At first glance, Lenore Palladino’s Good Company looks like a policy manual and a rhetorical political strategy. As a policy manual, it gives advice for Biden-era staffers committed to “producerism,” a nostalgic industrial policy envisioning an active role for the federal government in rehabilitating, growing, and reshaping a national economy. As a rhetorical strategy, it clarifies for a public audience both the danger and artificiality of our ideological and legal commitments to shareholder value. Rather than retain corporate earnings to build more factories and hire more workers, corporate directors today spend corporate money to buy back shares from the public market, manipulating prices while getting rich themselves. Many of the book’s later chapters, in particular, consist of detailed policy prescriptions aimed at making business corporations more productive and less extractive. While these prescriptions will undoubtedly interest policy wonks, they also demonstrate how political science and political theory might be brought usefully to bear upon an ostensibly economic phenomenon. What also makes Good Company a worthwhile read is its painstaking but accessible deconstruction, and subsequent reconstruction, of what the corporation is, what it does, and which ends it serves.

The first half of Good Company sets forth a swift economic, political and intellectual history of the business corporation, notable in its centering of labor’s importance in production while demonstrating the contingent and mainly destructive role played by equity. Populating her narrative with clarifying case studies, Palladino shows how shareholders’ voices were once muffled by the dispersion of stock ownership and the expert managerialism of the post-war years. These years were characterized by innovation, growth, stability, wealth equality, and growing unionization. This is the corporation of Joseph Schumpeter’s Capitalism, Socialism and Democracy (1942) — behind the bulwark of imperfect markets, expert managers and workers found breathing space to grow and innovate. This too is the corporation of James K. Galbraith’s New Industrial State (1967), one where the power of capital is counterbalanced by the power of labor and the power of the administrative state. It is also the corporation, explains Palladino, of economists John R. Commons and Thorstein Veblen, who saw organizations of human beings working cooperatively and creatively together, finding ways to mediate their disputes while making more of the sum of their parts.

Now, thanks to macroeconomic and political change, shareholders are instead represented by powerful asset managers that aggregate their wealth and their votes. Armed with resources and influence they haven’t enjoyed since the money trusts of the House of Morgan, stockholders have usurped the corporation’s traditional decision-making bodies. Boeing executives do not retain earnings so they can invest in the development of safer and more efficient passenger airplanes. They instead spend billions of dollars on share buy-backs to juke stock prices for the benefit of BlackRock and Vanguard.

As Palladino explains, this drastic industrial and financial change away from production and into rent-seeking extraction received effective intellectual and political cover. New neoclassical economic theories rationalized shareholders’ increasing influence in terms of efficiency and the (mis)application of agency law. Meanwhile, ordinary workers were co-opted into participating in their own exploitation through the proliferation of 401(k)s and mutual funds. We are all now “forced capitalists,” as the Hon. Leo E. Strine, Jr., once the preeminent jurist on the U.S.’s preeminent business court, put it in a 2007 article for the Journal of Corporate Law. The result is growing inequality, decreasing innovation, and a system of “investment” in which society’s wealth flows into secondary markets that have very little to do with providing companies the resources they need to thrive. The story told by Palladino is similar to the one told by Giovanni Arrighi in his 2010 Verso book, Long Twentieth Century: one of the rise, decline, and financialization of empire.

While this genealogy alone is sufficiently generative, Palladino’s policy prescriptions are ripe with information and arguments that will undoubtedly inspire political theorists and political scientists. Neoclassical economists and political theorists typically black-box the firm, characterizing it as a nexus of contracts, a repository of inputs, or abstract social categories. But corporate law scholars and institutional economists like Palladino cannot help but see the corporation as an inherently political creature. Governing the company requires the resolution of conflict, the representation and aggregation of interests, the creation and enforcement of decision-making procedures, and so on. For instance, in a chapter addressing the fiduciary duties of directors, Palladino advocates for a version of director decision-making that might benefit from political theories of trustee representation. In a chapter critiquing asset managers for their disfigurations of the popular (shareholder) will, Palladino shows how the study of the corporation might benefit from the expertise of those who study political parties and other preference-and interest-aggregating institutions. A chapter on works councils and employee board representation recalls Carol Pateman’s 1970 Cambridge University Press book on participatory democracy and Isabelle Ferreras’ more recent work on corporate bicamerialism, namely her 2017 book, Firms and Political Entities.

