Corporations and Citizenship

Corporations and Citizenship

Copyright Date: 2014
Pages: 392
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  • Book Info
    Corporations and Citizenship
    Book Description:

    President Theodore Roosevelt once proclaimed, "Great corporations exist only because they are created and safeguarded by our institutions, and it is therefore our right and duty to see that they work in harmony with those institutions." But while corporations are ostensibly regulated by citizens through their governments, the firms in turn regulate many aspects of social and political life for individuals beyond their own employees and the communities that support them. Corporations are endowed with many of the same rights as citizens, such as freedom of speech, but are not themselves typically constituted around ideals of national belonging and democracy. In the wake of the global financial collapse of 2008, the question of what relationship corporations should have to governing institutions has only increased in urgency. As a democratically sanctioned social institution, should a corporation operate primarily toward profit accumulation or should its proper goal be to provision society with needed goods and services?Corporations and Citizenshipaddresses the role of modern for-profit corporations as a distinctive kind of social formation within democratic national states. Scholars of legal studies, business ethics, politics, history, and anthropology bring their perspectives to bear on particular case studies, such as Enron and Wall Street, as well as broader issues of belonging, social responsibility, for-profit higher education, and regulation. Together, these essays establish a complex and detailed understanding of the ways corporations contribute positively to human well-being as well as the dangers that they pose.Contributors:Joel Bakan, Jean Comaroff, John Comaroff, Cynthia Estlund, Louis Galambos, Rosalie Genova, Peter Gourevitch, Karen Ho, Nien-hê Hsieh, Walter Licht, Jonathan R. Macey, Hirokazu Miyazaki, Lynn Sharp Paine, Katharina Pistor, Amy J. Sepinwall, Jeffery Smith, Jeffrey L. Sturchio, Greg Urban.

    eISBN: 978-0-8122-0971-6
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Chapter 1 Why For-Profit Corporations and Citizenship?
    (pp. 1-28)
    Greg Urban

    In July 2011, Christopher Cristwell, a Starbucks barista in Chowchilla, California, posted a YouTube video. The video showed Cristwell, shirtless but clad in a green Starbucks apron, singing a song about the barista experience. The song delivers a steady rant about customers, his job, even his friends: “Hello rich white lady, I already know what you want / you want a skinny vanilla latte, young debutante / well that drink won’t make you skinny, you gotta work for that / and just in case you’re running, I just called you fat.” Two months later Cristwell was fired. Alan Hilowitz, a...

    • Chapter 2 Corporate Power and the Public Good
      (pp. 31-46)
      Lynn Sharp Paine

      Corporations are instruments. And, like most instruments, they can be used for good or ill. In this chapter, I focus on the corporation’s power for good.¹ This might seem an odd choice of topic, especially at a time when the news is filled with cases of corporate mismanagement, influence buying, and wrong-doing that threaten the public interest.² In this context, getting to the root of corporate malfeasance might seem a more urgent task. Yet, while corporate malfeasance certainly merits attention and is a topic I have addressed at length elsewhere, it is also important to recognize that corporations also have...

    • Chapter 3 How Big Business Targets Children
      (pp. 47-56)
      Joel Bakan

      It may appear that, as a constitutional scholar, I have strayed beyond my disciplinary boundaries by publishing a book entitledChildhood Under Siege: How Big Business Targets Children. However, in this age of “increasing convergence of public and private agendas,” as the International Business Leaders Forum has described it,¹ I find it increasingly difficult to separate matters of constitutional governance from those relating to the constitution of private power. What I examine is one aspect of the relationship between these public and private domains.

      My central claim is that in five different areas—marketing and media, pharmaceuticals, environmental toxins, child...

    • Chapter 4 Corporate Social Purpose and the Task of Management
      (pp. 57-73)
      Jeffery Smith

      In the midst of the postwar economic boom—well before the field of business ethics was formally recognized in the academy—Howard Bowen wrote inThe Social Responsibilities of the Businessmanthat managers should be evaluated not merely with respect to standard entrepreneurial goals but also with respect to “the objectives and values of our society.”¹ Bowen’s basic point was that business managers are stewards of the public good and are morally responsible not only for enhancing the value of their companies, but also for the realization of wider social goals such as distributive justice and the economic development of...

