170 of 181 people found the following review helpful:
5.0 out of 5 stars
Striking thesis convincingly presented, July 22, 2004
The modern corporation, according to law professor Joel Bakan, is "singularly self-interested and unable to feel genuine concern for others in any context." (p. 56) From this Bakan concludes that the corporation is a "pathological" entity.
This is a striking conclusion. The so-called pathological personality in humans is well documented and includes serial killers and others who have no regard for the life and welfare of anyone but themselves. But is it really fair to label the corporation, managed and owned by normal caring and loving people, in this way?
Bakan thinks so. He begins with a little history showing how the corporation developed and how it came to occupy the dominate position that it enjoys today. He recalls a time before "limited liability" when shareholders were legally responsible for the actions of the corporation, a time when corporations could not own stock in other companies, a time when corporations could not acquire or merge with other corporations, a time when shareholders could more closely control corporate management.
Next he shows what corporations have become, and finally what can be done about it.
Bakan's argument includes the point that the corporation's sole reason for being is to enhance the profits and power of the corporation. He shows by citing court cases that it is the duty of management to make money and that any compromise with that duty is dereliction of duty.
Another point is that "corporations are designed to externalize their costs." The corporation is "deliberately programmed, indeed legally compelled, to externalize costs without regard for the harm it may cause to people, communities, and the natural environment. Every cost it can unload onto someone else is a benefit to itself, a direct route to profit." (pp. 72-73)
And herein lies the paradox of the corporation. Designed to turn labor and raw materials efficiently into goods and services and to thereby raise our standard of living, it has been a very effective tool for humans to use. On the other hand, because it is blind to anything but its own welfare, the corporation uses humans and the resources of the planet in ways that can be and often are detrimental to people and the environment. Corporations, to put it bluntly, foul the environment with their wastes and will not clean up unless forced to. (Fouling the environment and leaving the mess for somebody else to clean up is exactly what "externalizing costs" is all about.)
Furthermore, corporations are amoral toward the law. "Compliance...is a matter of costs and benefits," Bakan writes. ( p. 79) He quotes businessman Robert Monks as saying, "...whether corporations obey the law or not is a matter of whether it's cost effective... If the chance of getting caught and the penalty are less than it costs to comply, our people think of it as being just a business decision." (p. 80)
The result is a nearly constant bending and breaking of the law. They pay the fine and then break the law again. The corporation, after all, has no conscience and feels no remorse. Bakan cites 42 "major legal breaches" by General Electric between 1990 and 2001 on pages 75-79 as an example. The fines for maleficence are usually so small relative to the gain that it's cost effective to break the law.
Bakan disagrees with the notion that corporations can be responsible citizens and that corporate managers can act in the public good. He believes that corporations can and sometimes do act in the public interest, but only when that coincides with their interests or because they feel the public relations value of acting in the public interest is greater than the cost of not doing so. He adds "business is all about taking advantage of circumstances. Corporate social responsibility is an oxymoron...as is the related notion that corporations can...be relied upon to promote the public interest." (p. 109)
As for corporations regulating themselves, Bakan writes, "No one would seriously suggest that individuals should regulate themselves, that laws against murder, assault, and theft are unnecessary because people are socially responsible. Yet oddly, we are asked to believe that corporate persons--institutional psychopaths who lack any sense of moral conviction and who have the power and motivation to cause harm and devastation in the world--should be left free to govern themselves." (p. 110)
Bakan even argues (and I think he is substantially right) that "Deregulation is really a form of dedemocratization" because it takes power away from a government, elected by the people, and gives it to corporations which are elected by nobody.
Some of the book is devoted to advertizing by corporations, especially to children, and the effect of such advertizing. Beyond advertizing is pro-corporate and anti-government propaganda. Bakan quotes Noam Chomsky as saying, "One of the reasons why propaganda tries to get you to hate government is because it's the one existing institution in which people can participate to some extent and constrain tyrannical unaccountable power." (p. 152)
What to do? Well, for starters, make the fines large enough to change corporate behavior. Make management responsible--criminally if necessary--for the actions of the corporation. Bakan includes these among his remedies on pages 161-164. He also wants the charters of flagrant and persistent violators to be suspended. He writes that corporations are the creations of government and should be subject to governmental control and should NOT (as we often hear) be "partners" with government.
