Response Two Visions of Corporate Law

What explains the persistence of certain debates in corporate law? Many fundamental questions remain unresolved despite dozens of years of research, countless conferences, and innumerable studies, both theoretical and, more recently, empirical. This is puzzling because one would expect time and evidence to move us toward a resolution of debates about what is the most efficient way of doing something. This Essay argues that these long-standing and unresolved debates are such because they are not really debates about the merits of the issues but rather what Thomas Sowell called “a conflict of visions.”1 The real debate is a behind-the-scenes tussle between those with a faith in processes (like markets) and those with a faith in expertise. Until this debate is carried out in the forefront, these other debates will remain unresolved. The longest-standing and most hackneyed debate in corporate law,2 and the one that I will use to illustrate my argument, is whether the American way of making corporate law—a state-based approach allowing choice of law not tied to the physical location of people,