Professor Bainbridge...on law, politics, religion, culture & food

Is it just me, or does it seem a bit odd “to eliminate most of the economic analysis” from a book on “Corporation Law and Economics”?

Hi Prof. Bainbridge,
I love your text, but it does have a particular slate that is your own.  The main slant that I have a problem with is your claim that “you can only serve one master”.  You agree that shareholders are not owners, yet think that they should be put on a pedestal because of something the bible says.  Not only is this a little odd, but any father knows that they serve their wife, kids, mother, etc.  We are made to serve multiple constituents. The bottom line is that giving shareholders all the free cash flows on such a weak argument is immoral.

Jensen said recently that shareholders have no special position over other stakeholders.  I think it’s your turn to admit the same and re-write your text accordingly.  Adam Smith was for the labor theory of value and Mills said that if those who supply the cash get more than those that supply labor, the system is screwed.  Also, Mills said that if any association owns the means of productions, it’s socialism (i.e., he would say corps. are socialist institutions).

Finally, Drucker said corps should NOT have the goal of maximizing profit.  It should be more like an indicator of any going concerns problems.

I respect and admire your work and I hope this helps in the re-write.
Toby
PS I’d love a response.

Dear Stephen, I’ve used your book as a reference for the past couple of years and I find it invaluable. As a person with little background in economics I particularly like your introductory discussion of the role and uses of economics in law. I had intended on using your book as the text for my comparative corporate law class (which compares the US with Australia, Canada and the UK). The reason I chose not to was that (some) of your chapters are so long. My students pretty much refuse to read over about 30-40 pages per class.

My only suggestion for a new edition would be to reduce the size of your chapters and to not link your chapters so closely to your published papers. I found your veil piercing chapter was not that much shorter than your abolishing veil piercing paper.

I would advise against cutting down on the economic analysis of the book. I think that is it’s great strength. I would also not want to see you change your direct personal approach to writing. Even if this is idiosyncratic, it’s refreshing to see an opinion clearly argued in a text, and I’m sure it provides a useful launching point for class discussions.

Of course, being a text author myself I understand the pressures of the publishing market (and my impression is that the US publishing market offers a lot of choice) and my views only represent a very small number of sales.

I look forward to reading the new edition.

Jason