    • Chapter 5 Corporate Purpose and Social Responsibility
      (pp. 74-87)
      Jeffrey L. Sturchio and Louis Galambos

      What is the purpose of the corporation? Who should control its decisions? Who should allocate its resources? And does the corporation have obligations beyond those of investing its shareholders’ money and providing them with returns? These issues have been perennial topics of debate in boardrooms and business schools for decades, at least since the classic analysis of Adolf A. Berle and Gardiner C. Means onThe Modern Corporation and Private Property.¹ We address these questions in this chapter through a historical analysis of the changing institutional, economic, and political contexts that shaped the evolving understanding of corporate purpose and social...

    • Chapter 6 Education by Corporation: The Merits and Perils of For-Profit Higher Education for a Democratic Citizenry
      (pp. 88-106)
      Amy J. Sepinwall

      For-profit colleges have elicited wildly divergent reactions, with critics vilifying them and their executives, and supporters seeing in the institutions a necessary and laudable complement to public and nonprofit institutions. As I propose in this chapter, the truth likely likes somewhere between these extremes.

      The for-profit educational sector has become an increasingly prominent and powerful presence within higher education. For-profit (FP) colleges have seen an average rate of growth of 9 percent per year, over each of the past thirty years.¹ Today FPs educate roughly 1.4 million postsecondary students in the United States, accounting for 7 percent of all postsecondary...

    • Chapter 7 Enron and the Legacy of Corporate Discourse
      (pp. 107-126)
      Rosalie Genova

      Enron’s bankruptcy filing in 2002 and its widespread repercussions did not seem likely to be soon forgotten. Yet the financial crisis beginning in the fall of 2007 eclipsed the Enron scandal and others of that time. Furthermore, as of 2010, the Supreme Court’s ruling inCitizens United v. Federal Election Commissionand the Dodd-Frank financial reform law supersede 2002’s “post-Enron” regulations. Still, Enron’s name echoes in commentary and analysis, from popular media sources to academic studies in corporate governance, securities law, accounting, and business ethics.

      In this chapter, I situate Enron’s collapse as a historically meaningful event. The “meaning” of...

    • Chapter 8 Saving TEPCO: Debt, Credit, and the “End” of Finance in Post-Fukushima Japan
      (pp. 127-140)
      Hirokazu Miyazaki

      The recent global financial crises suggest the era in which finance served as a site of vigorous intellectual and socioeconomic experiment may be coming to an end. Finance has always been about uncertainty, and financial market professionals have devised a variety of models, tools, and techniques for managing uncertainty by translating it into the language of calculable risk. But the global financial crisis of 2007-2008 and the subsequent European sovereign debt crisis have demonstrated the ultimate limitations of risk-based models, tools, and techniques, and of the human actors that use them.¹

      The sense of the end of finance created by...

    • Chapter 9 The Rise and Embedding of the Corporation: Considerations for American Democracy and Citizenship
      (pp. 143-164)
      Walter Licht

      A remarkable accident of history: in the United States in the second half of the nineteenth century, an extraordinary set of men miraculously appeared, who through their uncommon determination, foresight, innovativeness, and daring built the mammoth business enterprises that propelled the United States to economic majesty. The names are familiar—Carnegie, Rockefeller, Ford, Morgan, among others—and they serve in high school textbooks and popular histories and biographies as the explanation for the rise and embedding of the American corporation: the subject matter of this chapter.

      Hardly a scholar today subscribes to the Great Man Theory of History ingrained in...

    • Chapter 10 Citizens of the Corporation? Workplace Democracy in a Post-Union Era
      (pp. 165-182)
      Cynthia Estlund

      Once upon a time, in the cauldron of economic depression and widespread labor unrest that produced the New Deal, the idea of “industrial democracy” burst into mainstream discourse and helped produce the National Labor Relations Act (NLRA). The NLRA, still the foundation of U.S. labor law, created a framework for industrial democracy through union representation and collective bargaining. Of course, unionization was not mandatory; it was an option that could be exercised by a majority of workers in a particular bargaining unit, and that employers (at least since the 1947 Taft-Hartley amendments to the NLRA) could freely and quite aggressively...

