Rival ideas about property rights and liberty are at the heart of the ways in which market economies are legally structured. However as Abraham Lincoln said: “We all declare for liberty; but in using the same word we do not all mean the same thing . . . The shepherd drives the wolf from the sheep’s throat, for which the sheep thanks the shepherd as a liberator, while the wolf denounces him for the same act as the destroyer of liberty . . . Plainly the sheep and the wolf are not agreed upon a definition of the word liberty” (Address at the Sanitary Fair, Baltimore, Maryland, April 18, 1864). This ambiguity, which speaks to a central controversy in capitalism in regards the nature and distribution of property relations, is illustrated in this course via the study of the legal foundations of corporations. From the scandal regarding Cambridge Analytica and Facebook regarding the harvesting of private information for commercial and political purposes to the controversies about gun control, the political activism of the National Rifle Association, and the significance of Citizens United we are continuously confronted by the centrality of corporate governance in the society. And of course broader questions regarding the economic regulation of corporations (e.g. with respect to environmental, taxation, or labor laws) have been central to political debates since colonial times.
This course on Law and Political Economy will explore corporate governance through the lens of legal and business history. A central theoretical argument of the course is that politics and the economy are deeply interwoven and law is the mediating institution that structures the economy. Conflict and power struggles mold, alter, and occasionally disrupt the law/economy/politics nexus. This theoretical insight will be used to analyze the dynamics of corporate governance and economic regulation in both the US and other contexts. One of the central questions that we will discuss is the “regulation” versus “deregulation” dichotomy which is so central to popular discourse and economic debates. Quite simply: can we really conceptualize corporations (and the economy) outside their legal and political context? We will explore certain core ideas in neoclassical economics through the insights of Law and Political Economy so as to engage the conventional Law and Economics tradition. We will at every step compare theoretical arguments from different theoretical schools in economics and weave into the analysis insights from constitutional law and corporate law.