Financialized Corporate Governance and Inequality
Taking a closer look at the historical emergence of the modern corporation, we find that the corporate form provides a specific type of organizational representation in law and in economics. We argue that the specificity of this representation has allowed for shifting conceptions of ownership and control, which in turn have been central for a large number of special perks, and protections. We will then argue that the specific perks and protections accorded to the corporate form are central for an oligopolistic reorganization of the economy and, thereby, became a major instrument for the societal distribution of wealth from the end of the 19thcentury onwards. We also argue that, historically, the perks that allowed a corporate economy to be developed came with specific legal and social constraints in terms of claims to ownership, the control over strategic direction, and claims to the division of corporate surplus value.
With these elements in place, we will show how the turn toward financialized corporate governance from the 1970s onwards was not a response to a concrete crisis, but a premeditated response, that focused on removing the political and economic constraints that had been put in place to forestall the capture corporate rents in an oligopolistically organized economy. This will lead us to argue that the discourse of corporate governance presents a central explanatory factor to explain the distribution of societal wealth and is, therefore, a major factors that explain the macro-outcomes of Piketty’s analysis. It will also lead us to argue that at least part of the background for the redistribution of social wealth is connected to the abuse of the corporate form and the oligopolistic type of economic organization it enables. This leads us to conclude that such abuse is not to be countered by ethical arguments, as in CSR, but by referring to the legal shifts in ownership conceptions that enabled the development of the corporate form during the 19th century and by connecting these to the wide legal and economic constraints that allowed the continued use of the corporate form during the 20th century.