39 W. St. U. L. Rev. 281 (2011-2012)
Reactionary Reform and Fundamental Error

handle is hein.journals/wsulr39 and id is 293 raw text is: Reactionary Reform and Fundamental Error
By Reza Dibadj*
INTRODUCTION...      ..................................... .......... 281
REACTIONARY REFORM .       .............................................. 282
Ambiguity and deferral .     .................................... 282
Political economy of business law reform  ....................... 285
FUNDAMENTAL ERROR         ............................................... 287
Constitutional personhood of corporations  ....................... 287
Anemic corporate law .....    ......................   ....... 292
Lax antitrust   ............................................ 296
CONCLUSION............................................................. 300
INTRODUCTION
This timely Symposium poses a very insightful, yet extraordinarily difficult,
question when it asks 4 More Years? Business Law and the Great Recession. As we
approach the four-year anniversary of the collapse of Bear Steams-an event viewed
by many as the start of the Great Recession-will we face Four More Years of
economic difficulties and, perhaps more importantly, what might business law do to
prevent economic catastrophe from recurring?
In earlier work, I have tried to decipher what some of the facilitators to the
Great Recession have been and whether our major legislative response, the Dodd-
Frank Act, will be successful in addressing these facilitators and averting the next
economic disaster. I found it did not and tried to offer some thoughts as to why. Part I
draws from this research and offers a sobering portrait of the reaction business law has
had so far to the Great Recession.
As the years have passed and our economic malaise has dragged on, however,
I have become even more pessimistic about the law's existing reactions to economic
crisis. I also wonder increasingly whether the Great Recession was a long time-
decades-in the making and is the product of fundamental and troubling
inconsistencies with law and policy. Part II, the core of this Article, argues that we
need to rethink some very basic principles in business law. Tinkering around the
margins will simply no longer do. More specifically, I offer three areas for
fundamental reform: fiduciary duties in corporate law, the constitutional personhood
of corporations, and antitrust. My thesis is simple: unless there are fundamental
changes in these three domains, the cavalcade of economic crises we have witnessed
with increasing frequency over the past few decades will very likely continue.
* Professor of Law, University of San Francisco. I thank the editors of the Western State University
Law Review for giving me the opportunity to present the ideas in this article on March 3, 2012 in
Fullerton, California.

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