Chris Dillow is right: when corporate power exists, prices do not reflect social costs, and profit-maximization may not contribute to the welfare of society as a whole.*
Even more: the existing approaches (such as ignoring corporate power or suggesting that corporations adhere to ethical norms or creating new business regulations) ignore the existence of class.
There is, though, a fourth view – the Marxian one. This says that the tension between profit maximization and welfare hasn’t increased simply because of a failure of law and morals, but because of a genuine shift in the balance of class power. Firms now have power and one thing we know about power is that it’ll be used. Unless this changes, hopes of reconciling profit maximization with well-being might well prove mistaken.
What happens then when we focus on class? It means, first, we can locate the origins of corporate power in the surplus corporations are able to capture (either from their own employees or, in the case of the financial sector, from the employees of other corporations, in the manufacturing and service sectors). Corporate power derives, in other words, from control over the social surplus—which allows corporations to set the rules of the game and reproduce their power over time (with the aid, of course, of economic doctrines that justify corporate power through theories of value according to which profit-maximization is in the social interest).
The second implication is that a different way of organizing corporations would change the balance of class power. If, for example, corporations were run by their employees instead of by a board of directors elected by shareholders, the surplus appropriated and appropriated by the collectivity of workers could in fact be used in the social interest. That’s not to say tensions and contradictions over the surplus would cease to exist—but it wouldn’t be as now, when the decisions of powerful profit-maximizing corporations are inimical to the well-being of the vast majority of the members of society. Instead, workers would decide, under a very different set of norms and regulations, how the surplus they produce would be utilized to eliminate existing forms of corporate power.
Just that one change would be a welfare-enhancing move for the world in which we live.
*In technical terms, when corporate power creates negative externalities (such as pollution or unfair wages), the conditions of the first theorem of neoclassical welfare economics are not satisfied. Therefore, it cannot simply be said that the only social responsibility corporations need to adopt is to maximize profits.