Throughout, Palladino proves that shareholders are no monolith; they are human beings in all their diversity. That their interests have been boiled down to extracting short-term hikes in the price of stock is a puzzle that political science is uniquely qualified to solve. Meanwhile, the book’s focus on the inherently human and productive nature of the corporation provides a needed intervention into political theory scholarship that, to this point, has studied only the corporation’s potential for domination and exploitation. Good Company, therefore, challenges theorists with a new question: is there a role for the business corporation in the vindication of human autonomy? Or can it only ever be an anti-liberal and anti-democratic villain?

Good Company is a policy book written by an economist, not a political theorist. Readers should, therefore, forgive its nostalgia for a better time once lost. Nor can they reasonably expect a full-throated normative theory of the corporation. Instead, the book is best read as a foundation for reimagining how human beings might relate to one other in a complex economy. To this end, readers should be aware of certain gaps and dilemmas the book presents and does not resolve. To start, Palladino’s argument seems to replace one just-so story with another, swapping out a neoliberal myth for a Marxist one. In the place of shareholder primacy, which “succeeded in making maximizing shareholder value seem like the immutable, eternal, obvious function of the modern business corporation” (p. 44), Palladino’s narrative suggests that, in the state of nature, the source of productivity is labor and, in particular, how it is organized. It is the ingenuity and commitment of laboring people, not that of diversified shareholders, which leads to productivity and innovation. To be sure, this tale may satisfy Marxists, but the book itself, aimed at policymakers and legal scholars, claims a Karl Polanyian pedigree. Throughout the book, the author insists that law creates the conditions not just for the corporation, but for capitalism itself. To then lean so heavily on a materialist explanation of social and economic outcomes leaves the political theorist struggling with a puzzling ambiguity.

For non-Marxists, centering the role of labor within corporate governance might have been better justified using a rights-based argument. This is not a terribly heavy lift. If corporations are productive and creative associations of human beings, as Palladino expertly explains in the first half of the book, then those human beings might claim for their organization a right to associational freedom. Indeed, Palladino’s history of the corporation and its regulation suggests a co-originality of both corporate autonomy rights and their democratic regulation. She succinctly depicts workers’ efforts to take positive control over not just working conditions, but also the purpose of their collaborative work. She celebrates investors’ attempts to wield their legal governance rights to ensure corporate decision-making reflects interests beyond the movement of prices on stock exchanges. And she illustrates the simultaneous efforts to limit corporate power in the interests of protecting everyone’s rights equally. Indeed, Palladino’s history seems tailored to encourage a discursive theory of corporate rights formation.

Yet the argument lands on a discordant note. It sets forth for the corporation a distinctly consequentialist end: that corporations, as public bodies, are meant to serve the public interest. This intellectual move is understandably common within progressive scholarship and jurisprudence addressing corporate rights. As Palladino convincingly articulates, a delusional ideology has been cultivated for decades: that market freedom consists of corporate freedom, that corporate freedom consists of shareholder freedom, and that shareholder freedom consists of share price maximization. Constructing an accessible offramp from this slippery slope is a smart rhetorical strategy.

Yet characterizing the corporation as a public entity carries a troublesome normative implication. Namely, it inadvertently provides theoretical ballast to the kind of corporatism associated with authoritarian regimes – one that blends state and economic power. Without any articulation of corporate rights, characterizing the corporation as “public” suggests that the public (or some demagogue speaking for the public) can tell its corporations precisely what to do. Permitting the state broad discretion to regulate the company in the public interest must have seemed appealing during the Biden administration. Any Biden-era interventions into corporations’ internal affairs would likely remain consistent with the administration’s demonstrated commitment to progressive policies and the expansion of rights. But under Trump? Instead, theorists might make best use of Good Company by mining from it the knowledge necessary to design a truly democratic corporation – one that deserves the protections of liberal autonomy rights within constitutional democracy.