Periodic Reporting for period 2 - CORPORATOCRACY (The Business Corporation as a Political Actor)
Okres sprawozdawczy: 2022-03-01 do 2023-08-31
The CORPORATOCRACY project addresses the political status and legitimacy of business corporations. Until recently, a dominant understanding of the position of corporations in society was that they are purely commercial and therefore private actors. In this paradigm, their purpose should lie in maximizing long-term shareholder value. Public or social interests connected to what and how corporations produce goods and services, in this paradigm are protected through public regulation, monitoring and enforcement. This paradigm has been criticized as inadequate for today’s economies, due to a variety of circumstances. As a consequence, the legitimation of corporate power is called into question. Major corporations have responded by developing new policies of social responsibility and taken more explicitly political positions. The objective of the project is to develop a political theory which rethinks corporation’s status in light of this new situation.
Political legitimacy has been the subject of a long line of thinking in political philosophy, under the heading of the ‘social contract.’ Such contract theories describe the rightful relations of public actors vis-à-vis citizens. Updating this, the project aims to study if and how corporations can be integrated into this political framework. This most importantly includes addressing issues of democracy and social justice. As to democracy, the current social contract is based on a strict division of labour between democratically legitimated public authorities and hierarchically, non-democratically organized corporations. The project studies whether this division is tenable, or whether corporations themselves need to be democratically organized. As to justice, the current social contract is based on an understanding of justice which only pertains to the ‘basic structure’ of society. The project develops an analysis of structural injustice, which takes a wider scope so as to include corporations as agents of (in)justice.
This topic is societally important since it opens up new ways of dealing with corporate power and addressing concerns about the way corporations externalize social and environmental costs to society. The project explores various alternative governance routes to hold corporations to account for these social and environmental costs.
Political legitimacy has been the subject of a long line of thinking in political philosophy, under the heading of the ‘social contract.’ Such contract theories describe the rightful relations of public actors vis-à-vis citizens. Updating this, the project aims to study if and how corporations can be integrated into this political framework. This most importantly includes addressing issues of democracy and social justice. As to democracy, the current social contract is based on a strict division of labour between democratically legitimated public authorities and hierarchically, non-democratically organized corporations. The project studies whether this division is tenable, or whether corporations themselves need to be democratically organized. As to justice, the current social contract is based on an understanding of justice which only pertains to the ‘basic structure’ of society. The project develops an analysis of structural injustice, which takes a wider scope so as to include corporations as agents of (in)justice.
This topic is societally important since it opens up new ways of dealing with corporate power and addressing concerns about the way corporations externalize social and environmental costs to society. The project explores various alternative governance routes to hold corporations to account for these social and environmental costs.
General work on the project in this period involved establishing the members of the research group, doing literature reviews for each of the subprojects; establishing a network of associates to the project that are updated on its work; organizing three larger workshops where scholars presented work in progress (March and May 2022, and upcoming June 2023), as well as some smaller events. A project website was established, and – due to Corona – a series of online speaker events held in 2020-2022 (video registrations on the website).
Work on the corporate constitution (first subproject) researched how to analytically interpret the legitimation of corporate power, in relation to particular economic and political values and in relation to juridical theories of the corporation embedding these values. Also it researched the historical emergence and features of various paradigms for understanding corporate purpose and the normative justification of corporate power, with a particular focus on the justifications offered for the multicapital framework as well as theories of fiduciary duties for corporate boards.
Work on corporate democracy (second subproject) investigated the justifications for the existing focus on workers’ in the workplace democracy debate and concluded that there are no principal reasons for this focus. A closer examination of the Berlin expropriation movement and its place and significance for the general corporate reform debate was also conducted.
Work on social justice & corporation (the third subproject) investigated how to theoretically define and legally execute corporate responsibility for structural injustice, such as climate change. It researched existing accounts of corporate responsibility for structural injustice in business ethics based on a dominant framework of Iris Marion Young, criticized it for not being sufficiently sensitive to power dynamics and provided an alternative based on a different interpretation of Young’s work.
Work on transnational corporations (the fourth subproject) involved investigating economic production as a space for realizing specific ideas of freedom and analyzed the multinational firm’s specific effects on the freedom of sovereign political communities.
