
Walmart CEO Doug McMillon commands 2.3 million employees, a population similar to that of countries such as Qatar or Slovenia. The total income of the firm (13.64 billion USD) is also comparable to the GDP (PPP adjusted) of small countries like Iceland or Sierra Leone. It seems hard to deny that McMillon is an extremely powerful person. Yet, corporations like Walmart exert their power solely for the profit of their shareholders (and managers). They exist in a private sphere without any accountability to the people whose lives they affect beyond that which applies to ordinary citizens under private law.
My part of this research project involves asking what sort of power corporations exercise, what ends they should exercise it for, and how they could be made more accountable to those ends. At this stage of my research, I am pursuing three particular lines of inquiry.
First, I am interested in moral questions about what business managers should be aiming for, and what constraints apply in pursuit of their goals. On this topic, I have been inspired by Joseph Heath’s ““market failures approach to business ethics”. Businesses exist to promote the public good, but they do so indirectly by pursuing their own profits in competition with other firms. However, this competition only promotes the public good if businesses refrain from certain competitive strategies (e.g. pollution, deception, taking advantage of customers’ weak willpower). This framework still needs to be developed in various ways, notably in its relation to democratic theory, and on what it recommends in markets with multiple market failures which might operate in different directions.
Second, I am looking at the justification of corporate law. Corporations enjoy special legal statuses which do not apply to individuals. Most famously, corporations have limited liability: if the corporation goes bankrupt, its creditors cannot recover any money from shareholders. I am interested in whether or not special legal statuses like this constitute a “free lunch” for the corporation: benefits conferred on corporations by law at the expense of everyone else. Even if this is not the case, the rationale of corporate law as it currently exists seems to be one of promoting investment and economic growth above all else. What might corporate law look like if we incorporated additional goals, such as economic stability and sustainability?
Third, I am investigating alternative ways of keeping corporations accountable to their proper goals and constraints. In particular, I am interested in proposals to give other stakeholders a greater say in corporate decisions. This might lead to an alternative justification for workplace democracy as a form of countervailing power which exists not primarily for the benefit of workers themselves.