Can the corporation be re-imagined in ways that are more beneficial to society as a whole? [Just asking]

Michael Lind, Profit, Power, and Purpose: Rethinking the Modern Corporation, The Hedgehog Review, Fall 2023.

Lind opens with an interesting review of the history of the corporation as a way of organizing business activity, pointed out, among other things, that the modern corporation is a product of the mid-19th century. Then:

The greatest challenge presented by modern corporations, small as well as large, involves purpose—specifically, the alignment of their activities with one or another public purpose. In premodern corporations, this alignment was inescapable. A chartered turnpike monopoly existed to build and operate a public toll road; the private profits of its operators were clearly subordinate to its public mission, as spelled out in its charter.

Today, by contrast, for the price of registering and paying fees online, in most states anyone can create a corporation. There are no limits on what the new company can do. Today its directors might decide to sell umbrellas, tomorrow they may decide to go into the automobile or movie industry. If the company is a publicly traded corporation, then many of the shares will be held on behalf of individuals by mutual funds and the like, and the managers of such funds will be solely interested in the rate of return of particular firms, not their contributions to society. If it is more profitable for the corporation to get out of automobile manufacturing and go into an unproductive industry like online casino gambling, then most of its shareholders and lenders may approve, even if the price of profit is derelict manufacturing towns haunted by fentanyl addicts and lives around the world wrecked by gambling. And remember, this no mere ephemeral partnership; it is a potentially immortal legal entity enjoying the privilege of limited liability.

The problem with trying to align the profits and power of our hypothetical corporation with some public purpose by means of regulation is that corporations can easily evade regulations by means of geographic arbitrage, choosing a different state or country for a more permissive incorporation charter or a more lenient legal environment. It is difficult to overcome a “race to the bottom” in corporate regulation among the US states, because many state governments make “smokestack chasing”—luring corporate facilities or headquarters with low taxes and light regulations—central to their economic development strategies, as do many foreign countries in a globalized economy.

Lind then goes on to review other measures that have been taken to better align corporate activity with broader social interests, to no particular conclusion. Still, a worthwhile read.