The Corporation: The Pathological Pursuit of Profit and Power

A heavily researched profile of the modern corporation theorizes that businesses are essentially pathological in nature and place profits above accountability, citing the flaws of such practices as deregulation and privatization while outlining a program of democratic control and social responsibility. Reprint. 20,000 first printing.

"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

Auteur

Joel Bakan is professor of law at the University of British Columbia. A Rhodes Scholar and former law clerk to Chief Justice Brian Dickson of the Supreme Court of Canada, he holds law degrees from Oxford, Harvard, and Dalhousie Universities. An internationally renowned legal authority, Bakan has written widely on law and its social and economic impact. He is the cocreator and writer of a documentary film and television miniseries called The Corporation, which is based on the book.

Texte du rabat

This powerhouse of a concept contends that the corporation is created by law to function like a psychopathic personality, whose destructive behavior, if unchecked, leads to scandal and ruin.

Résumé
The inspiration for the film that won the 2004 Sundance Film Festival Audience Award for Best Documentary, The Corporation contends that the corporation is created by law to function much like a psychopathic personality, whose destructive behavior, if unchecked, leads to scandal and ruin.

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.

Échantillon de lecture
Chapter One: The Corporation's Rise to Dominance

Over the last 150 years the corporation has risen from relative obscurity to become the world's dominant economic institution. Today, corporations govern our lives. They determine what we eat, what we watch, what we wear, where we work, and what we do. We are inescapably surrounded by their culture, iconography, and ideology. And, like the church and the monarchy in other times, they posture as infallible and omnipotent, glorifying themselves in imposing buildings and elaborate displays. Increasingly, corporations dictate the decisions of their supposed overseers in government and control domains of society once firmly embedded within the public sphere. The corporation's dramatic rise to dominance is one of the remarkable events of modern history, not least because of the institution's inauspicious beginnings.

Long before Enron's scandalous collapse, the corporation, a fledgling institution, was engulfed in corruption and fraud. Throughout the late seventeenth and early eighteenth centuries, stockbrokers, known as "jobbers," prowled the infamous coffee shops of London's Exchange Alley, a maze of lanes between Lombard Street, Cornhill, and Birchin Lane, in search of credulous investors to whom they could sell shares in bogus companies. Such companies flourished briefly, nourished by speculation, and then quickly collapsed. Ninety-three of them traded between 1690 and 1695. By 1698, only twenty were left. In 1696 the commissioners of trade for England reported that the corporate form had been "wholly perverted" by the sale of company stock "to ignorant men, drawn in by the reputation, falsely raised and artfully spread, concerning the thriving state of [the] stock." Though the commissioners were appalled, they likely were not surprised.

Businessmen and politicians had been suspicious of the corporation from the time it first emerged in the late sixteenth century. Unlike the prevailing partnership form, in which relatively small groups of men, bonded together by personal loyalties and mutual trust, pooled their resources to set up businesses they ran as well as owned, the corporation separated ownership from management -- one group of people, directors and managers, ran the firm, while another group, shareholders, owned it. That unique design was believed by many to be a recipe for corruption and scandal. Adam Smith warned in The Wealth of Nations that because managers could not be trusted to steward "other people's money," "negligence and profusion" would inevitably result when businesses organized as corporations. Indeed, by the time he wrote those words in 1776, the corporation had been banned in England for more than fifty years. In 1720, the English Parliament, fed up with the epidemic of corporate high jinks plaguing Exchange Alley, had outlawed the corporation (though with some exceptions). It was the notorious collapse of the South Sea Company that had prompted it to act.

Formed in 1710 to carry on exclusive trade, including trade in slaves, with the Spanish colonies of South America, the South Sea Company was a scam from the very start. Its directors, some of the leading lights of political society, knew little about South America, had only the scantiest connection to the continent (apparently, one of them had a cousin who lived in Buenos Aires), and must have known that the King of Spain would refuse to grant them the necessary rights to trade in his South American colonies. As one director conceded, "unless the Spaniards are to be divested of common sense...abandoning their own commerce, throwing away the only valuable stake they have left in the world, and, in short, bent on their own ruin," they would never part with the exclusive power to trade in their own colonies. Yet the directors of the South Sea Company promised potential investors "fabulous profits" and mountains of gold and silver in exchange for common British exports, such as Cheshire cheese, sealing wax, and pickles.

Investors flocked to buy the company's stock, which rose dramatically, by sixfold in one year, and then quickly plummeted as shareholders, realizing that the company was worthless, panicked and sold. In 1720 -- the year a major plague hit Europe, public anxiety about which "was heightened," according to one historian, "by a superstitious fear that it had been sent as a judgment on human materialism" -- the South Sea Company collapsed. Fortunes were lost, lives were ruined, one of the company's directors, John Blunt, was shot by an angry shareholder, mobs crowded Westminster, and the king hastened back to London from his country retreat to deal with the crisis. The directors of the South Sea Company were called before Parliament, wh…