The Dynamical View of Business Corporations

Abstract

Abstract Chapter 7 addresses normative questions about the business corporation in light of the theory laid out in earlier chapters. Many theorists think of business corporations as stand-alone authority structures on the model of the state. Thinking of the corporation this way leads to an overly personal view of the moral subordination of individuals in an advanced market economy. Moral subordination in a market society is significantly subordination to this impersonal process. The “dynamical view” of the business corporation shows that corporations come together and break apart as part of the market coordination process the way that the price system maintains an efficient pattern of production and consumption in society. The right way to structure a market economy focuses on the internal authority structure of business corporations and various features of corporate law as parts of a wider coordination mechanism that must satisfy the requirements of reason sensitivity, transparency, and trustworthiness.