Defending the Commons

The purpose of a corporation

A corporation is a group of people that has been given the legal status to act as a kind of "artificial person". The law gives a corporation certain rights like the ability to own property, sign contracts and pay taxes.

Shareholders are people who invest money in a corporation by buying shares through the stock market. These people are involved in making decisions regarding the behaviour of the corporation. However, those who have invested the most money are granted the most decision-making power. This is like having a political system where you get more votes the more money you have, instead of democracy with its one-person/one-vote system.

Corporations also have limited liability.  This means that shareholders only lose the cost of their shares should the business fail, as oppose to other forms of business in which the owners are responsible for debts and other obligations. Limited liability allows corporations to engage in riskier enterprises than individuals would; no one stands to lose personally should they fail.

Corporations are required by law to hold the interests of their shareholders ahead of the interests of the larger community. In practice, this idea has translated into the requirement to increase profits, even at the expense of environmental protection and community welfare. Without increased profits, the stock price will not go up, and shareholders will no longer invest in the company.