Corporations, Society, and the Public Good

(3 Credits)

The dominant model of economic activity at the enterprise level is one where governance rights (who makes the decisions) and economic rights (who reaps the value created by the enterprise) are concentrated in the hands of outside investors that have capitalized the company through equity stakes. While this model has led to tremendous economic growth, it has also contributed to structural issues, such as the concentration of wealth and power, the prioritization of profits at the expense of other goals, the externalization of environmental costs, and the treatment of workers as a liability rather than an asset. Alternative forms of structuring economic activity have long been present, from consumer cooperatives to nonprofit enterprises. As crises mount – some exacerbated by the primacy of shareholders – there is growing emphasis on the need for these alternatives, and examples are proliferating and becoming more familiar, from Patagonia to Bosch to Novo Nordisk. Looking at why enterprises are organized in a certain way provides a lens through which to explore who ought to have a say over productive activity and how the economic value created should be allocated. The course begins with a critical examination of the prevailing enterprise model and its shortcomings in duly addressing social, economic, and environmental challenges (or, indeed, its contribution thereto). We then introduce the broad set of alternative structures that eschew shareholder primacy to prioritize non-shareholder centric goals (ensuring long-term purpose, equitable wealth distribution, and economic democracy, among others). We then explore and critically analyze worker-centric, stakeholder-centric, purpose-centric models, and hybrid approaches, focusing on their features, benefits, and limitations through real-world examples. Through a combination of readings, lectures, class discussion, and applied assignments, the course aims to demystify and normalize the models and equip students with the conceptual frameworks and practical understanding needed to evaluate, design, and implement them. When is a departure from the dominant model warranted? Why, if these models are socially preferable, are they not adopted more widely? By the end of the course, students will have developed a thorough and critical understanding of the alternative ownership landscape and its potential to address systemic challenges, as well as a perspective on feasibility, trade-offs, and long-term implications.