    • Chapter 11 Politics and Corporate Governance: What Explains Policy Outcomes?
      (pp. 183-198)
      Peter Gourevitch

      The enormous influence of modern business corporations on contemporary society has been widely recognized. Less recognized, but perhaps equally important, has been the role of society in shaping corporations and affecting their internal operations. In this chapter, I examine the influence of political processes outside the corporation on corporate governance. By “corporate governance,” I mean the political system inside the firm—that is, the allocation of power to make authoritative decisions regarding the elements of production—capital, labor, profit, and income. My contention is that the political system inside the firm is shaped by the political system outside the firm....

    • Chapter 12 The Nature and Futility of “Regulation by Assimilation”
      (pp. 199-231)
      Jonathan R. Macey

      In finance, regulators and market participants ostensibly have overlapping, if not identical goals. At least in theory, both regulators and market participants want to be able to measure both risk and return accurately and in a timely fashion and to improve the enforceability and overall efficacy of contracts in order to enable firms to make credible commitments to investors and to cause scarce resources (capital) to flow to those market participants who can make the best use of it. Firms in search of investors and customers want to distinguish themselves from their rivals. Regulators want to enable investors and customers...

    • Chapter 13 Multinational Corporations as Regulators and Central Planners: Implications for Citizens’ Voice
      (pp. 232-248)
      Katharina Pistor

      Multinational corporations (MNCs) have been in the literature on business organizations and governance at least since the 1970s. Their size and economic power have raised questions about how best to govern these entities. While not fundamentally different from the governance issues that afflict domestic corporations, including but not limited to corporate governance, antitrust, and compliance with labor and consumer protection regulation, the fact that there is no unified political structure with the appropriate legal and regulatory instruments to control transnationally operative MNCs creates a governance vacuum.¹ Those who trust the forces of the marketplace view such concerns as vastly overstated....

    • Chapter 14 Ethnicity, Inc.: On the Affective Economy of Belonging
      (pp. 249-266)
      Jean Comaroff and John Comaroff

      In October 2000,Business Day, a leading South African newspaper, published an extraordinary story. Its title read: “Traditional Leaders Form Private Firm for Investment.”¹ Contralesa, the Congress of Traditional Leaders, is the voice of ethnicity in this post-colony. It speaks for culture, customary law, and the collective rights of indigenous peoples. Also for the authority of chiefs who, as a power bloc, seek to change the national constitution. Their objective is a nation-state that accords them sovereign autonomy over their realms, a nation-state that puts the dictates of indigeneity before the universal rights of citizens.

      According toBusiness Day, Contralesa...

    • Chapter 15 Corporate Nostalgia? Managerial Capitalism from a Contemporary Perspective
      (pp. 267-288)
      Karen Ho

      From the standpoint of the contemporary moment, when socioeconomic inequality in the United States has surpassed even that of the Great Depression, is it possible that we might want to revisit and reconsider the strengths and potentials of bureaucratic managerial capitalism? While the modern corporation may have inflicted suffocating routinization and hierarchical segmentation on its employees, it was also remarkably stable and resilient in its organizational form, which allowed the formation and fostering of an employee social contract. What might it mean to reinterpret such bureaucracies as avenues for, even protectors of, class mobility, greater equality in compensation, and stable...

    • Chapter 16 Can For-Profit Corporations Be Good Citizens? Perspectives from Four Business Leaders
      (pp. 289-300)
      Nien-hê Hsieh

      Can for-profit corporations be good citizens? If being a “good citizen” means acting responsibly and contributing to the good of society, then a quick glance at public opinion would suggest that for many people, the answer is no. Various retellings of the financial crisis of 2007–2009, for example, assign a central role to the activities of business enterprises, including mortgage lenders, banks, and ratings agencies.¹ Public polls reveal growing distrust in business and dissatisfaction with the size and influence of major corporations.² And, for-profit corporations face continued criticism that they fail to act responsibly with respect to a variety...

  6. Notes
    (pp. 301-366)
  7. List of Contributors
    (pp. 367-372)
  8. Index
    (pp. 373-382)
  9. Acknowledgments
    (pp. 383-384)