“Constitutionalizing” the corporation

To become effective instruments in the attainment of a sustainable society, corporations should have their constitutional status settled. Thus far, mainly by Supreme Court decisions, corporations have an uncertain status. They are “persons” under the Constitution and have certain rights; but unlike natural persons, they do not have concomitant constitutional duties. Corporations should be viewed as “private” governments exercising substantial power in society. They are, however, considered to be associations of individuals rather than divisions of society. The need is to legitimate their governing power by “constitutionalizing” them. That can be done by corporations accepting, or having imposed upon them, two principal constitutional duties. First, means should be developed whereby corporate officers routinely take the general good into account. That duty could be implemented by making “social impact statements,” analogous to but broader than the familiar environmental impact statements, before making important corporate decisions. Secondly, as “sociological communities,” corporate officers wield considerable power over members of those communities. A bill of rights similar to the Constitution's Bill of Rights is recommended so as to make corporate power that is necessary for achievement of societal goals as tolerable and decent as possible. Acceptance of those duties would make corporations parts of, not separate from, the greater corporation called society. They would be private, profit-making entities with a definite public function. Preferably, the duties should be voluntarily accepted. Congress, however, has undoubted constitutional power to impose both, should it so desire.     

“ENVIRONMENT”, “NEEDS” AND REAL INCOME COMPARISONS(1)

Conventional measures of national product make no pretence of including everything that affects welfare. As increasing attention is being paid to environmental pollution, the problem of incorporating certain non-economic variables into the analysis of well-being becomes more relevant. The object of this note is to show how a difference in “needs” for, and hence expenditures on, anti-pollutants, which will show up in conventional national accounts comparisons as differences in “tastes”, should be converted into differences in real income.     

The Role of Absolute Continuity in “Merging of Opinions” and “Rational Learning”

D. Blackwell and L. Dubins (1962, Ann. Math. Statist.38, 882–886) showed that opinions merge when priors are absolutely continuous. E. Kalai and E. Lehrer (1993, Econometrica61, 1019–1045) use this result to show that players in a repeated game eventually play like a Nash equilibrium. We provide an alternative proof of merging of opinions that clarifies the role of absolute continuity while casting doubt on the relevance of the result. Persistent disagreement, the opposite of merging, allows the construction of a sequence of mutually favorable “bets.” By a law of large numbers, both agents are certain they will win these bets on average. This certain disagreement violates absolute continuity. Journal of Economic Literature Classification Numbers: C11, C69, C72, D83.