Contractual Freedom and Individual Voluntarism: The Nexus of Contracts Firm as Political Ideology

Research output: Contribution to conferencePaperResearch


The paper analyzes the theory of the firm associated with Chicago School economists such as Friedman, Jensen, Meckling, Alchian, Demsetz, and Fama. According to these economists, the theory of the firm is a neutral, technical, and economic approach to analyze the nature of the modern firm, hereby understanding the firm as a purely private, economic entity. In contrast, the paper understands the Chicago School conception of the firm as an ideological operation seeking to depoliticize the firm and insulate it from state regulation, public scrutiny, and employee influence. By utilizing the Cambridge School of intellectual history’s notion of ‘rhetorical redescription’, the paper elucidates the conceptual struggles around determining the nature of the firm, by focusing especially on the notions of contractual freedom and individual voluntarism inherent in the Chicago School theory of the firm. Through this analysis, the paper demonstrates how the depoliticization of the firm essential to the Chicago is part of the wider neo-liberal project of de-democratization, privatization, and marketization. Ultimately, the Chicago School theory of the firm have had widespread practical consequences for the corporate governance regime of shareholder primacy, and the paper contributes to elucidating the ideological commitments of much corporate governance literature and practice.
Original languageEnglish
Publication date2023
Number of pages29
Publication statusPublished - 2023
EventIntellectual Histories of the Corporation - Copenhagen Business School, Frederiksberg, Denmark
Duration: 7 Dec 20238 Dec 2023


WorkshopIntellectual Histories of the Corporation
LocationCopenhagen Business School
OtherThe research project Corporate Subjects: An Intellectual History of the Corporation, based at Copenhagen Business School, hosts a workshop in December 2023 exploring intellectual histories of the corporation. The workshop is aimed at working towards the publication of an edited volume or special issue with a leading publisher.
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  • Theory of the firm
  • Corporate governance
  • The Chicago School
  • Neo-liberalism
  • Cambridge School contextualism

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