The Fire of Invention: Civil Society and the Future of the Corporation

By Hood, John | Freeman, July 1998 | Go to article overview
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The Fire of Invention: Civil Society and the Future of the Corporation


Hood, John, Freeman


The Fire of Invention: Civil Society and the Future of the Corporation

by Michael Novak

Rowman & Littlefield 1997 . 177 pages $19.95

The Corporation, as we know it-and we know it from every aspect of our liveswas invented; it did not come to be of itself." With those words from Oscar Handlin begins Michael Novak's latest work, The Fire of Invention: Civil Society and the Future of the Corporation. The quotation sums up neatly the two main thrusts of Novak's short and readable book: the moral and social importance of the corporation, and the role that invention and patent laws play in a free society.

The Fire of Invention is based on three lectures Novak gave at the American Enterprise Institute in Washington. The first deals with the history and future of the corporation. Novak points out that while the publicly held corporation has become a worldwide phenomenon, the people of the United States are primarily responsible for "inventing" it as a basic social institution.

They did so first by suggesting that they as citizens, not as merely the subjects of a sovereign, could form corporations. The citizens of Massachusetts, for example, made up a charter of incorporation for Harvard University in 1636, shocking the monarchy back in England. By 1800 the United States, populated by only about 5 million people, had more business corporations than all of Europe.

The difference between America and Europe went beyond the extent of incorporation to the nature of civil society itself. Instead of pleasing states and sovereigns, would-be American incorporators would have to please customers and stockholders. "[The corporation] brought to civil society not only independence from the state but also unparalleled social flexibility and a zest for risk and dare," Novak argues.

The second lecture in the book details another of America's unique social institutions: its patent system. Without a system for "intellectual property," the Founders believed, America's experiment with freedom would fail. That is why providing for patents and copyrights, Novak maintains, is among the few enumerated powers of the federal government in the U.S. Constitution. And he does students of economic history a great service by uncovering Abraham Lincoln's longforgotten celebration of the Founders' wisdom about patents. Before patents, Lincoln wrote, inventors had no way of protecting their practical ideas and thus lacked the incentives to develop and use them. "The patent system changed this," Lincoln continued.

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