The Clarendon Law Lectures 2024: The Non-Capitalist Enterprise

Lectures will take place on Friday 17th, Monday 20th and Tuesday 21st May, at 17:30. Please fill in the registration form above if you plan to attend. 

Enterprises have been around for much of human history. They are formed when people join forces in pursuit of a common goal, for pooling skills and resources, diversify risk, or simply finding a way to sustain themselves and their families. Making money has been part of their mission, not, however, their only or even primary goal. Viewed in this light, the modern business corporation with its prioritization of maximizing value exclusively for their shareholders is the outlier, not the NCE. Indeed, while corporations account for the largest firms by size and market capitalization, they are outnumbered by NCEs almost anywhere, including in capitalist economies. In recent years, there has been a revival of the idea of NCEs as indicated by the renewed interests in cooperatives, and legislative proposals for steward ownership, and the like. This therefore seems an opportune time to take a closer look at enterprises that subordinate profits to other goals, to understand their legal structure, the financial challenges, and, last but not least, to offer an alternative to the standard theory of the firm.

Please see below for more details about the lectures.

Lecture 1: The Law of Non-Capitalist Enterprises (NCE)

Friday 17th May, 17:30, followed by a drinks reception.

NCEs can and do use many different legal forms to organize their operation and governance. The plurality of forms sets them apart from the highly standardize business corporation, but creates challenges of its own in terms of legal costs at the founding moment, scalability, and mission control. Case studies, including recent examples such as Patagonia or OpenAI, will be used for illustration.

Lecture 2: Finance – A Double-Edged Sword

Monday 20th May, 17:30

Finance is a critical ingredient for all enterprises. It is well established that early on most rely on family on friends, and occasionally on local banks. Scaling size and operations, however, often requires external funding in addition to retained earnings. NCEs face the dilemma of securing funding but without relinquishing control of their mission or preferred governance structure – a task that is not impossible, but difficult in the existing ecology of finance.

Lecture 3: Rethinking the Theory of the Firm

Tuesday 21st May, 17:30.

Economists discovered the firm as a serious object of inquiry only a century ago when Ronald Coase famously asked, why firms exist at all. Firms were benchmarked against markets, which gave us transaction cost economics and the incompleteness of contracts as foundations for the theory of the firm. In effect, firms were reduced to substitutes for markets rather than alternative modes for the organization of socioeconomic relations. NCEs require a different theory of the firm that is aligned with theories of organizations more generally.

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Katharina Pistor is the Edwin B. Parker Professor of Comparative Law at Columbia School of Law. She is a leading scholar and writer on corporate governance, money and finance, property rights, and comparative law and legal institutions.As the director of the Center on Global Legal Transformation, Pistor directs the center’s work to develop research projects and organize conferences to examine ways in which law shapes global relations and how they, in turn, transform the law. She is a research associate with the Centre for Economic Policy Research, and she has served as principal investigator of the Global Finance and Law Initiative (2011–2013). Pistor was a member of the board of directors (2011–2014) and a fellow (2019) of the European Corporate Governance Institute. In 2015, she was elected a member of the Berlin-Brandenburg Academy of Sciences and Humanities, and in 2021, she was elected a member of the European Academy of Sciences.

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