Corporate shareholders vs. people

Todd Henderson has a great post about this line he read in a Roger Cohen article in the New York Times:

When it comes to health it makes sense to involve government, which is accountable to the people, rather than corporations, which are accountable to shareholders.

To which Todd responds, in part:

Shareholders are people. Who exactly does Mr. Cohen think owns our corporations? We do. The "people" who allegedly can hold our government to account are exactly the same people who can hold our corporations to account. If corporations are not accountable to us, the fault dear Brutus lies not in the stars but in ourselves.

Neither the government nor corporations are perfectly accountable or aligned with the people's interests. The question is which is more capable and accountable under specific circumstances. Markets for labor, capital, and products and services provide discipline for firms; elections provide discipline for government. Sometimes we can rely on the former — no one believes we would have a better Internet search engine, grocery store, or computer if it were provided by Uncle Sam instead of Google, Whole Foods, or Apple. Sometimes we can rely on the latter — no one believes we could reduce acid rain without government involvement, in one way or another. There is a reasonable debate to be had about how well functioning the market for delivering health care is and how we may be able to improve it, but that debate is not advanced at all by absurd claims like Mr. Cohen's. We law professors tinker at the edges to try to make governments and corporations more accountable, but to flatly assert one always dominates the other is just sophistry.

Does Mr. Cohen really think the government is always accountable to the people? Let me guess that Mr. Cohen was opposed to the invasion of Iraq. Who exactly does he think did this? Hint: it wasn't a corporation.

The misconceptions Todd discusses are at the heart of the criticism of the Supreme Court's recent Citizens United case, as discussed in my analyses of the case here and in this debate.

Comments

[Joe]

People as shareholders, unfortunately, have very different interests than people as health insurance users.

[MHodak]

I would have made the point that the voting majority of people who are users health insurance have very different interests than the relatively tiny minority, including shareholders, who create health insurance.

Mr. Cohen's premise is that the producers of health insurance owe Mr. Cohen health care.