Book Review On The Corporation
Essay Preview: Book Review On The Corporation
Report this essay
British Journal of Industrial Relations
43:4 December 2005 0007—1080 pp. 729—746
Щ Blackwell Publishing Ltd/London School of Economics 2005. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
Blackwell Publishing Ltd.Oxford, UKBJIRBritish Journal of Industrial Relations0007-1080Blackwell Publishing Ltd/London School of Economics 2005December 2005434729746Book
Reviews
Book ReviewsBritish Journal of Industrial Relations
BOOK REVIEWS
The Corporation: The Pathological Pursuit of Profit and Power
by Joel Bakan.
Constable, London, 2004, 228 pp., ISBN 1 84529 079 8, ÐЈ22.46, paper.
The Corporation
is the book written by legal academic Joel Bakan to accompany the
documentary film of the same name which appeared last year. Its main claim is that
many of the ills of contemporary capitalism can be traced to the legal form of the
business corporation. This is because, Bakan argues, the corporation has a legal
mandate �to pursue, relentlessly and without exception, its own self-interest, regardless
of the often harmful consequences it might cause to others’; hence its �pathological
nature’. Chapter 1 sets out a brief history of company law, tracing the roots of the
concepts of separate personality and limited liability, and noting some of the more
perverse consequences of the US practice of regarding corporations as �persons’ under
the protection of the constitution. Chapter 2 is largely devoted to arguing that the
recent revival of the corporate social responsibility (CSR) movement has made little
difference to the underlying �pathology’ of the corporate form. Chapter 3 argues that,
while government regulations purport to control corporations and limit the harm they
cause to third parties, this goal is undermined in practice by lobbying efforts. Chapter
4 discusses corporate ambitions to take over government. Chapter 5 is concerned with
the multifarious ways in which modern marketing techniques invade the public space
and undermine the family. Chapter 6, titled �Reckoning’, sees some hope in the
activities of the anti-globalization movement.
The structure of the book follows that of the film quite closely. The film, at well
over two hours, has more space to develop its arguments, and allows greater scope
for various protagonists to put across their points of view. By comparison, the book
is highly compressed. Bakan brilliantly distils the essence of a rather complex argument
about company law into just a few pages. This leaves ample space for him to
devote to some unpleasant examples of corporate malfeasance, and for entertaining
digressions such as the tale of a failed coup against FDR.
Entertaining as it is, the book’s main claim is, at first sight, a surprising one.
Corporations, as associations with a separate legal personality from that of their
members, have been around for centuries, and while limited liability for shareholders
is a more recent phenomenon, it is hardly new. The legal doctrine according to which
companies are �persons’ with constitutional rights of their own is almost entirely a
US invention, and cannot be regarded as a universal feature of the corporate form.
A closer reading indicates that when Bakan refers to �the corporation’, he means the
�large Anglo-American publicly-traded business corporation’. This qualifies his 730
British Journal of Industrial Relations
Щ Blackwell Publishing Ltd/London