The Corporation: The Pathological Pursuit of Profit and Power [Paperback]

Joel Bakan (Author)

Book Description

Release date: March 1, 2005

Over the last 150 years the corporation has risen from relative obscurity to become the world's dominant economic institution. Eminent Canadian law professor and legal theorist Joel Bakan contends that today's corporation is a pathological institution, a dangerous possessor of the great power it wields over people and societies.

In this revolutionary assessment of the history, character, and globalization of the modern business corporation, Bakan backs his premise with the following observations:

• The corporation's legally defined mandate is to pursue relentlessly and without exception its own economic self-interest, regardless of the harmful consequences it might cause to others.

• The corporation's unbridled self-interest victimizes individuals, society, and, when it goes awry, even shareholders and can cause corporations to self-destruct, as recent Wall Street scandals reveal.

• Governments have freed the corporation, despite its flawed character, from legal constraints through deregulation and granted it ever greater authority over society through privatization.

But Bakan believes change is possible and he outlines a far-reaching program of achievable reforms through legal regulation and democratic control.

Featuring in-depth interviews with such wide-ranging figures as Nobel Prize winner Milton Friedman, business guru Peter Drucker, and cultural critic Noam Chomsky, The Corporation is an extraordinary work that will educate and enlighten students, CEOs, whistle-blowers, power brokers, pawns, pundits, and politicians alike.

Editorial Reviews

From Booklist

*Starred Review* Bakan, an internationally recognized legal scholar and professor of law at the University of British Columbia, takes a powerful stab at the most influential institution of our time, the corporation. As a legal entity, a corporation has as its edict one and only one goal, to create profits for its shareholders, without legal or moral obligation to the welfare of workers, the environment, or the well-being of society as a whole. Corporations have successfully hijacked governments, promoting free-market solutions to virtually all of the concerns of human endeavor. Competition and self-interest dominate, and other aspects of human nature, such as creativity, empathy, and the ability to live in harmony with the earth, are suppressed and even ridiculed. Bakan believes that, like Communism, this ideological order cannot last and that corporate rule must be challenged to bring balance and revive the values of democracy, social justice, equality, and compassion. This eye-opening look at a system "programmed to exploit others for profit" has been made into a provocative film documentary that could be the next Bowling for Columbine. David Siegfried
Copyright © American Library Association. All rights reserved --This text refers to an out of print or unavailable edition of this title.

Review

"Bakan does such a good job of creating awareness that [The Corporation] can't help but be a call to action."

-- USA Today

"The corporation, according to Joel Bakan, is the monster that can swallow civilization -- greedy, exploitive, and unstoppable. We are all its potential victims, which is why we must all understand how the corporate form makes it so difficult to control its abuses."

-- Alan M. Dershowitz, Felix

"This incisive study should be read carefully and pondered. And it should be a stimulus to constructive action."

-- Noam Chomsky, Ph.D., professor of linguistics, MIT, and author of 9-11

See all Editorial Reviews

Product Details

• Paperback: 240 pages
• Publisher: Free Press (March 1, 2005)
• Language: English
• ISBN-10: 0743247469
• ISBN-13: 978-0743247467
• Product Dimensions: 8.5 x 5.5 x 0.6 inches
• Shipping Weight: 9.6 ounces (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (75 customer reviews)
• Amazon Best Sellers Rank: #181,572 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Most Helpful Customer Reviews

177 of 189 people found the following review helpful

5.0 out of 5 stars Striking thesis convincingly presented July 22, 2004

By Dennis Littrell HALL OF FAMETOP 500 REVIEWERVINE™ VOICE

Format:Hardcover

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.

--Dennis Littrell, author of "The World Is Not as We Think It Is" Read more ›

49 of 51 people found the following review helpful

5.0 out of 5 stars The Corporation is a Sociopath October 6, 2004

By The Spinozanator VINE™ VOICE

Format:Hardcover|Amazon Verified Purchase

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. Read more ›

72 of 80 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

By Jack E. Lohman

Format:Hardcover

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. Read more ›