BY: SUSAN J. STABILE
St. John's University
School of Law
Available on SSRN
here.
ABSTRACT:
Motivated by a search for alternative ways of addressing the issues of how we think about corporations and whether there is a legitimate basis upon which to argue that a corporation has an obligation to behave in an ethical and socially responsible way, this article looks to what Catholic legal theory contributes to our thinking about the nature of the corporation. Scholars such as Michael Novak, Steve Bainbridge and Mark Sargent have argued for competing visions of a Catholic vision of a corporation.
This Article articulates a particular Catholic vision of the corporation, a communitarian vision that sees the corporation both as a community and as existing as part of a larger community, a vision that emphasizes the corporation's social responsibilities. It then elaborates on what this vision means about a corporation's obligations and the role of law in regulating corporations. Finally, the Article defends the value of proposing a Catholic vision of the corporation, addressing the question why Catholic social thought has something useful to add to public debate in a pluralist society.
I am going to have to read this carefully, because I don't quite understand the concept of a "Catholic view" of the corporation. Corporations are legal entities created, more or less, today through general corporation statutes (in the 19th century and earlier, you generally had to go to the relevant legislature for a charter.) All of which suggests to me that corporations are simply a fact of the legal landscape, just as horses are a fact of the landscape around my house.
It seems to me that there could well be a "Catholic view" (or whichever denomination you choose) of how people who form corporations ought to act, just as there could be a "Catholic view" of how tortfeasors ought to behave.
But, when we get to defining legal obligations of the corporation to be to the larger community, I get a bit confused. I have just started the excellent
The Church and The Market: A Catholic Defense of the Free Economy by Thomas Woods, Jr., and his opening chapter discusses the question of the intersection of faith and economics (which is to say, faith and reason). After quoting several devout economists on their concerns about Church teachings on economics where those teachings appear to contradict basic economic principles, Woods writes:
All these economists have tried to say is that if churchmen wish to weigh in on important economic questions, they cannot do so in a way that legitimately binds the conscience unless they pay very serious attention to what the secular discipline of economics has to say.
It is perfectly unobjectionable for churchmen to say that churches should be built with the sturdiest materials in order that they might remain standing for as long as possible. But they go beyond their competence as churchmen and their ability to bind the faithful on pain of mortal sin as soon as they say "The best building materials are A, B, and C, and the wisest techniques to use are X, Y, and Z." A churchman qua churchman has been vouchsafed no particular insight into such a question. (p.6)
It thus seems reasonable to me to say that any attempt to understand corporations cannot be taken seriously unless it comes to grips with, for example, Coase's
Nature of the Firm. Understanding corporations without understanding transactions costs, agency theory, and so forth is like an understanding of physics without gravity - it isn't likely to tell us much about the world in which we live.
That all said, I look forward to reading Stabile's article and learning exactly what she means by a "Catholic view" of corporations. The paper sounds interesting from the abstract.