
Contents
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I The Corporate Economy I The Corporate Economy
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II The Nature of Corporate Power II The Nature of Corporate Power
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Decision-Making Power Decision-Making Power
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Power and the Market Power and the Market
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The Theory of Consumer Sovereignty The Theory of Consumer Sovereignty
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Discretion in Making Delegated Decisions Discretion in Making Delegated Decisions
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Political Power Political Power
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III Corporate Power and the Need for a Public-Interest Justification III Corporate Power and the Need for a Public-Interest Justification
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The Concession and Contract Theories of the Company The Concession and Contract Theories of the Company
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Shareholder Rights and Corporate Legitimacy Shareholder Rights and Corporate Legitimacy
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A Revised Contract Theory A Revised Contract Theory
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A Property Rights Theory A Property Rights Theory
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Historical Entitlements Historical Entitlements
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Property Rights and Freedom Property Rights and Freedom
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Rights Protecting Interests Rights Protecting Interests
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Conclusion: Back to Social Enterprises Conclusion: Back to Social Enterprises
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IV Companies and the Creation of Social Wealth IV Companies and the Creation of Social Wealth
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The Relationship between Profit Maximization and Wealth Maximization The Relationship between Profit Maximization and Wealth Maximization
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Profit Maximization and Shareholder Rights Profit Maximization and Shareholder Rights
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The Justificatory Force of the Maximization of Social Wealth The Justificatory Force of the Maximization of Social Wealth
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Cite
Abstract
This chapter defends the claim that corporate social decision-making power must be exercised in the public interest. It specifically discusses some of the ways in which companies exercise power and explores the relevance of the possession of power to the concerns, or what should be the concerns, of company law. It starts by briefly surveying the corporate economy. It provides a background for the consideration of the nature and scope of corporate power. It also supports the claim that the possession of power by companies is justifiable only in so far as they promote the public interest, and accordingly that society is entitled to demand that corporate policies serve that interest. Moreover, it sets out a provisional theory explaining how companies best further the public interest and the implications of that theory for company law. This brief survey reveals some of the difficulties of establishing that shareholders are morally entitled to control companies by virtue of their legal property rights, and hence of attempting to legitimate corporate power by reference to those rights.
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