Who creates corporations? Where do they come from? Who controls and sets their rights and responsibilities, and sets their very makeup?

I would like the usually astute Eduardo Porter to answer these questions, as he rereads his own essay, this essay from this morning’s New York Times. His essay is about corporations, and whether they can or should attempt to pay attention to anyone besides their shareholders and their quarterly profit statements. He concludes by essentially saying that while it sounds nice, we venture into murky territory in asking corporations to pay attention to anyone beside their shareholders. If want to have good things like more equitable pay for workers, we should turn to government.

Porter is ignoring that governments create corporations, and thus government can set the charters of corporations any way they want. If we the people so chose, we could require that corporations have double boards, they way Germany does, and have labor representations on them. We could require that they pay attention to their externalities and the communities they reside in, and we could define what that means. We could give corporations expiration dates, sunset provisions if you will, and require them to reapply for their charters, which would give lawmakers a chance to see how they performed. “We” could do all sorts of things. But the first step is realizing that “we” have that power.

It’s a sad gap in an essay that starts off well. Porter has some great history that put some flesh on the bones of corporations’ behavior over the last century. But in what seems to me squishy Times fashion, he edges away from his own evidence and ends up quoting a law professor, Margaret Blair of Vanderbilt University, who should know better, that it is unrealistic to expect corporations behavior to change because the “ethic of shareholder value is too strong.”

Leaving aside what the word “ethic” is doing in here, a law professor should certainly know that it’s not about culture or ethics; it’s about law. If laws require corporations to pay attention to things beside shareholder value, they will. And it’s in our power to do that.

I talk about this in more depth in two chapters of my latest book, The Surprising Design of Market Economies, which came out in paperback this year. I  also touch on the issue in this op-ed in The New York Times proposing national corporations, and in this one in Bloomberg View that say why capitalism and business are by definition allies, not enemies.

Maybe I’m misreading Porter. Maybe when he says citizens should turn to government, he means they should start looking at rewriting the rules of corporations. But I don’t think so, because he is a good writer, and if he had meant that, it would have been clear.

If Porter wanted to broaden his focus to other countries,  he would see – or he probably already knows – that other countries, particularly Germany, do a better job addressing social problems precisely because they do require corporations to care about them.