The American Corporation

The United States from its earliest years led the world in making the corporate form of business organization widely available to entrepreneurs. Starting in the 1790s, corporations became key institutions of the American economy, contributing greatly to its remarkable growth. This essay reviews the evolution of corporations across several eras of the country's history. The most recent era is marked by a shift away from a stakeholder view of corporate interests and purposes to one dominated by profit and shareholder-value maximization. We strongly question whether this shift has been beneficial to the country as a whole. If our assessment is correct, there is a need to find ways of inducing corporations to act in ways that produce better societal outcomes. We therefore explore ways - including some suggested by the history of U.S. corporations - in which corporate interests and the public interest might become better aligned.