The Mondragon Experiment
By Greg MacLeod | April 4, 2009 | 10:28 PM
The concept of the corporation reaches back to Roman times. However, the modern business corporation evolved radically from its ancient roots into a form with little relation to the purpose as understood by historians of law. Today, the typical business corporation seems to be a disjointed entity whereby shareholders seek maximum income, labor unions seek maximum income, and managers vie for maximum salaries and bonuses. The needs of society in general seem to be ignored in this dynamic. Indeed, the formula appears to point in a direction that can only lead to trouble for those outside the three competing elements of the modern business corporation; the recent economic meltdown would appear to confirm the deep faults in the current concept of the business corporation. Many qualified researchers from Berle and Means in California (1931) to LCB Gower in London (1954) to Naomi Klein in Toronto (2007) have warned us that large business corporations are beyond the control of any government and have become a threat to world society itself. Gower, for example, a highly respected historian of company law, argues that the law always lags behind reality and is in need of constant reform to address contemporary problems. In this article I begin from this claim and I propose what I call an older, more traditional notion of the corporation. Conceptualizing a Corporation
According to Gower, a corporation is not simply a “thing” like a building that belongs to someone. It is a group of people associated in a common purpose to achieve an agreed upon goal. John Davis, another legal historian, notes that the precursor of the business corporation was the first monastery established in the sixth century, the purpose of which was to serve society. Most business corporations before 1900 developed in Britain, where they were established...