Uppsala Forum Guest Lecture: "Constitutional Democracy and the Corporation—the Long View"

There is an unexamined paradox in the history of government in the West. The “absolutist” monarchs of Europe overwhelmingly chartered republican corporations—e.g., towns, universities, and guilds—whose members elected their leaders. Indeed, modern constitutional democracy is patterned after them. Yet modern democracies, especially in the Anglophone world, have overwhelmingly chartered authoritarian corporations—e.g., modern universities and Anglo business corporations—whose subordinates are not considered members and have no say. As a result of this Great Inversion, corporations, which once distributed power and wealth, now concentrate them, straining constitutional democracy.

This lecture presents a new analytical, historical, and normative framework for understanding corporations and their changing relationship to the constitutional democratic state. Corporations are not private contractual associations. They are public-private hybrids that receive their legal “personhood” and their governing authority from the public authority. They are “franchised governments.” Early non-profit corporations such as guilds were generally fashioned to operate like little republics, and they provided a key model for the US constitutional republic. But a mistaken view that stockholders “own” the corporation turned the republican guild inside out, producing the autocratic business corporation. The enormous potential of corporations to increase human goal attainment, even while equitably sharing the fruits from it, is today being squandered, especially in the Anglophone countries, by this enduring mythology about stockholder ownership. The Nordic countries provide promising alternatives that merit further development. This would be aided by an improved theoretical grounding, along the lines developed in the lecture.