RUNNING HEAD: THE RISE OF MODERN CORPORATIONS
The Rise of Modern Corporations:
A Study of Corporate Social Responsibility and Corporate Legal personality
The rise of modern corporations is a phenomenon that has been dominating the discussions of the intellectual circles of many fields (predominantly social sciences). The topic has raised significant and worrisome concerns which have been addressed by both sides of the political aisle. Recent debates in regards to the modern capitalist corporations revolve around the matters of corporate legal personality and corporate social responsibility. The question at hand is whether corporations are to conduct business in pursue of their “individual” self-interest or they are obligated to gear their actions toward the well-being of society as a whole. In his New York Times column, The Social Responsibility of Business Is to Increase Its Profits, Milton Friedman takes on the first position and describes corporate social responsibility as an immoral, dangerous doctrine by reinfusing the solidity of corporate artificial personhood. On the other hand, Harry Glasbeek, in Wealth by Stealth, attacks the very notion of corporate legal personality by describing it as a fictional creation that gives corporations an immense power to achieve their profit-driven goals at the cost of society’s welfare. This essay seeks to argue that corporations are to be socially responsible for their actions whether they are presumed to be a person or otherwise. In this paper, we shall discuss the origin and definition of corporation first; then we will discuss the opposing views of Friedman and Glasbeek, and conclude by drawing on the importance of legal and ethical subjugation of corporations to social responsibility.
There has been a lot of controversies as to the origin of corporations. According to Ted Nace (2003), one can trace the footsteps of corporations back to the English guilds of the thirteenth and fourteenth century which were “not unified businesses, but rather umbrella groups for the members of particular crafts. But already, some seeds of the corporation can be seen” (p. 29). Corporations, however, as we know them today (i.e. multinational giant corporations), are seemingly the outcome of the post-American Civil War political and economic ideologies. In The Corporation Noam Chomsky explains, “The dominant role of corporations in our lives is essentially a product of the, roughly the past century. Corporations were originally associations of people who were chartered by a state to perform some particular function” (Simpson, Abbott, Achbar, & Bakan, 2003). Thus, one can infer that the original idea behind corporations was to assist municipal governments in providing public services and goods (e.g. building a road). Furthermore, the activities of such associations were entirely regulated by their state legislators; Mary Zepernick mentions that the early chartered corporations were given instructions as to the longevity...