This article addresses our failing ability to hold business corporations to the public interest, or even to bare legality. It defends, in brief compass, the reasonableness of the expectation that corporations provide public benefits as consideration for their public privileges. But as succeeding sections recount, the traditional instrument for holding corporations to the public interest has gradually been undermined; and our standard, punitive tools for holding them even to bare legality, suffer from inherent limitations and fail adequately to deter corporate (...) misconduct. A more adequate approach would be to supplement the current punitive regime with reform of corporate governance in directions that would decrease the temptation of managers to engage in misconduct in the first place. Several possibilities are considered, with the most promise found in allowing corporations to be owned by Danish-style “industrial foundations.” Among its advantages, the reform is realizable and would reduce incentives to corporate misconduct without compromising on performance. Industrial foundations also customarily direct a portion of corporate profits to charity, in effect reinstating the norm that for-profit corporations provide public benefits. (shrink)

Abstract Ilya Somin finds in the public's ignorance of policy issues a reason to reduce the size and scope of government. But one cannot restrict the range of issues that may be raised in a democracy without it ceasing to be a democracy. Jeffrey Friedman argues that, since feedback on the quality of private goods is superior to feedback on the quality of public policies, ?privatizing? public decisions might improve their quality. However, the quality of feedback depends upon the nature (...) of the good, not who provides it; and the absence of reliable feedback on a good may actually justify government involvement, to correct information asymmetries. More fundamentally, voter ignorance of policy issues is a problem only if we assume that the point of democracy is to secure voter control of policy. Max Weber, however, advocated democracy as the best available mechanism for securing strong and responsible leadership. (shrink)

Abstract The classical case for market society appeals to the complementary goods of economic liberty and maximum wealth. A market society overgrown with economic firms, however, partly sacrifices liberty for the sake of wealth. This point was accepted by prewar, theorists of the economic firm, such as Frank Knight and Ronald Coase, and the attempt to moderate, or compensate for, the constriction of economic liberty was a central struggle of the Progressive Era. Since World War II, however, neoclassical economists have (...) tried to assimilate the firm to the theory of market exchange. Because they have failed, issues of authority and control have recently reassumed their place at the center of the theory of the firm. (shrink)

Around the time of World War II, just as the American state was acquiring new levels of capacity for autonomous action, the state was dropped from American social science, as part of the reaction to the rise of totalitarianism. All traces of state autonomy, now understood as “state coercion,” were expunged from the image of American democracy. In this ideological climate, the “society‐centered” frameworks of pluralism and structural‐functionalism that Skocpol criticizes swept the field. Skocpol's call for a return to a (...) Weberian understanding of the (potential) autonomy of government administrators may be complemented by a Weberian understanding of the (potential) autonomy of democratic leaders. (shrink)

In multiethnic and multi-religious democracies, the chronic danger is that candidates will engage in “identity politics,” appealing to one locally preponderant ethnic group against other groups. The usual formulas for composing multiethnic democracies—ethnic federalism and/or proportional representation—often exacerbate the problem, ethnicizing political campaigns and carving up the national legislature into ethnic blocs, each beholden only to its own group. An alternative approach—what I call “dispersed constituency democracy”—is to match each legislative seat with a constituency that reflects the overall ethnic composition (...) of the society in question, so as to encourage candidates to reach across ethnic divisions rather than play to locally preponderant ones. I propose a simple way to do this, and explore the likely consequences for national electoral campaigns and legislative dynamics over a range of demographic circumstances. I also consider supplemental devices for protecting minority rights that would be made possible by the proposed constituency system. (shrink)