The Corporation: The Pathological Pursuit of Profit and Power, by Joel Bakan, has already been noticed on this site. In this review, Ted Nace of the Dragonfly Review emphasizes author Joel Bakan's skill in blending an "occasional foray into legal theory" with abilities as "a first-rate storyteller," whose "tales are compelling and even hair-raising." -- If slavery was the legal fiction that persons are property, the corporation is the legal fiction that property is a person. Acceptance of this idea has roots that go back to 16th-century Britain, but it became a full-fledged legal doctrine in the late nineteenth century. -- Through the Supreme Court's extension of the rights of persons under the U.S. Constitution to corporations (see Santa Clara County v. Southern Pac. R. Co, 118 U.S. 395 (1886), the ability of society to regulate and control corporate actions has been severely limited. In the name of "freedom," the ability of the people to constrain the power of wealth was greatly curtailed. As historian Arthur S. Link said in his classic American Epoch, "the Supreme Court by 1900 had established the right to review all state attempts to regulate railroads and corporations. This power the court had assumed as a result of one of the most important revolutions in judicial theory in American history. . . . [I]n Munn v. Illinois, 1877, Chief Justice Morrison R. Waite declared that determination of reasonable rates was a legislative, not a judicial function. This case was reaffirmed soon afterward in a series of so-called Granger cases and seemed to be firmly established as a basic principle of American constitutional law. Yet the Supreme Court completely reversed Waite's doctrine between 1886 [the date of Santa Clara County v. S. Pac. R. Co.] and 1898 [Smyth v. Ames] and transformed the Fourteenth Amendment into an instrument for the protection of corporations and railroads against 'unreasonable' regulation by the states." -- This attribution of personhood to corporations has had a profound effect on shaping American society, and through it, the political condition of the contemporary world. -- Joel Bakan's book asks: If corporations are "persons," what sort of persons are they? Bakan argues that, according to the Diagnostic and Statistical Manual of Psychiatric Disorders, the psychologists' bible of diagnosis for mental illness, corporations are psychopaths: singularly self-interested, manipulative, shallow in their relationships, and incapable of remorse or empathy toward those they injure. The most powerful "persons" in our social and political universe today are psychopaths. -- This sounds frightening, and it is. But Joel Bakan's The Corporation is not a dark book. Ted Nace observes: "Bakan ends on an optimistic note: 'No social and ideological order that represses essential parts of ourselves can last -- a point as true of the corporate order as it was for the fallen Communist one.' In other words, we may be sharing Planet Earth with a psychopath that has gained superhuman powers. But as long as we retain our own humanity, there is still hope"...

By Ted Nace

Dragonfly Review (republished by Alternet)
June 11, 2004

In 1838, when a man named John Sanford assaulted the wife and children of a man named Dred Scott, Scott sought help from the courts.

But Scott was black and Sanford was white. Supreme Court Justice Roger B. Taney explained the difference with cold, pedantic clarity, writing that Scott and his family were "beings" rather than legal persons, since "they had no rights which the white man was bound to respect." In short, before the eyes of the law, their existence was no more compelling than that of a teacup or a canary.

No corporation has ever suffered such an indignity. From the thump of a bureaucrat's stamp that brings it into existence, every corporation by definition enjoys the status of legal personhood that Dred Scott could only dream of. As one T-shirt slogan puts it, "Slavery is the legal fiction that a person is property. The corporation is the legal fiction that property is a person."

Corporate personhood traces back to the invention of corporations in Britain in the 1500s. What's new in the past century is that courts have extended the idea of "personhood" considerably further than mere legal recognition, adding various Bill of Rights protections such as freedom of speech (thus thwarting campaign finance reform laws), the right to privacy (frustrating government safety inspectors), and so on.

Having bulked up on legal steroids, corporations are now capable of feats no mortal can match. They can shape-shift, morphing into new entities at will. They're immortal, outliving generations of humans. They can teleport, dissolving in one country only to reappear in another.

None of these powers is inherent in the corporate form; each is the result of specific legal victories by corporate attorneys. Critics decry the steady encroachment of corporate power on democracy, yet the advance continues as global trade agreements define still more corporate rights and create institutional mechanisms to implement them.

In The Corporation: The Pathological Pursuit of Profit and Power (Free Press, $25), which formed the basis of the research and writing for the film The Corporation (co-created with Mark Achbar), legal theorist Joel Bakan adds a new twist to the debate over corporate personhood. Rather than taking us through the labyrinths of corporate legal personification, Bakan instead poses a simple question: OK, so a corporation is person. But what kind of person?

Bakan suggests that society answer this question by giving the corporation the same sort of routine quiz employers use to spot potentially good workers and avoid hiring nut cases. His aim isn't to pump the bottom line or to put any particular corporation on the couch. It's the corporation as an institution that he's intent on scrutinizing, using a book found on the desks of psychoanalysts everywhere -- The Diagnostic and Statistical Manual of Mental Disorders, or DSM. First published in 1952, the DSM is now in its fourth edition, with 382 distinct diagnoses. Of course, none of these entries was conceived as a way of diagnosing an institution. But Bakan finds a trait-by-trait match between the standard actions of corporations and the diagnostic criteria of a psychopath.

Like the classic psychopath, corporations are singularly self-interested, driven solely by the profit motive. They're manipulative, even toward children. And they're shallow in their relationships, laying off workers and wasting communities, incapable of remorse or empathy toward those they hurt. When breaking laws such as pollution controls appears to cost less than obeying such laws, they routinely break the laws.

But wait. Isn't Bakan being a bit too harsh? What about the symphonies and libraries funded by corporations? The scholarships, homeless shelters, public radio shows?

Bakan doesn't deny that most corporations have embraced the practice of doing good works. But he cites two key legal cases to explain what "corporate responsibility" really means.

The first is Ford v. Dodge (1919), in which the Michigan Supreme Court ruled that profit maximization must be considered the sole criterion for corporate actions.

The second is the Hutton decision, a 19th-century British case brought by stingy shareholders who were angry at a railway company for paying for occasional tea parties for its porters. In allowing the practice to continue, the court ruled that acts of charity are permissible if they serve a bottom-line interest such as securing employee loyalty or burnishing a company's public image.

But the wary reader need not fear the occasional foray into legal theory. Bakan is a first-rate storyteller, and his tales are compelling and even hair-raising.

One such story -- well documented but certainly not found in high school textbooks -- concerns the attempt by a group of Wall Street businessmen to organize a fascist takeover of the United States government in 1933. The plot, a reaction to Franklin Roosevelt's New Deal, collapsed after being exposed by Gen. Smedley Butler, the Marine hero the group had recruited to handle the coup's military aspects.

Turning to the present, Bakan sees an even worse threat in the steady seepage of corporate values into the smallest, most intimate spaces of culture. He describes the "Nag Factor," a marketing strategy based on careful studies of the ways children cajole parents into buying products. There is the "persistent whine," effective with "indulgers." Or the "nag with importance," effective with parents who want a "good reason for buying something for their child."

To some, the fact that highly educated marketing professionals are spending their days crafting ad campaigns that attempt to match the right sort of nag to the right sort of parent may seem more an annoyance than a threat. But to Bakan, such examples of moral autism, multiplied through every relationship and across every level of society, are hollowing out the very core of civilization.

In its closing pages The Corporation offers a different vision. "The best argument against corporate rule," Bakan writes, "is to look at who we really are and to understand how poorly the corporation's tenets reflect us." Quoting scientist and activist Mae-Wan Ho, he goes on, "We are basically organisms of feeling, of empathy." Bakan ends on an optimistic note: "No social and ideological order that represses essential parts of ourselves can last -- a point as true of the corporate order as it was for the fallen Communist one."

In other words, we may be sharing Planet Earth with a psychopath that has gained superhuman powers. But as long as we retain our own humanity, there is still hope.

--Ted Nace is the author of Gangs of America: The Rise of Corporate Power and the Disabling of Democracy* (Berrett-Koehler, 2003).