The Corporation - Ethical Analysis

Only available on StudyMode
  • Download(s) : 381
  • Published : April 18, 2007
Open Document
Text Preview
Traits associated to a psychopath include irresponsibility, manipulation, grandioseness, lack of empathy, asocial tendencies, inability to feel remorse, refusal to take responsibility for one's actions and superficial relations with others. Modern day corporations display every one of the previously listed characteristics. Is it right that an institution, whose power now rivals that of the State that once created it to seek the better welfare of its citizens, display the psychological traits of a dangerous personality disorder? Many say no: there is a rising discomfort with the corporation and its pervasion into every sphere of human life and it is this uneasiness that has prompted many academics to further study the corporation and its self-interested pursuits. Joel Bakan, a Canadian law professor teaching and living in British Columbia, is one of these academics and he has, in a well written, thought provoking book, attempted to demystify the contemporary corporation. The Corporation: The Pathological Pursuit of Profit and Power was written in conjunction with the filming of the documentary of the same name and in consequence, the book is filled with interesting quotes from interviews with the world's leading CEOs, anti-corporate spokespeople, economists and authors, presenting all sides of the debate on the corporation. Supported by concrete examples, Bakan delves into the world of profits at any cost, limited liability, corporate social responsibility, externalities, deregulation, privatization and the result is an eye-opening text that will make even the biggest believers in capitalism question the legitimacy of the corporation's corrupt character.

When corporations were first created in the 18th century, they were incorporated to serve public purposes like building bridges or railways. Corporate charters gave them their right to exist and set out limits on their size and the scope of their activities. These charters also limited the life span of the corporation, requiring it to be reviewed every few years to have its charter reinstated. This was a time where the State still had control on its creation. Throughout the 19th and 20th century, the corporation's power was extended through a series of legislation changes pushed by anxious businessmen. The concept of "limited liability" was introduced in the mid-19th century when the railway industry was booming. The creation of railways required more capital than previous projects and stocks began being sold to the general public and not just the wealthy to which they had previously been constrained. Poor labourers who invested small amounts in stocks were however now being held liable for the massive undertaking of a railroad and risked losing all of their belongings in the occasion of failure. Limited liability legislation was introduced to attract investment into high risk projects, such as the railways. It protected shareholders by holding them liable only to the amount which they had invested, making these risky investments more appealing to the non-wealthy. The introduction of limited liability was questioned by some, however, because "… it allowed investors to escape unscathed from their companies' failures" and therefore it was believed that "… it would undermine personal moral responsibility, a value that had governed the commercial world for centuries" (Bakan, 2005, p.12). An English parliamentary noted, when the concept was introduced, that limited liability "enabled persons to embark in trade with a limited chance of loss, but an unlimited chance of gain" (Bakan, 2005, p.13). From the moment limited liability was entrenched in corporate law, the character of the US market changed. Previously, it had consisted of numerous small, self-owned companies but it then became a market where a small number of large corporations reigned.

The next step on the corporation's path from its humble beginnings towards its terrifying present was the...
tracking img