Patents are part and parcel with capitalist exploitation – legal novelties that prop up ethical purpose for corporations naturalize surveillance capitalism that underpins economic extraction

The obvious corporate theory platform that offered itself to accommodate environmental concerns was stakehoderism55; environmental protection was introduced as part of corporate social responsibility (CSR). So, environmentalist critique was initially a factor to be accounted for in the balancing of various interests when distributional decisions are made. This essentially positioned the environment against the main corporate stakeholders - managers, shareholders, workers, and to some extent the state – who were more interested in economic growth and, as described above, dominated the double-movement forces. In this way, environmentalism remained theoretically inside and practically outside the formulation of corporate purpose for a long time. Thus, even though the environment over the years tends to feature more and more in policy-making,56 as far as corporate decision-making is concerned, such concerns are either piecemeal or hypocritical. Indicatively, the Business Roundtable has recently “reversed” its corporate purpose statement, without law reform being necessary, by endorsing stakeholderism and including the commitment to “protect the environment by embracing sustainable practices” as part of CSR. 57 Nonetheless, it is difficult to imagine how a corporate board would ever make a decision to resolve the “growth vs environment” trade-off in favour of the latter. Therefore, Bebchuck and Bainbridge’s contention58 that this is mere window dressing and an effort to dilute board responsibility to shareholders is probably correct, though for different reasons to those these two scholars submit.

Environmentalism challenges the very core of capitalism by calling for the sacrifice of economic activity in terms of output growth to the extent it impacts on the environment. In other words, it signifies the insurmountable trade-off between economic growth based on resource extraction and the environment conditions required for humanity’s (and other life forms’) continuity.59 An attack on growth is too radical to be accommodated by capitalism to the extent the latter represents endless accumulation and therefore resource extraction and consumption without limits. Thus, corporate business has been trying to adapt its purpose in way that pays lip service to environmentalism through “greenwashing” practices, but that also exploits the public subsidization of the “green” economy as a unique business opportunity for more growth and material extraction. The clearest illustration of this government-sponsored hypocrisy is the International Energy Agency’s “electric vehicles initiative” which, instead advocating for expanding public transport, aims for the replacement of conventional cars with electric ones. This will at best have a questionable effect on emission reduction and a certain negative impact if materials extraction processes are also accounted for.60

Thus, for the first time in privatise corporate law’s history, corporate purpose is struggling to adapt to current social realities, and corporate practice has to resort to masquerading business opportunism by resorting to concepts such as “sustainable growth”, “green growth”, “Green New Deal”, “Green-tech”. These are unlikely to achieve some viable equilibrium in an intensifying “growth versus the environment” double-movement.61 Such largely government-sponsored opportunities have not remained unnoticed by investors either, who also seek to get their share of the profits to be made in subsidised initiatives for “greening” the economy. This move is symbolised by the gradual shift in corporate purpose implementation from voluntary CSR by managers to shareholder “imposed” ESG which is as voluntary as its predecessor is. 62

Certainly, there are also initiatives such as the B-Lab certification, the adoption of Benefit Corporation statutes or even social enterprise vehicles, such as the Low Profit Company (L3C) in the US or the Community Interest Company (CIC) in the UK, hope to internalise and reconcile the trade-off between profit and non-economic social goals. However, it has been documented that following B-Lab certification, corporate purpose tends to fall back to business as usual and the benefit corporation has had little traction.63 Similarly, the L3C has proven unable to reconcile the economy v. society trade-off and the CIC has been used to dismantle and privatise welfare state services under David Cameron’s failed “Big Society” programme.64 All this is not surprising, because as mentioned in the beginning of this chapter, these “new” structures do not offer something radically different to what was already possible under standard corporate law.

More recently, proposals for corporate law reform have begun to diverge from the usual enabling or market-based templates of the legislative initiatives mentioned above. In doing so, they have taken a more radical perspective which dares to tackle the core elements of the corporation, for instance by expanding shareholder liability in order to recalibrate the tripartite relationship between risk, externality, and liability. 65 Indeed, such reforms could help resolve the trade-off between output growth and the environment in favour of the latter. However, they are also likely to be stifled just because they are designed to do so. On the one hand, interfering with the essential elements of corporate law may reduce the corporation into a legal structure which is as unattractive (for business) as the L3C. This would at best result in “killing” the corporation by reform or, worse, in killing the reform due to the risk of regulatory arbitrage. More likely though is that radical reform would not reach the legislative stage in the first place for the same reasons that large corporations can neutralize inconvenient regulation outside corporate law.

