Ivan Amirian has posted Origins of Human Cooperation, and the Nature of the Firm on SSRN. Here is the abstract:
Nowadays there is no agreement among legal scholars on the essence of the firm. Still, the most proliferated concepts related to the nature of the company could be schematized on the axis below. Nexus of contracts ______________________Creature of the state.
At the one end of the spectrum, there is a concept that the firm is a nexus of contracts1; on the other end, there is the idea that firm is the creature of the state2. Finally, the so-called sovereign coercion theories are placed in between.3 The contractual theory of the firm is based on an economic theory and on a seminal paper by Michael C. Jensen and William H. Meckling, where they noted that «contractual relations are the essence of the firm», in particular. 4 The concept that the firm is a creature of the state (the concession theory) obviously has a much deeper history. According to David Millon, in the 19th century the corporation in a legal discourse was regarded as an entity in whose creation the state played a constitutive role.5 Arguably, this approach goes all the way back to the beginning of the 17th century when English East India Company was established by a royal charter granted by Queen Elizabeth I. Two years later, in 1602, the Dutch East India Company was chartered by the States-General.6 The practice of forming companies through an Act of Parliament in England was continued throughout the 17th and 18th century.7 It was only in 1811 that New York became the first jurisdiction where the general incorporation law was enacted 8 so the corporations could come to into existence without special legislative charters.9 Consequently, from that moment on the ideas started to drift toward the concept that the firm is a result of private agreements, and by the beginning of the 20th century this approach became dominant.10 A couple of decades later, at the intersection of the contractual and the concession theories of the firm there emerged the theories of sovereign coercion.11. Sovereign coercion theories «conjoin the government and the contract through sovereign enforcement of private contracts».12 Nowadays, arguably, most influential theories of those explaining the concept of the firm could be placed in the spectrum from the hard contractual theory to the hard concession theory.Meanwhile, however, we assert that, while forming the firm, both the state and the private contracts play rather significant but still only a secondary role. By the secondary role we mean that neither contracts nor the state fit the role of the basic cause of existing of such a phenomenon as a firm. Private contracts with respect to the business entities could be regarded as mere tools that facilitate formation of the entity.
At the same time, the role of the state nowadays mostly comes down to the formation and regulation of the legal environment. For instance, through the statutory default rules for the owners of the company, the state can distribute the risk burden among the economic agents in a particular way.
Therefore, we argue that the nature of the firm cannot be reduced either to the creature of the state or to the tools that enable someone to create the company. Moreover, we believe that while explaining such a phenomena as a firm, modern theories do not give enough credit to such an ussie as human cooperation and its origins.
The idea that to explain certain legal phenomena we need to have a closer look at social aspects is not new and goes back at least to early 1980th when Ian Macneil argued in his papers that all contracts take place in the so-called «social matrix», which means that «relational» norms such as reciprocity and the others play a significant role.13 In the legal theory this approach was named the Relational contract theory.
Few years later, William W Bratton applied Macneil`s relational approach to the corporate doctrine.
He noted that the entity «exists and matters because of heightened interdependence among the parties participating in corporate ventures and institutions».14 This approach did not become popular but in 2005 behavioral scientists Gilbert Roberts (15) and later M. Tomasello et al. (16) proposed the idea of explaining human cooperation through the concept of interdependence. These papers of G. Roberts and M. Tomasello et al. showed that the ideas of William W Bratton, with respect to the interdependence of the parties of the corporate ventures as well as application of social, behavioral and even anthropological approaches to the explanation of the phenomenon of the firm, have a solid scientific basis and thus require more thorough and comprehensive research and analysis.
