Corporations! A Miscellany of Fallacies

Corporations have been getting a bad rap lately. Many blame “corporations” for a litany of ills that, upon closer examination, should be blamed on other institutions. Our goal is to analyze a miscellany of fallacies concerning the Citizens United case, corporate personhood, the stakeholder theory, the affected interests principle, and finally ending with the deeper fallacies concerning the rights of capital that are embedded in the conventional economic theories of capital and corporate finance.

Table of Contents

Introduction

Citizens United and Corporate Personhood

Was corporate personhood the basis for Citizens United?

Is corporate personhood based on an 1886 Supreme Court Decision?

Is ‘shareholder democracy’ the answer?

Is abolishing corporate personhood the answer?

Stakeholder Theory and the Affected Interests Principle

Is maximizing shareholder value legally mandated?

Distinguishing positive and negative control rights

The corporate governance debate

What about cooperative corporations?

Who can legitimately and effectively control corporate management?

What are the Rights of Capital?

Does a Corporation Own Itself?

On personal rights and property rights

Is a conventional corporation a “capital-managed firm” or a “capital-suppliers’ cooperative”?

The fundamental myth about the “ownership of the means of production”

The Briggs Manufacturing example

There is no “ownership of the firm” in the going-concern sense of the “firm”

The misnomer of “capitalism”

The fundamental myth in capital theory and corporate finance theory

Conclusions

References

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