Friday, 11 January 2008

The Pursuit of Profit

Whenever I read critique's of corporate power, I always see Ford vs. Dodge get a mention. That is the case that famously decided that a corporation has no goal but the pathological pursuit of profit for shareholders. In the case Mr. Ford wanted to give his workforce a bonus, the shareholders filed suit and won. Thus the common critique from the left is radical judicial activism has caused this psychopathic pursuit for profit. [find citations] and this is a core principle of Anglo-American corporate law.

Indeed it is a core principle, however there are also plenty of other legal obligations a corporation has. The genesis of the Tort of negligence is an example of that. Companies have a duty of care to make sure their products do not harm consumers (Donohogue v Stevenson), they also have innumerable obligations under environmental law. However these are less often followed, despite them having the same normative force as the decision in Ford vs. US. The main reason why the normative force does not result in substantive changes is due to the lack of enforcement, which is a structural problem of capitalist societies. i.e. powerful groups can enforce their legal rights, the right to exploit the environment for profit. They have white shoe and magic circle law firms for that. However, the majority cannot enforce their environmental rights due to lack of either standing in court lack of funds or under staffed and overworked enforcement bodies. However, it does also seem to be as Friedman said, a core of human nature - to profit. Well, human nature of elites and power centers.

Ford vs Dodge is not the reason we live under corporations pathological pursuit of power, that argument seems to me to reverse the chronology and ignore the rest of the innumerable legal obligations corporations are under and hugely overstate the importance of a single case. Corporations are required by law to peruse profit, but that's irrelevant, they're also required to follow environmental regulations and they rarely do. The problem is not Ford, the problem is formal equality necessarily leading to substantive inequality. A critique that usually holds accurate for all of law.

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