‘The purpose of corporations,’ writes William Magnuson, ‘is, and always has been, to promote the common good.’ That’s a very bold claim in an era when the left is convinced that shareholder-owned limited liability companies (which is what Magnuson means by corporations) largely exist to exploit the customer, the worker and the planet for the enrichment of owners and executives; while plenty of entrenched boardroom opinion believes with Milton Friedman that the sole social responsibility of business is ‘to use its resources and engage in activities designed to increase its profits, so long as it… engages in open and free competition without deception or fraud’.
The ‘common good’ may come into play in fashionable theories about the ‘social purpose’ of business ranking equal with, or ahead of, the profit motive – but that’s a development dating only from the middle of the past decade. Magnuson has a different take on the relationship between business and the society which nurtures it. Through the sweep of history since ancient Rome, he argues, corporations have always been ‘closely connected to the state’ and useful in carrying out tasks and projects for which the state itself is ill-equipped. Yes, their promoters are driven by the profit motive – that’s what gives them their energy. And, yes, they frequently fall into ‘vice and greed’ and many other sins and have to be regulated back into compliance with the agreed common good. But, essentially, they are brought into existence ‘to promote society, not oppose it’.
Instead of a long theoretical argument on this theme, however, For Profit offers a set of historical examples, starting with the Roman societas publicanorum. These corporations, remarkably like modern companies in structure, had their origins in ‘tax-farming’ (the practice of individuals buying the right to collect taxes in parts of the empire) but grew into organisations capable of taking on contracts to procure togas and horses or build aqueducts or otherwise fulfil obligations that the republic itself could not keep up with.