Document Type
Article
Publication Title
Berkeley Business Law Journal
Publication Date
2005
ISSN
1548-7067
Page Number
135
Keywords
corporate law, judicial intervention, agency costs
Disciplines
Commercial Law | Law
Abstract
This is a short essay on what should be the fundamental criterion used to evaluate corporate law. I argue that the overall goal of good corporate law should be to assist private parties to create wealth for themselves and the economy in a manner that does not inflict uncompensated negative externalities upon third parties. Private businesses that produce goods and services should be encouraged by the state because creating greater wealth is generally beneficial to society. Corporate law can act as a helpful precondition for faster economic growth by protecting the parties' expectations, encouraging savings and investment, reducing transaction costs, minimizing agency costs, and compensating third parties for any harm that they may suffer from this business activity.
Recommended Citation
Randall Thomas,
What is Corporate Law's Place in Promoting Societal Welfare?: An Essay in Honor of Professor William Klein, 2 Berkeley Business Law Journal. 135
(2005)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/974