Politics and the Business Corporation

This essay explores the policy bases for, and the political economy of, the law\u27s long-standing regulation of corporate political speech. The essay has three parts. First, it contends that the conventional justifications for regulating corporate interventions in politics - that corporate donations unnaturally skew the political discourse (bad politics) and that corporate political donations harm shareholders (agency costs) - assume irrational investors and substantial capital market inefficiency. Drawing on public choice theory, the essay also explores the aim of retarding rent-seeking as an alternative justification for regulating corporate interventions in politics. Second, the essay reexamines the history of the regulation of corporate political speech and suggests a political economy analysis whereby corporations favored limitations on corporate donations in order to obtain protection from rent extraction by politicians. Finally, the essay explores the implications of this analysis for the modern regulation of corporate political donations

Corporate Political Speech, Political Extortion, and the Competition for Corporate Charters

This article explores the policy bases for, and the political economy of, the law\u27s long-standing discrimination against corporate political speech. This Article also explores the relevance of state law regulation of corporate political speech to the competition between the states for corporate charters. In the process, implications for the current political debate over soft money and the current academic debates over enacting an optional federal corporate takeover law regime and creating a securities law regulatory competition are noted. The underlying aim of this Article is to bring to bear on the relevant policy debates a shift in focus from the shareholder/manager agency relationship to the agency relationship between lawmakers and society. The Article draws on the contractarian view of the firm, the economic theory of regulation, and the study of public choice

Corporate Political Speech, Political Extortion, and the Competition for Corporate Charters

This article explores the policy bases for, and the political economy of, the law\u27s long-standing discrimination against corporate political speech. This Article also explores the relevance of state law regulation of corporate political speech to the competition between the states for corporate charters. In the process, implications for the current political debate over soft money and the current academic debates over enacting an optional federal corporate takeover law regime and creating a securities law regulatory competition are noted. The underlying aim of this Article is to bring to bear on the relevant policy debates a shift in focus from the shareholder/manager agency relationship to the agency relationship between lawmakers and society. The Article draws on the contractarian view of the firm, the economic theory of regulation, and the study of public choice

Corporate Political Speech, Political Extortion, and the Competition for Corporate Charters

This Article explores the policy bases for, and the political economy of, the law\u27s longstanding discrimination against corporate political speech. This Article also explores the relevance of state law regulation of corporate political speech to the competition between the states for corporate charters. The underlying aim of this Article is to bring to bear on the relevant policy debates a shift in focus from the shareholder/manager agency relationship to the agency relationship between lawmakers and society. The Article draws on the contractarian view of the firm, the economic theory of regulation, and the study of public choice

The Lurking Rule Against Accumulations of Income

The Rule Against Perpetuities is dying an ignoble death. To attract trust business and the lawyers\u27 fees and trustees\u27 commissions that come with it, twenty states have abolished the Rule as applied to interests in trust. But the Rule Against Perpetuities is not the only rule of property law that bears on trust duration. Another is the rule against accumulations of income, which limits the timeframe during which a settlor may direct the trustee to accumulate and retain income in trust. For 200 years, the rule against accumulations of income has lurked in the shadow of its older and more distinguished cousin, the Rule Against Perpetuities. But with the race to abolish the Rule Against Perpetuities, the rule against accumulations of income may have newfound relevance. Perpetual trusts are more likely than ordinary trusts to involve accumulations of income in trust. Accordingly, the task for this short essay is to examine the lurking rule against accumulations of income and its potential impact on the $100 billion perpetual trust industry

Trust as "Uncorporation": A Research Agenda

Trust has long been a competitor of corporation as a form of business organization. Though corporation today dominates trust for operating enterprises, trust dominates corporation in certain specialized niches. The market value of these niches measures in the trillions of dollars. Yet the modern business trust has only recently begun to be subjected to scholarly inquiry. Accordingly, this essay outlines a research agenda for the study of the trust in particular, the modern statutory business trust— as a form of business organization. Put into the parlance of the conference on which this symposium issue is based, this essay is a call for re-search on the business trust as “uncorporation.

Politics and the Business Corporation

This essay explores the policy bases for, and the political economy of, the law\u27s long-standing regulation of corporate political speech. The essay has three parts. First, it contends that the conventional justifications for regulating corporate interventions in politics -- that corporate donations unnaturally skew the political discourse (bad politics) and that corporate political donations harm shareholders (agency costs) -- assume irrational investors and substantial capital market inefficiency. Drawing on public choice theory, the essay also explores the aim of retarding rent-seeking as an alternative justification for regulating corporate interventions in politics. Second, the essay reexamines the history of the regulation of corporate political speech and suggests a political economy analysis whereby corporations favored limitations on corporate donations in order to obtain protection from rent extraction by politicians. Finally, the essay explores the implications of this analysis for the modern regulation of corporate political donations

Trust Law, Corporate Law, and Capital Market Efficiency

In both the publicly-traded corporation and the private donative trust a crucial task is to minimize the agency costs that arise from the separation of risk-bearing and manage-ment. But where the law of corporate governance evolved in the shadow of capital- market checks on agency costs, trust governance did not. Thus, even more than that of close corporations, the law and study of private trusts offers an illuminating counterfac-tual—a control, as it were—for a playful thought experiment about the importance of capital market efficiency to the law and study of public corporations. The animating idea for this essay is that many of the differences on the agency costs frontier between the public corporation and the private donative trust can be roughly attributed to their relative positions in modern capital markets and the related disparity in their residual claimants’ ease of exit. Among other things, this approach reveals a correlation between the trust law model and the views of corporate law scholars who doubt the ECMH and its implica-tions for corporate governance. The essay also discusses the use of market data for as- sessing breach and damages in corporate and trust litigation and for empirical evaluation of theoretical scholarly analysis in both fields. More generally, comparison of the gov-ernance of the public corporation and the private donative trust brings into view the im-portance of relative price efficiency for the modern approach to corporate governance