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.These threeaspects of property and property rights are the legislated right of corpora-tions to own stock in other corporations, the reduction of personal owner-ship liabilities, and the legal powers vested in the boards of directors, all ofwhich varied from one state to another and affected the degree and form ofbusinesses incorporating there.Variation among economically similarstates in these important facets of corporate law suggests that corporate lawwas shaped by contingent political factors rather than by adaptation to eco-nomic forces.This chapter is about the effect of corporate laws in variousstates, not the reasons why they were passed: law is the independent vari-able.Although the laws were influenced by both structural and economicchanges and by self-conscious actions of capitalists, their adoption cannotbe reduced to structural or instrumental forces.That is, the laws cannot beexplained as the process of a systemic adaptation of the law to exogenouseconomic change.If so, they would have been much more similar in variousstates than they were.Theoretically the legal underpinning of the corporation is important fortwo issues, the institutionalization of the corporate form and the ways inwhich corporate property contributed to the process of formation of thecapitalist class.Institutional theory emphasizes that the socially constructedsense of recurring social relations being  real is a fundamental basis forthe reproduction of those social relations with a minimum of ongoing exer-cise of power or self-conscious activity to sustain them (Meyer and Rowan1977; Zucker 1977; DiMaggio and Powell 1991).When a set of relationsor a way of organizing activity, such as a school, government, company,union, or voluntary association, becomes defined as a  thing, actors willtend to act according to the definition of that  thing. Students come toclass, employers negotiate with unionized workers, or aggrieved citizensform lobbies to get the ear of legislators.The fewer alternative  things thatS T A T U T O R Y C O R P O R A T E L A W 145the institutional environment offers, the more constrained actors are in se-lecting how to organize activities.When the corporation becomes the onlyinstitutionalized way outside the state to organize large-scale economic ac-tivity, it will be adopted whether or not it is the most efficient of all poten-tial arrangements.The state, through the activity of the law, becomes one ofthe fundamental determinants of what social relations and activities becomedefined as real (Coleman 1974; Jepperson and Meyer 1991).The modern industrial corporation, to a greater extent than other formsof ownership, is a creature of the law.The law defines the rights, entitle-ments, and responsibilities of all forms of property, but it has little juris-diction over the very existence of entrepreneurships and partnerships.Individuals and partners can form simple companies on their own, but acorporation does not exist unless the state says so.Legal treatises and soci-ologists have characterized the corporation as a  legal fiction that has no2existence without a charter from the state.As discussed in earlier chapters, property is a social relationship enforcedby the state, creating a set of entitlements to goods and services and definingthe different obligations and rights that people have to one another in rela-tion to those goods and services.Property gives some people the right to useobjects or to enter into contracts with others concerning the use of thoseobjects or to decide how anything produced in the use of those objects willbe disposed of.It also creates obligations and liabilities concerning the useof those objects if debts are incurred or people are injured by those objects.The exact nature of the rights, entitlements, obligations, and liabilities in-volved in property relations are defined and enforced by the state.It is thestate that ultimately defines whether an economic system is capitalist, so-cialist, or communist, at least in the modern era.That is why revolutionar-ies who aim to create a new economic system generally target state power.As Polanyi (1957) has described and as the regimes of the former Sovietbloc have demonstrated, markets no less than state ownership are createdand sustained by states.Thus any analysis of the rise of corporate capital-ism must address the role of the law.Corporate law contributed to creating the corporate form of property intwo ways: by giving the corporation rights and entitlements not availableto individuals or individually owned businesses and by solidifying insti-tutional relations among corporations that are specific to the corporatesystem such as the stock market, investment banks, and interlocking direc-torships that structured the socialization of capital and of authority.1.Giving the corporation powers not available to individuals or individ-ually owned businesses.Because early corporations were created by govern-ments to accomplish socially beneficial tasks like building canals, railroads,roads, and settlements, they were given special privileges, including legalmonopolies, the right of eminent domain, and free land [ Pobierz całość w formacie PDF ]