Corporate Law, Antitrust, and the History of Democratic Control of the Balance of Power

Abstract

Since their creation, corporations have proven to be vehicles for incredible aggregate wealth creation. From the creation of the Bank of England to the empire-building of the East India Company, the company form was harnessed as a tool for the expansion of public life.  It was, however, recognised at the outset that in creating a unique set of legal features that would make the company so attractive for private investment, the state was not only creating its own co-investor in public wealth but there was also the possibility that the company would pose a threat to the state itself through its ability to channel and multiply the accumulation of private power.  As such, since its inception, the corporation has been involved in a delicate dance with the state both to route its productive capacity towards socially desirable ends and to control the corporation’s power. Today, as technological development and the mobilisation of international financial capital allow the power of the corporation to transcend that of the democratic state in both scale and scope, the tools of the past that were used with varying degrees of vigour to constrain the corporation are increasingly relevant. Corporate law and antitrust were once used to maintain the balance between the power of the corporation and the power of the state. Today, this vital role has been all but forgotten.  The now-separate conversations about corporate responsibility in the corporate governance sphere and about corporate power within competition policy circles have always, in fact, been fundamentally connected and targeted at the same set of risks.  The balance of power will continue to swing in favour of the corporation unless there is a mechanism for counterbalance. The roles of antitrust law and corporate law in embedding the corporation in society must be re-established.

Keywords: antitrust, competition law, corporate law