March 29, 2007
The Dystopian Potential of Corporate Law
Posted by Gordon Smith

Can corporate law save the world? Kent Greenfield says yes. I say no. We decided to write up our views, and you can find my side of the debate in a paper called "The Dystopian Potential of Corporate Law," which is now available for download from SSRN.

I have a strong preference for simple titles, and I normally don't use ten-dollar words like "Dystopia." In this instance, however, I invoked Edward Bellamy's famous utopian novel, Looking Backward, which was written in 1887. (If you teach corporate law and you haven't read Looking Backward, you should put it on your summer reading list. You can find it online here or here.) Looking Backward presents a horrifying vision:

Early in the last century the evolution was completed by the final consolidation of the entire capital of the nation. The industry and commerce of the country, ceasing to be conducted by a set of irresponsible corporations and syndicates of private persons at their caprice and for their profit, were entrusted to a single syndicate representing the people, to be conducted for the common interest for the common profit. The nation, that is to say, organized as the one great business corporation in which all other corporations were absorbed; it became the one capitalist in the place of all other capitalists, the sole employer, the final monopoly in which all previous and lesser monopolies were swallowed up, a monopoly in the profits and economies of which all citizens shared.

My argument is that Kent's proposals for reforms are motivated by the same impulses that motivated Bellamy, and the results of implementing those proposals ... well, I think you can see why I used the word "dystopian."

Kent and I had live debates on this subject at the University of Chicago and Boston College. You can see a write-up from the latter event here.

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