In this modern age of global commerce, it seems odd that I have been asked to address the topic 'In defence of the corporation'. Even the most ardent critic of the corporation would not take the position that the corporate form should be dismissed as an ill-conceived venture of modernity so that it would be for the better to be rid of it and return to being a nation of artisans. As a first approximation, the success of the corporation can be measured by the extent of the assets that are controlled through that form of business entity. Here, and everywhere else in the world, the corporation has been enormously successful in attracting and retaining capital investment. The survival of the fittest in economic affairs is not a test to be lightly ignored.

How did this come about? One answer lies in the expansion of the number of enterprises that are entitled to assume the corporate form. The corporation is, as a legal entity, a business that only the state can create. Originally, when corporations were specially chartered institutions, the state conferred corporate status only on select individuals. It was necessary to appeal to the Crown or a branch of the state to obtain a charter. One of the great liberalisations of the nineteenth century was that anybody who could file the appropriate papers could get the benefits of the corporate form as a matter of right. What started as an exercise of political intrigue became a routine ministerial act. This process of democratisation tended to eliminate many of the monopoly elements associated with using the corporate form, because all businesses could then get the key advantages of limited liability and easily alienable interests. The decline of the special charter was a comprehensive legal reform that has produced enormous benefits.