The Corporation – by Joel Bakan

The Corporation – by Joel Bakan

‘The Pathological Pursuit of Power and Profit’


This is another eye-opening book, where the author contends that the structure of companies forces them to be ‘psychopaths’ by definition: they have no regard for others, they externalise as many costs as they can, the take no responsibility, the feel no guilt or remorse, they lack empathy, the have asocial tendencies, they only relate to others superficially, and they manipulate everyone around them.


Here is a dot point summary of the book!


The Pathological Pursuit of Profit and Power



  • The corporations legally defined mandate is to pursue, relentlessly without exception,  its own self interest, regardless of the harmful consequences it might cause others


Ch1 – The corporations rise to dominance

Over 150 years the corporation has risen from relative obscurity to become the worlds most dominant institution

Today, corporations govern our lives, they determine

  • What we eat, what we wear, where we work and what we do
  • Increasingly, corporations dictate decisions of their supposed overseers in government


  • Businessmen and politicians were suspicious of the corporation when it first emerged in the 16th century
  • The ‘partnership’ was the dominant form of business, where small business would team up
  • Originally banned in England
  • Adam Smith said people cannot be trusted with other peoples money due to negligence and profusion


  • In 1720 the bubble act was passed, which made it a criminal offence to create a company presuming to be a corporate body
  • Today it Is unthinkable that government would ban the corporate form
  • Between 1720 and now, what has made the corporation so powerful?


Industrial revolution

  • In 1712 when steam driven machine was invented, steam power fueled large scale industry in England


By 1950s limited liability

  • Politicians broadly advocated changing the law to limit the liability of shareholders to the amounts they had invested in the company
  • This removed the risk of the general public in investing
  • If you invested 100$ in shares, you don’t lose any more than that, called


With limited liability in place, investors could be recklessly unconcerned about their companies fortunes

“Never mind you needn’t pay, so you can start another company tomorrow!”


People could now trade with a limited chance of loss, but an unlimited chance of gain

This encouraged speculation


In 1904

The US economy went from individually owned enterprises trading freely among themselves into one dominated by relatively few corporations, each owned by many shareholders


  • Corporations were typically the combinations of thousands, even hundreds of thousands of dispersed shareholder money
  • Unable to influence managerial decisions as individuals because their power was too diluted, they were also too broadly dispersed to act collectively
  • The loss in power of shareholder turned into managerial gains


Corporation treated as a person

  • Late 19th Century legislation
  • Like a real person, it can conduct business in its own name, acquire assets, employ workers to pay taxes, go to court to assert its rights and defend its action
  • Like a free independent being



Ch2 – Business as usual


Corporate social responsibility

  • Idea blossomed in the 1930s
  • Corporations were losing legitimacy if they didn’t at least appear to do so;;;;


Henry Ford said

“Corporations could be and should be a major force for resolving environmental and social concerns”


Milton Friedman View

  • They are good for society and too much government is bad
  • Government is inefficient


  • Corporations interests are for the stockholders

It is their job to make as much money for the shareholders, as a moral imperative

Executives who choose social and environmental goals over profits, who try to act morally, are in fact, immoral



Peter Drucker , guru of business gurus says

“If you find an executive who wants to take on social responsibilities, fire him fast

  • Corporations are created by law and imbued purpose by law. Law dictates what they must do. They must serve the interest of the shareholders


The ‘best interest of the corporation principle’

As stewards of other people money, they have no legal authority to pursue goals as ends in themselves – only as a means to serve the corporations interest, which generally means maximise the wealth of the shareholders

  • Corporate social responsibility is thus legal – when it is genuine
  • The law stops executives from being socially responsible



On Earth Day 1999, head of BP John Browne was given an award

The queen knighted his efforts

Collected an award from the UN for astonishing leadership, as he acknowledged that green house gases cause global warming, a heretical admission from an oil industry executive


  • This shows that corporations and those who run them, can genuinely care about values other than profit
  • Yet that is exactly what the law forbids, at least when such caring might diminish profitability
  • It is unable to sacrifice its own interests to realize environmental and social goals


