35 Seattle U. L. Rev. 1369 (2011-2012)
A Shallow Harbor and a Cold Horizon: The Deceptive Promise of Modern Agency Law for the Theory of the Firm

handle is hein.journals/sealr35 and id is 1395 raw text is: A Shallow Harbor and a Cold Horizon:
The Deceptive Promise of Modem Agency Law
for the Theory of the Firm
David A. Westbrook*
I. INTRODUCTION
For at least a hundred years, legal scholars have sought a theory of
the firm, some sort of theoretical account of the corporation.' Scholars
continue to write about the nature of the business corporation, and con-
ferences such as this one continue to be held, so perhaps an adequate
theory has proven elusive. Or perhaps professors produce texts because
that is what professors do. And maybe periodic reconsideration of core
questions is the way an academic discipline renews itself, i.e., legitimates
the next generation, without redefining itself altogether. But rather than
understand this perennial need for a theory of the firm as intellectual
work that needs to be done (because our forebears did not solve the prob-
lem), or in terms of the sociology of the profession, I want to explore a
dominant account of the firm as a symptom of political anxiety.
Modem agency law-the consensual agreement of one person to
work for and under the control of another-has been widely used to pro-
2
vide a general framework for understanding a great deal of business law.
Agency law concepts can be used to frame pedagogical, scholarly, insti-
tutional, and even political discourses. In so doing, modem agency law
addresses concerns about the institution of the corporation, generally by
reference to contract: institutions are created out of essentially consensu-
al, and hence justifiable, relationships among autonomous individuals.
* Floyd H. & Hilda L. Hurst Faculty Scholar and Professor of Law, SUNY Buffalo Law School.
Once again, I owe Jack Schlegel thanks for a careful reading and sound suggestions. The mistakes
are, as ever, mine.
1. John Dewey, The Historic Background of Corporate Legal Personality, 35 YALE L.J. 655,
655-73 (1926).
2. See, e.g., DAVID G. EPSTEIN ET AL., BUSINESS STRUCTURES (3rd ed. 2010); WILLIAM A.
KLEIN ET AL., BUSINESS ASSOCIATIONS, CASES AND MATERIALS ON AGENCY, PARTNERSHIPS, AND
CORPORATIONS (7th ed. 2010); ALAN PALMITER & FRANK PARTNOY, CORPORATIONS: A
CONTEMPORARY APPROACH (2009).

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