ought to depend on a broader, and ongoing, project that asks what our society should look like and analyzes the capacity of law -- including corporate law -to get us closer to that ideal One can illustrate the ways this would change the debate within corporate law by pointing to he way debates about other public policy choices affecting business enterprises take place. The minimum wage provides a good example. Several years ago, the U.S. Congress increased the minimum wage from $4.25 to something over $5 per hour. Note the similarities with a proposal to have corporations balance the needs and interests of non-shareholder constituencies in making corporate decisions. Both proposals impose costs on the corporation that might result in a decrease in shareholder return. 3 Both proposals restrict the intermal decisionmaking of the corporation-the minimum wage statute by disallowing labor contracts offering wages below the statutory minimum, the stakeholder statute by disallowing agreements between management and shareholders that include a promise by management to maximize returns without concen for other constituencies. Both proposals impose mandates on the corporation that were not necessarily assumed by the shareholders when they purchased their shares In the debate about the minimum wage however an argument that a legislated increase is impermissible because the shareholders"own the corporation"would seem incongruous and unresponsive, or a throw-back to Lochner. people seem to understand that the debate about an increase in the minimum wage turns on, and should turn on, the effect of such an increase on workers companies, and the economy as a whole. Few serious commentators would argue that raising the minimum wage is impermissible because it forces managers to give away money that"belongs"to the shareholders, and no one would find it persuasive( after the New Deal) that increasing the minimum wage violates a"contract"" between managers and shareholders The"rights of the shareholders are simply beside the point in the debate. In contrast, when a proposal is made to change the rules of corporate governance, rights-based arguments become a common part of the discourse consumers or suppliers of capital and labor. This will in turn depend on the elasticity of supply any o 3 How much of a loss will depend in large part on how much of the costs can be passed on demand in the various markets33How much of a loss will depend in large part on how much of the costs can be passed on to consumers or suppliers of capital and labor. This will in turn depend on the elasticity of supply and demand in the various markets. 9 ought to depend on a broader, and ongoing, project that asks what our society should look like and analyzes the capacity of law -- including corporate law -- to get us closer to that ideal. One can illustrate the ways this would change the debate within corporate law by pointing to the way debates about other public policy choices affecting business enterprises take place. The minimum wage provides a good example. Several years ago, the U.S. Congress increased the minimum wage from $4.25 to something over $5 per hour. Note the similarities with a proposal to have corporations balance the needs and interests of non-shareholder constituencies in making corporate decisions. Both proposals impose costs on the corporation that might result in a decrease in shareholder return.33 Both proposals restrict the internal decisionmaking of the corporation -- the minimum wage statute by disallowing labor contracts offering wages below the statutory minimum, the stakeholder statute by disallowing agreements between management and shareholders that include a promise by management to maximize returns without concern for other constituencies. Both proposals impose mandates on the corporation that were not necessarily assumed by the shareholders when they purchased their shares. In the debate about the minimum wage, however, an argument that a legislated increase is impermissible because the shareholders “own the corporation” would seem incongruous and unresponsive, or a throw-back to Lochner. People seem to understand that the debate about an increase in the minimum wage turns on, and should turn on, the effect of such an increase on workers, companies, and the economy as a whole. Few serious commentators would argue that raising the minimum wage is impermissible because it forces managers to give away money that “belongs” to the shareholders, and no one would find it persuasive (after the New Deal) that increasing the minimum wage violates a “contract” between managers and shareholders. The “rights” of the shareholders are simply beside the point in the debate. In contrast, when a proposal is made to change the rules of corporate governance, rights-based arguments become a common part of the discourse