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Firms as Persons

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  • Richard Adelstein

    () (Department of Economics, Wesleyan University)

Abstract

This essay asks whether business firms should be treated as moral or legal persons, capable of bearing rights and duties as distinct entities. Building on earlier work describing firms as relational contracts in performance (Adelstein 2010), it considers the nature of legal and moral personality, whether and when rights and duties can be assigned independently without a balancing symmetry, and what qualifies a subject for personhood, and thus for rights and duties. It argues for an asymmetric view of the rights and duties of firms. On the one hand, because the purposeful acts of firms typically cannot be reduced to the purposeful acts of any individual participant, there is a residual responsibility for the acts of the firm after the responsibility of each participant has been properly reckoned that can only be attributed to the firm. But on the other, while it may be convenient for participants and others that firms hold rights to ordinary property, because firms are never more than instruments created by living people for their own purposes, they have no right to life or liberty. In the absence of these rights, there is no basis for granting firms political rights to such things as free speech, free association or privacy. A concluding section considers the granting of constitutional rights to business corporations in the United States in light of these arguments.

Suggested Citation

  • Richard Adelstein, 2013. "Firms as Persons," Wesleyan Economics Working Papers 2013-003, Wesleyan University, Department of Economics.
  • Handle: RePEc:wes:weswpa:2013-003
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    File URL: http://repec.wesleyan.edu/pdf/radelstein/2013003_adelstein.pdf
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    References listed on IDEAS

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    1. Gindis, David, 2009. "From fictions and aggregates to real entities in the theory of the firm," Journal of Institutional Economics, Cambridge University Press, vol. 5(01), pages 25-46, April.
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    More about this item

    Keywords

    theories of the firm; contracts in performance; Kantian personhood; collective rights and duties;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • K20 - Law and Economics - - Regulation and Business Law - - - General

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