Thus, largely in response to the ongoing mismatch between corporate purpose and social critique, environmentalism is currently taking a more radical turn and intensifying its stance by specifically targeting the core of capitalism, namely the desirability of economic growth per se. On the one hand, there is an expanding literature exploring the theoretical, practical and institutional requirements for a radical re-orientation of society away from infinite output growth, as proposed by the degrowth program and Raworth’s “doughnut economics”. 66 On the other hand, radical social experiments at grassroots level are already underway with considerable success,67 while activist environmental movements, such as Extinction Rebellion, proliferate and gain legitimacy, even if they were initially targeted as extremists. 68 We are beginning to see a fullyfledged double-movement process emerging between society and what is regarded as the economy, which for the first time constitutes a radical post-capitalist shift from mere distributional issues to non-economic, existential ones.69 This brings the discussion to its concluding query regarding the impact of this impossibility to re-purpose the corporation to reflect a social critique that is turning post-capitalist.

6. Conclusion: the Prospect of Corporate Law’s Expiration

To this point, this discussion has shown how, within an growth-oriented social context, corporate purpose has been able to adapt quite seamlessly by oscillating from shareholder primacy to managerial stakeholderism and back to shareholder primacy. This has been possible because corporate purpose has been able to “slide” on a largely purpose-neutral corporate law doctrine. Certainly, the recent emergence of radical, post-capitalist critique would mean little if the emerging double-movement process was resolved in favour of “sustainability” green” growth-style. However, as mentioned above, there is already evidence that this prospect is anything but inevitable. That said, the past couple of decades have also revealed that there may be an additional and more relentless threat for the privatised uses of corporate law, namely the lack of growth irrespective of environmentalist critique. More specifically, by all measures, world economic output rates have been steadily declining in the past four decades without any signs of reversal in sight. 70 This trend continues in spite of the huge public stimuli offered in the guise of quantitative easing, “green” subsidies or, more recently, COVID-19 recovery funding, and in spite even of the “creative” accounting used to inflate GDP growth by altering the method of calculating economic output.71

In such context where the prime objective of capitalism not only is under attack, but also does not seem to materialise, it may prove impossible for corporate purpose to reincarnate into something socially useful or even desirable. It matters little if this is because it cannot accommodate environmentalism or because insufficient wealth is produced. Even if degrowth movements were eventually marginalised in favour of the economy, in the absence of growth, what used to be an egalitarian struggle may morph into a power game for appropriating any wealth is already there. That is a shift from wealth creation to a mere expropriation with no “trickle-down” for the average person if that ever happened.72 In fact, evidence of this ugly turn is already apparent. Zubov, for instance, has very accurately illustrated how corporate business models have been changing towards oligarchic wealth accumulation (by the very few) in her excellent work on profiteering through personal data expropriation; she calls this “surveillance capitalism” as a successor of industrial and then financial capitalism. 73 Dignam’s assessment of governance arrangements in the few primary owners and users of artificial intelligence – a basic tool in surveillance capitalism - also points to the same direction of autocratic predispositions. 74 To the extent democratic politics is an obstacle to wealth expropriation by the few, it seems that neoliberal society is now crossing its own Rubicon towards an increasingly totalitarian type of social organisation. As Gallo observes, this new type of “totalitarian neoliberalism” is already penetrating even the “capitalist core” of what are regarded as developed democratic states.75 A corporate purpose formulated along totalitarian, oligarchic lines would not be unique in the history of corporate law. The pre-war experience in Europe and the US demonstrates the possibility of this. 76

However, this account cannot end with such a bleak prognosis for the future. Totalitarianism, whether that is oligarchic, corporate or both, has never survived for very long, due to its harmful impact on societies. Even if corporate purpose continues to endorse and expand authoritarian features for some time, just like the post-WW II era led to an admittedly painful exit from totalitarianism, a new type of socially viable compromise may be found this time as well. Nevertheless, such a social equilibrium may not be of a capitalist nature geared around the pursued of material accumulation with no respect to natural and social limits. This has already been tried with the consequence that social critique has now moved on from plain egalitarianism with the addition of environmentalist purposes in the mix; it has produced the irreconcilable trade-off that corporate purpose is unable to absorb. Due to the centrality of privatised corporate law as a contributing institutional element to any potential social collapse, it is very likely that part of any compromise may be its marginalisation by re-purposing the corporation towards a limited number of social goals once again. Corporate legitimacy via a public interest-based purpose would signify the extinction of corporate law as a structure for private business organisation, but this is a small price to pay even for corporate lawyers