The Modern Corporation: Private Agent OrPublic Actor?

"[T]heories about 'what corporations are,'" writes Professor David Millon, "influence thinking about how the law should treat corporate activity."(1) What, then, are corporations? Millon, reviewing the history of how corporations have been understood in America since the nineteenth century, outlines three areas of definitional contention: (1) the corporation as an entity versus the corporation as simply the aggregate of its particular parts; (2) the corporation as an artificial creation of state legislation versus the corporation as a natural product of human activity; and (3) the corporation as a private body versus the corporation as a public entity charged with public duties.Because there has never been agreement in this country over what corporations are, skepticism over any assertion that they must--by nature, the laws of God, tradition, or the dynamics of organizational activity--be any one thing is appropriate. Even if the nature of corporations has always been contested, the range of disagreement is not quite as broad as Professor Millon argues. His three categories are all, to one degree or another, reducible to the private body/public entity distinction. To speak of the corporation as an entity or an aggregate is simply another way of asking whether it is public or private. By dividing the corporation into its units, proponents of the aggregate view are making a claim that such units act as individuals and therefore ought to be treated as private agents. Proponents of the entity theory argue that large-scale organizations, precisely because they take on a life of their own, are charged with public functions. Similarly, the debate over the artificiality or naturalness of the corporation is also a debate over the private and the public. If the corporation is created by a state legislature, it has a public origin and therefore can be regulated by the state, but if a corporation is the natural product of individuals, it remains private. In other words, while there will always be debate on what the corporation is, that debate, for a considerable period of time, has revolved around one fundamental issue: is the corporation private or public?If this is the key question, it is also an awkward question. A number of contemporary intellectual developments, most prominently the rise of feminist theory, have brought into question the whole notion that one can make a distinction between the public and the private.(2) Concerned that the public/private distinction reinforces the powerlessness of women by consigning domestic work t6 the presumably less valued "private" sector, feminists have shown that families serve public functions and assume public responsibilities. Given this type of criticism, it is not surprising that some writers find the public/private distinction increasingly obsolete, one more nail in the intellectual bankruptcy of contemporary liberalism.(3) Recognizing such criticism, Professor Millon insists that his use of the public/private distinction is not based on the notion that the distinction is valuable; it is instead a reflection of how the distinction has been used in legitimating the corporation.(4)Yet Millon is not quite accurate, for he not only uses the public/private distinction, he celebrates it. In his comments on Chancellor Allen's decision in Paramount Communications, Inc. v. Time, Inc., Millon points out that "[r]ead generously, Time implies that all corporate law must take into account its public dimension, and thus corporate law is public law."(5) If Millon is somewhat ambivalent about whether the public/private distinction should be criticized or used, he is not alone. Many feminists who question the public/private distinction nonetheless are willing to use it to defend the right to abortion, for example, which, significantly enough, has been based not on the notion of women's equality, but rather on the notion of a generalized right to privacy.(6) In similar fashion, AIDS activists argue for a stronger public commitment to AIDS research and treatment, even while claiming that legislatures and judges should respect the privacy associated with sexual conduct. …