  • Social and environmental goals are not values in themselves
  • Regardless of how sincere their personal commitment may be to the environment, CEO Browne must put his shareholders interest above all others


Drug Companies

Pfizer a drug company and its shareholders make more money from drugs that treat boldness and impotence, than they would from drugs to treat diseases such as malaria and tuberculosis, the leading causes of death in the developing world


  • However many people could be saved from horrible deaths, for profit corporations make drugs for profit. That’s the bottom line


As CEO you cannot suit your own personal thoughts or priorities


When a company floats on the stock market, you dance with the devil



The managers who do these things are not monsters, they are loving parents and friends

They are compelled by the corporations culture to dissociate themselves from their own values



Unlike the people who inhabit the corporation, it is singularly self interested and unable to feel genuine concern for others in any context

The corporations refuse to accept responsibility for their own actions and unable to feel remorse

Like a psychopath, the corporation present themselves as compassionate and concerned about others, when in fact, they lack the ability to care about anyone or anything but themselves


Ch3 – Externalizing machine



“Is the effect of a transaction, on a third party who has not consented to or played any role in carrying out that transaction”


The person whose shirt is dirtied from the power plant down the road


  • Executives have no authority to consider the effects on other people
  • Place a value In human lives in an objective manner in the cost benefit analysis



  • Kathie Lee handbags are made in a Chinese factory where employees work 14 hour days 7 days a week 30 days a month for an average of 3 cents an hour
  • Nike takes 8 cents to make a shirt that costs US 22.99$


  • Corporation like the psychopathic personality it resembles is programmed to exploit others for profit, that is the only legitimate mandate
  • Executives must serve the dehumanizing mandate
  • A corporation normally tends to be more profitable to the extent it can make other people pay the bills for society
  • Today the notion that we can take and take and waste and waste and waste without consequences is driving the biosphere to destruction


The corporations unique structure is largely to blame for the illegalities in the corporate world

By design, the corporate form generally protects the human beings who own and run corporations from legal liability, leaving just the corporation, “a person” with a psychopathic contempt for legal constraints

  • Executives are protected by the law


Only people have moral obligations, corporations don’t


Ch4 Democracy Ltd

As institutional psychopaths, corporations want to remove obstacles that are in their way

Corporations have fought with considerable success to remove them, through lobbying and political contributions


During WW2

Some major American corporations were reaping substantial profits for working for Adolf Hitler

  • General Motors owned AG, a German automobile maker manufactured trucks for the German army
  • IBM who says “if your customer needs help, you jump! ” They jumped when Hitler needed assistance in the extermination camps. They provided the Nazis with the Hollerith tabulation machines, early ancestors of computers
  • IBMs  motivation for working with the Nazis was never about Nazism, it was always about profit


Ch5 – Corporations unlimited


Ch6 – Reckoning

  • Although the collapse of corporate capitalism is not imminent, people are increasingly uneasy with the system
  • The question is, what do we do now about the corporation?


Mark ‘Communist Manifesto’ was a moral view on how to use communism

We should get something similar for capitalism


  • Corporations are a creation of the state, can they take control back?
  • As a creation of government, the corporation must be measured against the standard applicable to all government policies
  • Does it serve the public interest?
  • If corporations interests see the public good, it is advanced when the public good is served


  • If the corporation doesn’t serve the public good, like destroy the environment, then it should be put to death
  • We should be able to apply corporate charter revocation laws
  • The corporation should not be allowed to be an independent person
  • It should have one purpose, to serve the public interest


  • As a society we have created a problem for ourselves
  • We have constructed a remarkable wealth creating machine, but it is now out of control



We had the privilege of speaking to the King of Productivity, David Allen. He advocates for being stoned – not by smoking weed, but by getting everything out of your head and maximising productivity so you can be present with whatever you are doing. We delve deeper into his system and talk about the futility of ‘busyness’.


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