Little Republics: Authority and the Political Nature of the Firm

Business corporations, we often hear, are political entities akin to the state in many respects, including their revenue, workforce, influence, and internal powers. One implication of this view is that if the relation of employee to firm is akin to that of subject to state, then the theory of the firm as a nexus of purely private, authority-free contracts may err. Another implication is that corporate authority may then be, absent accountability to its subjects, as objectionable as unaccountable state powers, such as those that autocracies wield. And considerations favoring democracy in the state may likewise apply to the workplace. Efforts to model the normative standing of the firm on that of the state are not new. Yet it has not been until recent years that a complete political theory of the firm has been attempted - a view that is germane to recent analyses of managerial authority as a form of public authority, to calls for workplace democratization based on the firm/state analogy, to republican approaches to the firm, and to claims that corporate law be subsumed within the scope of public law. For all its relevance for the parallel to hold true, however, these analyses rarely inspect the nature of corporate and state authority-understood, as I here will understand it, in its empirical or de factor, rather than its moral, sense: as the ability to issue commands whose content is generally, if not exceptionlessly, conformed to.