An Aristotelian Perspective
Chapter 5: Corporate Despots and Constitutional Rulers
The third element of our analogy between states and ﬁrms refers to their organization. Both states and ﬁrms require a governing body with its rule or constitution. The major diﬀerence between them, however, is that, while states are sovereign (Pltcs, 1278b), corporations are not. Therefore, the governance of business organizations or ﬁrms is always subject to the governments of the states, which represent the supreme authority in the places where they reside and operate. In the Politics, Aristotle explores a plurality of state regimes, depending on the number of people who govern and for the good of whom. The main division he establishes is between ‘despotic’ and ‘constitutional’ rules. A despotic rule is one exercised over subjects who are ‘by nature slaves’, and a constitutional rule is one over those who are ‘by nature free’ (Pltcs, 1255b). Previously we have seen the preponderant role that nature plays over nurture – that is, education and culture – in a person’s ﬁttingness for citizenship. The same is true for one’s propensity to govern or rule, exercising authority and lordship, or to be governed or ruled, exercising obedience. With regard to a despotic rule or regime, although both slave and master may have coincident interests, a slave is ruled primarily for the master and only accidentally for himself (Pltcs, 1278b). Compare this with a father’s government of his wife and children as an example of a constitutional rule, where the good of the governed or the common good of the household comes ﬁrst (Pltcs,...
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