A New Concept of Corporations: A Contractual and Private Property Model

Social responsibility --the doctrine that corporations are obligated to place public service ahead of private profit-rests on three premises: that corporations cannot exist without governmental permission and special privileges; that corporations are artificial legal entities and therefore not entitled to the same rights as individuals or other groups; and that giant publicly traded corporations are not private property because they are not personally managed by their owners. This Article challenges these premises, arguing that corporate features are created by contract; that the entity concept is illogical and unnecessary; and that giant corporations are private property because the officers are authorized agents of the shareholders. The Article thereby calls social responsibility into question