In the earlier chapters of this second part, I have addressed the concept of ‘firm’ and the need to differentiate it from the concept of ‘corporation’. The firm is an organization performing an economic activity. The corporation is one of the legal devices used to legally structure large firms. All firms of a significant size are structured using a corporation or a group of corporations for the largest ones. Corporations are also used to legally structure the firm's ‘Financial Structure’ as I have defined this expression in Section 8.4.

I have then presented the features of business corporations which explain why they are so widely used to structure large businesses. The business corporation is a formidable tool to concentrate capital (real, like productive assets, or financial, like securities, shares or bonds) and although its use was originally restricted because of the dangers it represented for the liberal economic and political systems, economic development and the spreading of interstate and international economic exchange led to its widespread development and use. Multinational firms developed using these legal tools and, by extending on a global scale, they acquired the ability to make States compete to offer them attractive legal environments. This has led to the need to cope with firms, first on a national basis and, today, internationally.

We need to address the necessity to cope with firms as participants in the World Power System. The issue raised by the rise of private government has been spotted early on both in the US and in Europe. But the development of several promising schools of thought was stopped by the spread of the simplistic ‘agency theory’ which has led to biased firm governance worldwide. The bias extends to accounting rules which do not provide a full picture of the impact of a firm's operations and prevents firms from adapting their ways to the requirements of today's predicament. Addressing world issues such as climate change requires making decisions to change our ways of producing, travelling and consuming, inter alia. These decisions are made by individuals as individuals or as agents of the institutions of the World Power System.