The Corporation

Published in 2004, The Corporation, by legal scholar Joel Bakan, demonstrates that corporations often misbehave because it is in their nature to do so. The corporate legal mandate, to pursue profit on behalf of shareholders, impels corporations to take any action, including callous, antisocial, and even unlawful behaviors, so long as they generate a profit.

Because corporations are created by governments, they are beholden to the state for their survival, yet they often manage to co-opt regulators to serve corporate agendas. They have become, in many instances, more powerful than their overseers. Bakan points out that the state retains the power to control, punish, and even kill off corporations, and that citizens should back efforts by governments to revive their authority over the behemoths of business.

Chapter 1, “The Corporation’s Rise to Dominance,” outlines the history and growth of corporations in Western society, especially in the United States, where corporate activity is at first given free rein. During the Great Depression—widely blamed on corporate misbehavior—much of that power is clawed back by the government. In the late 20th century, the political winds change, and power and freedom are returned to corporations, with decidedly mixed results.

In Chapter 2, “Business as Usual,” Bakan explains how corporations will do anything to make profits, not because their managers are evil, but because corporations must by law focus exclusively on activities that benefit shareholders. This results in corporations behaving like psychopaths—unfeeling, antisocial, manipulative, charming—that paint themselves as good and caring corporate citizens only because such a strategy generates a favorable financial outcome.

The third chapter, “The Externalizing Machine,” assembles evidence that corporations often knowingly make decisions that cause harm or death, and they continue to do so in the face of public outrage or legal penalties as long as it is profitable. A number of incidents are presented where corporations display such callousness, including use of dangerous overseas sweatshops, an automobile design that is expected to increase accidental deaths, and safety cutbacks that cause an oilfield explosion—all in the name of “externalizing” costs.

Chapter 4, “Democracy Ltd.,” lists many examples of corporate manipulation of legislators and regulators. The most common way to accomplish this is by paying them to look the other way when companies misbehave. In one infamous case, a cabal of American corporate leaders goes so far as to plot a takeover of the Depression-era Roosevelt administration.

Chapter 5, “Corporations Unlimited,” describes how corporations are changing societies to suit themselves by turning public spaces into vast marketing efforts, putting ads in children’s educational materials, and encouraging people to abandon cherished human values in favor of consumerism.

And Chapter 6, “Reckoning,” makes specific suggestions on how to wrest society and culture back from the corporations and to restrict once again the freedoms those companies have persuaded us to give them.