Markets & Democracy: The Illegitimacy of Corporate Law
Corporate law does not conform to ordinary democratic norms. Unlike human citizens, corporations may decide which law will govern their most fundamental acts of self-governance. The corporate law corporation choose in turn influences the corporate goals and decision-making processes that determine what the corporation looks for in corporate law in a reflexive system independent of ordinary political processes.
This system seems on its face to violate the most fundamental principle of popular sovereignty–all non-Delaware citizens of the United States are excluded from even formal participation in the process of determining American corporate law, and even Delaware citizens are reduced to a largely formalistic ratification role of results coerced, to a large extent, by the market for corporate control and the internal norms of a self-replicating system of law that has escaped from political control.
Corporate law scholars have devoted many pages to debating whether the surrender of corporate law to a market for corporate reincorporation generates substantively good or bad results, but there has been virtually no discussion of whether this process can be squared with the American commitment to self-governance. This Article aims to address that latter issue–with its obvious implications for other areas in which we, consciously or unconsciously, decide to subordinate politics to markets or vice versa.
Business Organizations Law | Conflict of Laws | Jurisprudence | Law and Society | Public Law and Legal Theory
Date of this Version
Daniel J.H. Greenwood, "Markets & Democracy: The Illegitimacy of Corporate Law" (May 12, 2005). bepress Legal Series. bepress Legal Series.Working Paper 617.