Chapter

Introduction

in The Failure of Corporate Law

Published by University of Chicago Press

Published in print February 2007 | ISBN: 9780226306933
Published online March 2013 | e-ISBN: 9780226306988 | DOI: http://dx.doi.org/10.7208/chicago/9780226306988.003.0001
Introduction

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In the United States, public corporations are typically seen as private institutions, and the law governing them is considered a branch of private law (along with contract and property law), which governs relationships among individuals. But the laws controlling corporations should be much more protective of the public good and of the corporation's stakeholders, such as employees, and the law of corporations should be evaluated more as a branch of public law. Once corporate law is correctly seen as public law, it will be clear that significant changes should be made. This book examines core failures of traditional corporate law and spells out some concrete proposals for changes in the law governing corporations. It argues that improvements in corporate governance would have positive impacts on (at least) two of the knottiest economic problems of the last twenty years: stagnant wages for blue-collar workers and stark income inequality. The book looks at cases, economic statistics, and behavioral science to build the argument that the existing framework is fundamentally flawed and that a different framework holds promise of great improvement.

Keywords: public corporations; corporate law; United States; corporate governance; wages; income inequality; behavioral science; public good; public law; stakeholders

Chapter.  1967 words. 

Subjects: Company and Commercial Law

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