Corporations are created—and mandated—to make money, regardless of results that affect the world, its own industry, its labor force, or even its managers, writes Canadian law professor Joel Bakan, and that distillation is agreeable to such disparate voices at Nobel Prize- winning economist Milton Friedman and iconoclastic activist Noam Chomsky of MIT. What that means, Bakan argues, is that this legal fiction—which through court rulings has acquired rights formerly reserved for human beings—is psychopathic. In other words, corporations can knowingly take action that is destructive with no regard to victims. If readers saw another person act in such ways, they’d identify the culprit as a dangerous nut.
Bakan’s distinctive determination is that this economic institution and legal construct is essentially unbalanced, existing almost exclusively for its self-interest no matter the consequences. Since corporations have come to have a profound influence on society and people, it’s compelling to read a thoughtful, plausible analysis of why some corporations essentially slash and burn their ways through markets, communities, pensions, unions, suppliers, competitors and even countries.
A century ago, the corporation was not nearly so influential, important, or pervasive. Partnerships and proprietorships were business’s rules of thumb, and owners or partners were liable for consequences of their companies, whether financial losses or harm to others. Now—through increasing corporate power—corporations have manipulated government’s moderating controls so there are fewer regulations constraining their actions, and have relentlessly promoted so-called free-market answers to almost all problems. Therefore, governments’ surrender to lobbyists and public-relations juggernauts has unleashed corporations’ further “psychopathic” behaviors—which ultimately can hurt themselves.
Though Bakan has a serious, even shocking, perspective, he is sober, witty and thorough. His bibliography and footnotes are extensive and interesting as tips to further study. Also interesting is Bakan’s spinning off his work into a documentary film also titled The Corporation, further presenting the case that this modern business model that people have accepted is relatively recent, not inevitable, and inherently—intentionally—without a conscience.
The Corporation Summary
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Canadian writer, law professor, and legal theorist Joel Bakan wrote The Corporation: The Pathological Pursuit of Profit and Power. Published in 2004, it was quickly turned into a documentary directed by Mark Achbar and Jennifer Abbot. Both the film and the book explore the modern-day concept of a corporation. The book is based on Bakan’s extensive interviews with authorities in the corporate world and in-depth research. As an illustration and point of comparison, Bakan compares corporations to a mentally unstable person. His thesis and diagnosis is that corporations are pathological in nature, pursuing profit before the common good, even the good of their own employees, managers, or industry.
Bakan supports his thesis with the following claims: corporations pursue their own interests above others, exploiting people without regard for legality or morality; a corporation’s singular vision victimizes individuals, the environment, and investors, and can cause self-destruction; privatization and deregulation has allowed corporations to operate with greater autonomy from governments.
The book explores how corporations operated a century ago in comparison to present day. At that time, corporations were not as influential or ubiquitous as today. Partnerships were more valued, Bakan asserts, and owners were more responsible for the consequences of their actions. Over time, corporations have manipulated moderating policies from the government and promoted the free market as the answer to all problems. Now, lobbyists and public relations wield unbridled power to the point that the unregulated business practices of their corporations can spell ruin for the community and themselves.
These changes are not irreversible, Bakan believes. Reform and regulation through democratic processes can change the way corporations essentially run the country. In the end, he believes that more public ownership of corporations would solve many of the current woes of the system.
Bakan’s tone is at once serious and playful. His assertions are shocking and provocative, but he maintains a sense of wit and clear-headedness that helps sell his thesis. Despite being a law professor, the writing is simplistic and accessible to mass readership. He provides footnotes and additional sources for readers to do their own research.
Even so, the book and the film are regarded as left leaning. Critics have pointed out the omission of the consequences of public ownership of companies, such as those that occurred within Communist countries and monarchies. The book sticks to one idea, for better or worse, and doesn’t consider capitalist practices from other countries.
Despite criticisms about its monomania and simplicity, the book and film were both generally well-received and considered accessible and thought-provoking.