He would also like to see elections publically financed and an end to corporate political donations. Indeed if we could take the money out of elections, our representatives would not be beholden to the corporate structure and would act more consistently in the broader public interest. I think this is one of the most important challenges facing our country today, that of lessening the influence of money on the democratic process.
Bottom line: a seminal book about one of the most important issues facing us today.
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47 of 49 people found the following review helpful:
5.0 out of 5 stars
The Corporation is a Sociopath, October 6, 2004
As a small business owner, I am attuned to the impositions of governmental intrusions. I decided to read this book in order to get a more balanced view. Although this author definitely has a bias, he does not come across as overtly fanatical, and has plenty of examples to document his position.
The corporation is compared to a sociopath. The sociopathic personality is "irresponsible, manipulating, grandiose, lacking in empathy, has asocial tendencies, refuses to accept responsibility for actions, and cannot feel remorse....Many of the attitudes people adopt and the actions they execute when acting as corporate operatives can be characterized as psychopathic."
Moreover, by the legal way a corporation is set up, its only motive is profit. Every action taken, no matter how altruistic it looks, has to ultimately be a search for profits. Otherwise, the corporation is subject to litigation by the shareholders. "The corporation is deliberately programmed, indeed legally compelled, to externalize (dump) costs without regard for the harm it may cause to people, communities, and the natural environment. Every cost it can unload onto someone else is a benefit to itself, a direct route to profit."
"Many major corporations engage in unlawful behavior, and some are habitual offenders with records that would be the envy of even the most prolific human criminals." Following this quote is a list of 42 heavy fines levied over 11 years to GE. This sounds akin to keeping a hardened repeat criminal under perpetual parole with minimal supervision and occasional hand slaps. A law professor is quoted, "The practical business view is that a fine is an additional cost of doing business....the corporation, once convicted and fined, will simply have learned how to cover its tracks better."
Within the past 20 years, corporations have really gotten in bed with government in the United States. Billions in PAC money is spent every year for lobbying and political contributions. "It's very hard for a politician to turn someone down who has given a hundred thousand dollars to [his or her] campaign. In terms of getting in the door and making your case, it's obviously easier." How can virtually unfunded (by comparison) watchdog groups compete with this machine aimed toward sugar-coating their industries and de-regulation.
I recommend this book highly, and am looking at the current political campaign with another view as to why certain programs are supported or not supported. Perhaps in their votes our politicians are exhibiting sociopathic traits they borrowed from their corporate contributors or from lobbyists representing the corporate mindset.
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69 of 77 people found the following review helpful:
5.0 out of 5 stars
If you really care, you'll not miss this book, July 3, 2004
The author accurately describes the corporation as a pooling of money by shareholders into a legal, protected entity run by managers and directors, hopefully to the benefit of the investors but too often with an unsettled trust in the board. Limiting the shareholder?s personal liability to their investment undoubtedly has nourished the growth of corporations, jobs and the economy. But it is bittersweet, as Bakan notes the hyping of worthless stock and corporate fraud that facilitates the wealth of those extracting enormous and unjustified salaries and perks. As well, he notes that ?? over the last 300 years corporations have amassed such great power as to weaken governments ability to control them.? But he who gives it can take it away.
Indeed congress has gotten its piece of the action as corporate leaders share part of their profits with the very politicians charged with regulating them. Some politicians even own stock in the companies they regulate.
What else would explain why congress has failed to strongly intervene in the blatant corporate corruption of late? Is there any question that, were money not changing hands at the political level, corporate CEOs would have been allowed to form sweetheart deals with the very corporate boards charged with their oversight, when instead they should be protecting the shareholders? In virtually every congressional vote, one needs only to follow the money to predict its outcome.
Bakan has many good ideas for cleaning up the corporate system, but his (and any) proposed fixes simply will not happen under the current moneyed political system. Until we stop the cash that flows from those who want laws written to those who write them, corporate abuse of shareholders and the taxpayers will continue. Only full public financing of our electoral system (at a cost of about $10 per taxpayer) will stop the abuses and the $1500 per taxpayer congress soles out each year to its funders.
In any other country we?d call our system bribery and payola; in America we call it freedom of speech. In the corporate world we fire employees who take money from vendors; in the political world we reelect them. Where are our heads?
This book is a must read for anybody interested in cleaning up the political system before we pass it on to the next generation.
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