The Chartered Corporation as Governance Technology: Colonial Empire, Constitutional State, and Business Firm

In reaction against “totalitarianism” in the 1930s, a narrative was established that attributes the “rise of the West” to the growth of individualism—religious, political, legal, and economic. However, it is not individuation, but organization, that generates capacity for action, or power. And when we consider leading markers of the rise of Europe—including the growth of towns, universities, religious orders, and trading companies—what we find is not individualism per se, but individuals organized in corporate and quasi-corporate forms. This lecture focuses on three such corporately organized social formations—colonial empires, constitutional states, and business firms. Incorporation is a device for delegating authority from a sovereign or semi-sovereign to a legally subordinate (but operationally independent) government—the government of a university, town, or firm, for example. It is not a business technology, but a governance technology, with for-profit enterprise not its first, but its last major area of application. England used corporations to build and govern its first empire, in contrast to the state-led empires of Spain, Portugal, and France. This effort generated two new corporate forms. The world’s first modern (shareholder-dominated) business corporation—the East India Company—was developed as an instrument of empire in Asia. Meanwhile, modern constitutionalism was the ultimate fruit of England extending its corporate empire to North America. The New England colonies were literal corporations of the Crown, with governments established by and limited by a corporate charter. When the Americans broke with Britain, they held on to the practice of limiting their governments by corporate charter, but they substituted the People for the King as the chartering sovereign. Modern constitutions, it can be said, are popularly issued corporate charters, and modern constitutional governments are a form of corporate government. Ironically, this new form of constitutionalism contributed to the subsequent reinterpretation of business corporations as wholly private associations, with consequences ranging from the extension of constitutional rights to corporations, to the rise of neoliberalism