The Enterprise Entity and the Constitution of the American Economic Republic

Accounting, Economics and Law: A Convivivum, 'Corporations and the U.S. Constitution: Perspectives on Citizens United and its Aftermath', Vol. 1, No. 3, 2011

Posted: 22 Dec 2011 Last revised: 23 Dec 2011

See all articles by Yuri Biondi

Yuri Biondi

French National Center for Scientific Research (CNRS)

Date Written: December 17, 2011

Abstract

Both Citizens United and the recent debate on opinions provided by rating agencies amid the financial crisis face the problems raised by defining the corporation as a legal person and a legal subject. In contrast, the enterprise entity perspective considers the corporation as an intermediate collective body and a legal object, granted with instrumental legal personality in some circumstances. The legal person view has been historically important to articulate private and public orders, and protect the private domain from abuse of public power. At the same time, it was and still is important to impose some social control and social duties towards the community on enterprise entities, especially in a world where corporations are allowed to own and control other corporations, constituting corporate groups that are autonomous and opaque fields of private power. From this perspective, the definition and role of enterprise entities point to the constitution of legal-economic orders. Drawing upon Dewey’s suggestion, the corporation can be defined as a functional set of mutual relations that has social consequences, controlled and modified by being the bearing of rights and obligations, privileges and immunities. This understanding embeds the corporation in its social context fraught with immanent conflicts of interest and representation. In this context, the enterprise entity emerges as an overarching principle (and idea) that can foster the unfolding formation of transient social orders. Here the quest for legal-economic principles becomes unavoidable. Like the corporation, these principles acquire duties and rights. They have the right to be tentatively free, which implies two distinctive duties: they are responsible towards reality, because they are expected to guide human actions in situation; and they are responsible towards society, because they are expected to facilitate welfare and justice and liberty in ordering social activities.

Keywords: corporation, legal fiction, legal person, real entity, constitutional rights, free speech, Citizens United, rating agencies

JEL Classification: K10, K22, l50, l20

Suggested Citation

Biondi, Yuri, The Enterprise Entity and the Constitution of the American Economic Republic (December 17, 2011). Accounting, Economics and Law: A Convivivum, 'Corporations and the U.S. Constitution: Perspectives on Citizens United and its Aftermath', Vol. 1, No. 3, 2011. Available at SSRN: https://ssrn.com/abstract=1975640

Yuri Biondi (Contact Author)

French National Center for Scientific Research (CNRS) ( email )

IRISSO - University Paris Dauphine PSL
Place Marechal Lattre Tassigny
75016 Paris
France

HOME PAGE: http://yuri.biondi.free.fr/

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