The modern corporation: a critical survey

This critical survey reviews long standing debates between the ‘entity’, ‘contractarian’ and ‘stakeholder’ theories of the corporation. These perspectives are shown to obscure the legal structuring power corporate law confers on the owners of capital, rewriting corporate property relations in terms of managerial interest intermediation, contractual voluntarism, or stakeholder ‘property’ rights, respectively. Marxist analysis and the perspective of workers and labour law are utilized to show the limitations of these debates and emphasize the constitutive role of class relations in corporate law. From this perspective, the dominant theories fail to deal with fundamental characteristics of the modern corporation: the shifting of risk, the exercise of control without liability, and patterns of hierarchy beyond the firm. New perspectives emerging from the ‘Law and Political Economy’ movement in the US, in particular Katherina Pistor’s analysis of the ways in which capital is ‘coded’ in law to the advantage of elites (The Code of Capital) are more promising. What Pistor brings out is twofold. Firstly, the critical role of private law rules in the core ‘modules’ which underpin capital. Secondly, the relative autonomy with which elites are able to utilize these rules to enhance and protect their wealth. Yet Pistor ignores the labour relationship and the class dimensions of the code of capital in her analysis. The survey concludes with reflections on the limits to legal reform of corporate law, and directions for future research bringing together analysis of the code of capital and Marxist perspectives.