Corporate law and the rhetoric of choice

• Pages: 61-89
• Published date: 19 May 2009
• DOI: https://doi.org/10.1108/S0193-5895(2009)0000024008
• Date: 19 May 2009
• Author: Kent Greenfield

CORPORATE LAW AND THE

RHETORIC OF CHOICE

Kent Greenfield

ABSTRACT

Rhetorically, the notionof choice has always been a powerful one in politics

and law. This chapter is intended to offer a note of caution about its use.

Despite its progressive hue of individual freedom, the rhetoric of choice

increasingly tends to be a notion used to defend and uphold existing

matrices of economic and social power. This is because the rhetoric of

choice is an excellent way to support existing power relationships. The

assertion that people acting within such power relationships are simply

choosing their current situation undermines efforts to change those

relationships. The powerful stay powerful; the weak stay weak. This is

true in a number of areas, from discussions about school vouchers, to

debates about tort reform, to the disagreements surrounding the regulation

of pornography.

The dependence on choice rhetoric also exists in corporate law, where

the school of thought currently dominant in corporate law doctrine holds

that the corporation is best seen as a voluntary arrangement among all the

various stakeholders of the corporation. The rhetoric of choice is thus a

powerful tool to fight against any reform of current relationships within

the corporation that would embolden and empower stakeholders

Law & Economics: Toward Social Justice

Research in Law and Economics: A Journal of Policy, Volume 24, 61–89

Copyright r2009 by Emerald Group Publishing Limited

All rights of reproduction in any form reserved

ISSN: 0193-5895/doi:10.1108/S0193-5895(2009)0000024008

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traditionally left out of the corporate power structure. Those involved with

the corporation, whether shareholders, employees, or communities, have

chosen their position, and thus should not complain when they do not

receive more than what they explicitly contracted to receive. In this way,

the notion of choice is used to bolster a view of corporate law that protects

those already within the corporate power structure and excludes

important stakeholders from corporate decision making. The rhetoric of

choice is used in the same way in corporate law discourse as it is used

elsewhere by the right – to justify or bolster existing matrices of economic

and social power.

1. INTRODUCTION

For progressives, a dedication to liberty has often meant a respect for, and

protection of, individuals’ right to make choices for themselves. When one

hears about ‘‘the right to choose,’’ the progressive fight to protect a woman’s

right to an abortion is the example that will leap most quickly to mind, but

the concept of choice is broader. Choice has also been an important theme

in progressive struggles against poverty as well as discrimination on the

basis of race, sex, and sexual orientation. Women deserve the choice as to

whether to terminate pregnancy; poor people should be given greater

opportunities, and thus more choices, in their lives. Race-based animus, like

animus based on sex or sexual orientation, is wrong in part because it limits

the choices of the victims of such discrimination.

Historically, the respect for individual choice has been a significant, if not

essential, part of modernity, a part of history’s march from feudalism’s

dependence on status to modernity’s dependence on contract (Coquillette,

2004).

1

It is a part of – perhaps the most crucial aspectof – modernity’s respect

for the autonomy and dignity of the individual (cf. Nozick, 1974). Choice is a

powerful notion not only in legal and political theory but in political practice

as well. Simply framing a political issue asan issue of choice is a very powerful

and successful persuasive technique, especially in the United States.

Rhetorically, choice has always been a powerful notion in politics and

law. This chapter is intended to offer a note of caution about its use. Despite

its progressive hue of individual freedom, choice tends (perhaps increas-

ingly) to be a notion used to defend and uphold existing matrices of

economic and social power. This is true in a number of doctrinal areas, but

especially so in corporate law, where the idea of choice is the defining

principle of that slice of mainstream corporate law doctrine and scholarship

KENT GREENFIELD62