A corporation is a complex entity, not a unified mind. As Adolph
Berle and Gardiner Means pointed out in The Corporation and Private
Property, the essence of a corporation is the fragmentation of accountability
among various internal groups. Those who occupy the key leadership
position (the professional managers) aren’t necessary its owners;
those who are owners (the stockholders) are generally neither in charge
nor legally liable; and those who are supposed to be exercising strategic
direction on behalf of the owners (the board of directors) are rarely sufficiently
informed nor sufficiently empowered to actually fulfill their
As with constitutional law, so with the private law of contracts, of property, and of torts. Judge-made rules in those fundamental categories had the result of transferring the social costs of private enterprise from the enterprise itself to the workingman or to society at large. Tort law provides apt illustration. Under its doctrines, a person who willfully or negligently harms another’s person or property must answer by paying money damages. The analogue of contract, which is a consensual obligation, a tort is a nonconsensual legal obligation. Who, then, bore the costs, in accidents and in deaths, of the new industrialism? Not the businessman. Not the corporation. The worker himself. (Often those workers were children.) And who bore the costs of pollution and other social costs? Society at large. How did this come about? In tort law judges created doctrines of “contributory negligence,” “assumption of risk,” and the “fellow servant rule,” all of which served to insulate the enterprise from liability. By “freely” taking a job, said the judges, the workers “assumed the risk” of any accident that might occur.
As corporations gain in autonomous institutional power and become more detached from people and place, the human interest and the corporate interest increasingly diverge. It is almost as though we were being invaded by alien beings intent on colonizing our planet, reducing us to serfs, and then excluding as many of us as possible.
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