The Semi-Sovereign Corporation

Abstract

For at least a generation, corporate law scholars have worked within a paradigm of the corporation as a nexus of contracts, using metaphors drawn from contract, property, agency and trust to describe the relationships between shareholders and the firm as something like those of strangers in a market. But historically, corporations were understood to be political organizations much like a miniature state or sovereign. The political view emphasizes that the participants in a firm include more than the public shareholders, that they have relationships with each other that extend beyond the momentary contact of strangers in a spot-market, and most important, that the firm is a self-governing entity for many important purposes. Naturally, it also foregrounds the important issue of how corporations make the decisions they make and why only certain role-holders are enfranchised. In this essay, I begin the process of resurrecting the memory of the semi-sovereign corporation. By examining the history of early corporations in the early colonial enterprises, I focus on the historical connection, now lost, between our business corporations and our municipal, governmental, ones.