Abraham Singer has written a book called The Form of the Firm: A Normative Political Theory of the Corporation (OUP 2018). I have a short review up at Perspectives on Politics.
Firms are interesting because they aren’t individualistic (like markets) or egalitarian (like formal democratic politics), but hierarchical and bureaucratic. Political philosophy has tended to focus on basic social institutions, and business ethics on the conduct of individual economic agents. Singer asks why firms exist, what purposes they serve, and what standards should we apply in assessing their behaviour, and the laws and policies that regulate / constitute firms. He does a good job of explaining the economics to non-economists (at least so thinks this non-economist). The central empirical idea is that firms leverage social norms to overcome problems of trust that arise in purely contractual relationships when one of the parties is asked to invest in a specific form of production, making it dependent on the other party continuing to purchase what it produces. If firms are already taking advantage of norms, why not make these norms democratic? Singer’s response is that firms need to be able to compete against other firms and against the market itself, and that there are costs to more democratic forms of ownership and workplace organization. So he thinks government should encourage but not mandate worker cooperatives. On the business ethics side, he thinks firms and their managers have responsibilities other than maximizing shareholder profits, but not to stakeholders generally. The main extra duty is not to create or take advantage of market failures that arise from factors such as externalities and unequal information, though Singer also floats the idea that firms have responsibilities to address the most egregious ‘justice failures’ as well. I learned alot from this book. I think next year I will incorporate a chapter in my PPE course, probably for the topic of economic / workplace democracy.