Robert Hockett —
Last month Senator Elizabeth Warren proposed an innovative – or better yet, restorative – new piece of legislation to the US Senate. Something like the Senator’s Accountable Capitalism Act, which would, among other things, hold corporations accountable to other stakeholders besides shareholders, is long overdue. It is in consequence much more than welcome. This owes less to the bill’s likely passage, however – it will probably die in committee this time around – than to the occasion its proposal affords us to recollect (a) what incorporation legally is and (b) what incorporation actually is for.
We seem as a society and as a legal culture to have forgotten how the corporation as a ‘publicly’ privileged mode of ‘private ordering’ came into being. Hence we have come likewise to overlook how the irreducible public/private hybridity of this now-ubiquitous institutional form gives the lie to familiar liberal and neoliberal clichés concerning a supposed fundamental divide cleaving both life in communion with others, and that life’s legal emanations, into radically distinct public and private ‘spheres.’
Senator Warren’s proposal accordingly provides not only lawyers, but also the broader public a rare opportunity to recall the true nature and purpose of incorporation – and, with those, the institutional continuum along which our contiguous public and private modes of life and collective agency are arrayed. In so doing, it also affords us an opportunity to restore to America’s productive life a critical institutional element that lay at the core of its economic ‘growth miracles’ and ‘social contracts’ alike during its most prosperous past eras.
I’d like in two posts, then, first to recall in detail what needs restoring and why, then to sketch how to restore it. In the present post I’ll stick to that what and why. In the follow-on post I’ll turn to the how – I’ll elaborate, in short, how Senator Warren’s proposal can be viewed as a sequence of first steps toward the requisite restoration.