Contemporary discussions of the corporation tend to divide into one of two camps: On one side are scholars who treat the firm as a purely economic and contractual entity, while another set of scholars look at corporations in purely political terms. Therefore, the corporation is not merely an economic endeavor; it is a political institution and must therefore serve social ends and not merely profit. In The Form of the Firm, Abraham Singer contends that both of these approaches overstate their cases dramatically, resulting in two wrongheaded, influential accounts of the corporation. He offers a third way that sees the corporation as being both economic and political. First, it is true that corporations exist primarily to increase economic efficiency. However, they do this in ways that distinguish them from the markets in which they operate. Corporations are not natural outgrowths of the free market, but institutions that we have developed to correct market inefficiencies through mechanisms normally associated with politics. Corporations use social power, norms, and state-sanctioned authority to establish economic cooperation in ways that markets cannot. But, Singer argues that they also have an obligation to uphold the norms of liberal democracy that enable their existence and smooth-running in the first place. A profound rethinking of what a corporation actually is and how power within it ought to be structured and exercised, The Form of the Firm will reshape our understanding of corporate governance, corporate law, and business ethics.
The Form of the Firm attempts to unveil the nature of the corporation as it exists in modern liberal societies. The author contends that economic theories understate the importance and danger of corporate power, and should be supplemented with a political analysis that foregrounds the sorts of political and moral values at stake in corporate activity.
