Title: Corporations, Workers, and the Public Interest
Abstract: The corporate scandals of the past year have raised profound questions regarding corporations and the interest. As Thorstein Veblen observed, in a society dominated by pecuniary interests corporations are presumed to be operating in the unless proven otherwise (1988). However, accounting records rigged to inflate profits, insider deals to promote stock sales, and excessive executive compensation in companies in or near bankruptcy are actions that cannot be construed as being in the by anyone's standard. In his classic article on corporate responsibility, Milton Friedman opposed enforcing standards of socially responsible behavior on corporations because it would constitute doing good with someone else's money (1970). According to Friedman, businesses have a fiduciary responsibility to their stockholders to maximize profits. Seen in that context, the actions of corporations such as Enron, WorldCom, Tyco, and others disclosed over this past year are noteworthy not because they represent cases of corporate misdeeds but because they violate even the most minimal standard of responsible behavior-the protection of stockholder interests. In this paper, we examine the role of the legal system in erasing the public interest from official corporate duties and in relieving corporations of any responsibility to their own workers. In the first section we discuss the importance of the in the early history of corporation law. We then examine the question that preoccupied John R. Commons and other progressives in the early twentieth century, namely, what is the duty of corporations and government in regard to labor? More specifically, we ask, just who is included in the interest? Recent corporate scandals have included actions that were clearly harmful to workers, including layoffs, reductions in
Publication Year: 2003
Publication Date: 2003-06-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 6
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot