Monday, November 29, 2010

Corporations: psychopathic individuals or totalitarian regimes?

The 2003 documentary The Corporation outlined a critical history of these institutions that have so pervasively shaped modern society. The narrative briefly outlines the historical process through which corporations gained many of the same legal rights as natural persons before asking the illuminating question: if the corporation is indeed to be considered a person, then how might we characterise the psychology of this "person"? To answer it, the film compares the track record of corporate behaviour against a widely accepted list of symptoms of psychopathy from DSM-IV: callous disregard for the feelings of other people, the incapacity to maintain human relationships, reckless disregard for the safety of others, deceitfulness (continual lying to deceive for profit), the incapacity to experience guilt, and the failure to conform to social norms and respect for the law. The conclusion (and the film's punch line): corporations frequently exhibit psychopathic behaviour.

A second comparison I came across recently juxtaposes transnational corporations with nation states. Large corporations encompass more employees and generate more turnover than the population and GDP of some nations. We consider it valid to evaluate the form of government, economic system and the political and civic freedoms of nations. What would it be like to make the same considerations of many large corporations?
• The right to vote does not exist except for share holders (analogous to land owners) and even there voting power is in proportion to ownership.
• All power issues from a central committee.
• There is no balancing division of power. There is no fourth estate. There are no juries and innocence is not presumed.
• Failure to submit to any order may result in instant exile.
• There is no freedom of speech.
• There is no right of association. Even romance between men and women is often forbidden without approval.
• The economy is centrally planned.
• There is pervasive surveillance of movement and electronic communication.
• The society is heavily regulated, to the degree many employees are told when, where and how many times a day they can go to the toilet.
• There is little transparency and something like the Freedom of Information Act is unimaginable.
• Internal opposition groups, such as unions, are blackbanned, surveilled and/or marginalized whenever and wherever possible.

- From here.

So, are large transnational corporations more like psychopathic individuals or totalitarian regimes? And is anyone aware of insightful theological analyses of corporatism?


Andy S said...

Hi Byron, I heard a talk recently on corporate finance by Dr Michael Black (from Blackfriars Hall) at the GradCU here - he had a very strange view of how the Spirit works in corporations...apparently even ones with objectives antithetical to character and desires of God (and he didn't explain how he thought God's justice worked now/later in relation to these corporations)...anyway Blackfriars seems to have a lecture series coming up which may be of interest to you. Thanks again for your blog!

byron smith said...

Andy - Thanks for the tip. Any idea whether this series will be recorded?

Mister Tim said...

I tend to agree with you in part, but I don't think the comparisons are quite fair. A few points:

The right to vote does not exist except for share holders (analogous to land owners) and even there voting power is in proportion to ownership.

I don't think that's a fair comparison. In a democracy, everyone gets to vote in proportion to their ownership - i.e. one person one vote. This is because we have governments of the people, not just managers of the land.

And for the rest of the items on your list, some of those may be true of some companies, but certainly not all. For example, some companies actually make a point of workplace democracy and not just issuing orders from on top. Some, albeit not very many, do welcome the role unions can play. Also, I think it's fair to say that companies can be held to account by the media, courts and ultimately consumer power in a way that governments often can't.

But perhaps a more ideological take: the hands off regulation of companies is more to do with the preservation of private property. A company isn't like a government because it isn't an automatic or natural institution for governing the people. A company is created and owned by people to make something, offer services and probably make a profit.

Arguments that companies are like nation states due to the size and amount of money can then either be dismissed because it's just a question of scale, but the initial principle stays the same, or from the other point of view, are proof that the original principle doesn't scale.

I'm probably more sympathetic to the view that companies are more like private property than they are like governments, but do feel that there is scope to hold them to account via the rule of law and other social means, including purchasing power.

Anonymous said...

The questions: who is the person on top?

The problem is that there is no accountability for the middle or upper management. They can get away as much as they want.

Jonathan said...

Thinking of the personality of a corporation makes sense because we relate to them as persons, legally and in many ways. I have trouble even understanding how a corporation can be thought of as a nation-state. But perhaps that's part of the point?

Andy S said...

Sorry Byron, no idea!

Unknown said...

Any lawyer will tell you that Corporate Personality is a convenient legal fiction (one among many), and that a lot of our challenges arise from trying to treat one-man companies the same as trans-nationals. (The reporting and compliance obligations are different, but the substantive ability to execute a contract is the same).

Food for thought:
(a) How many other parts of our lives that we take for granted rely on similar 'legal fictions'?

(b) What was it like to do business before James I created a limited liability construct?

(c) Why would Australian law explicitly say that the primary obligation of a company is to its shareholders? (apart from receivership laws).

(d) How much of the history and development of Western limited liability structures is intertwined with coffee?

byron smith said...

CP: A different kind of corporation explicitly allowed to take all stakeholders into consideration, not just shareholders.

byron smith said...

Monbiot: A monstrous proposal. Monbiot suggests the extension of FOI to public companies (with certain limits).

byron smith said...

The Conversation: Reward execs for sustainable practice. I'm not convinced about this, not least in the light of the arguments of this book.

byron smith said...

Grist: CEO paid US$5.5 million per hour. Admittedly only for eight hours, but still, nice work if you can get it.

byron smith said...

Guardian: Corporate sins, by new Archbishop of Canterbury, Justin Welby. I love it. This is so important and I love the fact that he's serious about consequences that go beyond tiny fines for serious corporate criminal behaviour.

byron smith said...

Truth Out: 9 out of 10 criminal corporations support Republicans.

"Ninety percent of the corporations that were criminally convicted between 1989 and 2000 donated overwhelmingly to the Republican Party in 2012.

"A study by the Corporate Crime Reporter, Russell Mokhiber, found that, “Ten out of the current top 100 donors to the 2012 political campaign have ple[a]d guilty to crimes.” The criminal-convictions file that was considered in his study included convictions during the ten years between 1989 and 2000."