Work on the economic/political theory of the firm (fifth subproject) problematized the influential state/firm analogy which political theorists have long relied upon to theorize corporate power. It has explored how the sociological literature on worker resistance can be utilized in the political theory of the business corporation, developing this into a criticism of economic theories of the firm.
Work on the corporate constitution (first subproject) researched how to analytically interpret the legitimation of corporate power, in relation to particular economic and political values and in relation to juridical theories of the corporation embedding these values. Also it researched the historical emergence and features of various paradigms for understanding corporate purpose and the normative justification of corporate power, with a particular focus on the justifications offered for the multicapital framework as well as theories of fiduciary duties for corporate boards.
Work on corporate democracy (second subproject) investigated the justifications for the existing focus on workers’ in the workplace democracy debate and concluded that there are no principal reasons for this focus. A closer examination of the Berlin expropriation movement and its place and significance for the general corporate reform debate was also conducted.
Work on social justice & corporation (the third subproject) investigated how to theoretically define and legally execute corporate responsibility for structural injustice, such as climate change. It researched existing accounts of corporate responsibility for structural injustice in business ethics based on a dominant framework of Iris Marion Young, criticized it for not being sufficiently sensitive to power dynamics and provided an alternative based on a different interpretation of Young’s work.
Work on transnational corporations (the fourth subproject) involved investigating economic production as a space for realizing specific ideas of freedom and analyzed the multinational firm’s specific effects on the freedom of sovereign political communities.
Work on the economic/political theory of the firm (fifth subproject) problematized the influential state/firm analogy which political theorists have long relied upon to theorize corporate power. It has explored how the sociological literature on worker resistance can be utilized in the political theory of the business corporation, developing this into a criticism of economic theories of the firm.
The project aims to push the development of a political theory at several fronts. In response to the stalemate between different legal/political theories of the corporation, it develops a concession theory which makes space for incorporators’ private purposes (i.e. a key contractualist element) in starting a corporation. On this basis, it proposes to integrate the analysis of market failures (especially externalities) into concession theory. This results in a rejection of both mono-fiduciary theories of corporate duties (prevalent in the economic literature) as well as unstructured multi-fiduciary duties (prevalent in stakeholder theory).
In its democratic theory branch, the project questions the basic conviction that motivates much of the literature in the workplace democracy literature in political theory, namely that workers (and only workers) are to be enfranchised in democratization because they are subjected to corporate rules. Based on the general literature on the all-affected principle, it argues that workplace democratization does not only mean giving voice to workers but giving voice to a wide range of people involved with the corporation.
In the social justice component of the project, the dominant assumption in the structural injustice literature of the separation of political and legal responsibility is challenged. As a consequence, a new way of holding corporations accountable for their contribution to structural injustice in the form of legal action and class-action lawsuits is brought into both structural injustice and business ethics literatures.
Finally, the project broadens the political theory of the corporation to two new fields. On the one hand, this is the specific category of multinationals, showing how they, in virtue of their capacity to operate between state orders, operate under no overarching state order, thus allowing them to impose changes upon a state’s legal structure in a dominative way. On the other hand, the project criticizes the existing theories for their focus on the perspective of policy-makers and proposes the complementary perspective of studying the methods of resistance available to workers in capitalist firms.
In its democratic theory branch, the project questions the basic conviction that motivates much of the literature in the workplace democracy literature in political theory, namely that workers (and only workers) are to be enfranchised in democratization because they are subjected to corporate rules. Based on the general literature on the all-affected principle, it argues that workplace democratization does not only mean giving voice to workers but giving voice to a wide range of people involved with the corporation.
In the social justice component of the project, the dominant assumption in the structural injustice literature of the separation of political and legal responsibility is challenged. As a consequence, a new way of holding corporations accountable for their contribution to structural injustice in the form of legal action and class-action lawsuits is brought into both structural injustice and business ethics literatures.
Finally, the project broadens the political theory of the corporation to two new fields. On the one hand, this is the specific category of multinationals, showing how they, in virtue of their capacity to operate between state orders, operate under no overarching state order, thus allowing them to impose changes upon a state’s legal structure in a dominative way. On the other hand, the project criticizes the existing theories for their focus on the perspective of policy-makers and proposes the complementary perspective of studying the methods of resistance available to workers in capitalist firms.