The Neoliberal Corporation

Abstract

The neoliberal corporation is a novel theoretical and organizational construct that treats the pecuniary interests of shareholders as the sole end of the corporation and gears corporate governance toward maximizing shareholder returns against the assumed opportunism of managers and workers. This construct originated in the post-war neoliberal effort to revive free market principles, which the rise of the monopolistic corporation appeared to have rendered obsolete. First, neoliberals declared the problem of monopoly a non-problem. Then, to marketize the corporation, they cast it as a glorified private partnership. Finally, they applied to it a game theoretic version of agency theory, with the shareholders as the “principal” and management (and workers) as their opportunistic agent. This chapter critiques both the descriptive cogency of this account and its practical consequences, which include exploding executive pay, short-termism, institutionalized irresponsibility, worker surveillance and coercion, and vampire management focused on value extraction rather than value creation.