This Article describes the transformations underwent by the corporate form from its Roman origins to the present. It shows that every time there was a shift in the role of the corporation, three theories of the corporation (the aggregate, artificial, and real entity theories) were brought forward in cyclical fashion. However, every time the real entity theory prevailed, and it is the dominant theory during periods of stability in the relationship between the corporation, the shareholders, and the state. The article describes this evolution in detail, and then attempts to derive normative consequences for the legitimacy of corporate social responsibility (CSR). The basic argument is that under the real view, which is historically the dominant view of the corporation, CSR is normatively acceptable even when it does not contribute to the long-run welfare of the shareholders.


Business Organizations Law | Law and Economics | Legal History

Date of this Version

February 2005