Confucianism and the Political Theory of the Business Corporation

• In Event: Comparative Political Theory: Perspectives from Chinese Philosophy

Abstract

Despite the burgeoning literature in Confucian political theory, there has been little effort devoted to the exploration of the implications of Confucianism to economic justice. Among the few exceptions, Chan (2013) argues that Confucianism would require a sufficientarian, yet inegalitarian, distributions of economic resources; Kim (2019) suggests that Confucianism rejects both dogmatic egalitarianism and economic meritocracy, while aiming at a political economy of harmony where a bundle of considerations, such as merit, need, equality, and so on), could have their own place.

Nonetheless, whether Confucianism could sufficiently inform modern economic arrangements depends, as I will argue in the paper, on whether it could develop a satisfactory account of the business corporation. Ferreras (2017, p.15), for example, has shown us that multinational corporations “enact their own rules, engage in social dumping, and shop around for the legal systems that suit their ends” and they are political institutions with their “own patterns of dominance that has great impact both in the lives of those directly involved in it”.

The paper makes three general claims. First, it argues that much of the contemporary Confucian political theory literature that tackles problems of economic justice rests on an implicit “Chicago theory of the firm”, which perceives the economic firm as a nexus of individual contracts within the private sphere. To Confucian political theorists, this implies that the government could regulate the business corporation, but the rules governing the firm, because of its private nature, need to be different from political rules governing the polity. Second, I argue that contemporary Confucian political theory will need to draw on the recent literature on the “political turn” of the Corporation (Ciepley, 2013) to fully understand the public and political nature of the business corporation. In particular, business corporations are legal persons that enjoy legal privileges granted by the state, such as limited liability, asset lock-in, and so on. These are legal privileges that actively suspend normal contractual responsibilities for the sake of efficient capital accumulation. Thus, according to the political turn, the corporation is a legal device that the government employed to achieve public goals and purposes, and that is why they are “chartered”. The third claim that this paper aims to make is that, the political theory of the firm could provide a better normative foundation, than the Chicago theory of the firm” to fully unleash the potential of Confucian political theory to address global problems associating with the business corporation.

References
Chan, J. (2013). Confucian perfectionism: A political philosophy for modern times. Princeton, NJ: Princeton University Press.

Ciepley, D. (2013). Beyond public and private: Toward a political theory of the corporation. American Political Science Review, 107(1), 139-158.

Ferreras, I. (2017). Firm as political entities: Saving democracy through economic bicameralism. Cambridge: Cambridge University Press.

Kim, S. (2019). The political economy of Confucian harmony: A Xunzian vision. American Journal of Economics and Sociology, 78(2), 493-521.

Author

• Chi Kwok, Lingnan University