Posted: May 13th, 2018

Law professor and legal theorist-author of corporation state

Law professor and legal theorist-author of corporation state

The Corporation John Bakan, a Canadian Law Professor and Legal Theorist, author of The Corporation states, “Corporations dictate the decisions of their supposed overseers in government and control domains of society once firmly embedded within the public sphere”. (Corporation pg 5). Bakan addresses the fact that corporation’s main concern and priority is the interest of the shareholders. The directors and managers hired to perform these duties while having the best interest of the shareholders may seem uncaring people, however they are people that are good and have morals. They have a job to do by finding the best solutions to maximizing the shareholders profits. Today, corporations have taken over society and the government by justifiable means of working the system in the way of strategies remaining within the provisions of the regulated laws. Bakan explains there is a need to find ways of regaining control. In the 1930’s corporations used corporate social responsibility as their best strategy. As they continue to use society to their advantage; their main marketing strategy today is yet again corporate social responsibility. Is it possible to have the ability to provide corporate social responsibility with all of the destruction given due to the hands of corporations to society at the same time? There are many tactics in which corporations have shown they are in control. The first is corporations have been given the opportunity to limited liability which allows the company to start over and the shareholders not having accountability for any of the debt and failure the company has created. The corporations have the ability to make many wrong decisions until they decide to give up realizing the company has failed. Limited Liability gives them an advantage of walking away from debt, securing their personal savings and starting a new business as if the last did not exist. How’s that for working the system. During the 1930’s when corporations experienced views of how the people believed they were responsible for the Great Depression. The people believed the negligence of their bad decisions, concerning only the best interest of the business led to the closing of many companies. The people believed their self-indulgence played a tremendous part. A statement was then made by Justice Louis Brandeis’s in a 1933 Supreme Court judgment, “That corporations were “Frankenstein Monsters” capable of doing evil.” (Corporation pg 19) This statement brought the attention of the people and the corporations then recognized corporate social responsibility. The corporations believed this would get the people to trust in them rather than the government. In relation to corporate society responsibility, the corporations would find ways of giving back to society with continuing their primary focus seemingly on what is best for the company. Bakan reports corporations have a “lack of empathy and asocial tendencies are also key characteristics of the corporation, says Hare (a psychologist and internationally renowned expert on psychopathy) their behavior indicates they don’t really concern themselves with their victims: and corporations often refuse to accept responsibility for their own actions and are unable to feel remorse”. (Corporation pg 57) Bakan proposes corporations are psychopaths, they tell you what you want to hear and at the same time are being deceptive. This allows them to act without a conscious and with the interest of the company and how it profits. Masquerading two faces, one for society and the true face of which they represent the corporation. Corporations have been found to put profit above safety and with the provisions given through the regulated laws; they are able to get away with how they are hurting society. For example, the case with GM and the recommendation of the fuel tank to be a certain amount of inches from the rear bumper. GM decided to place the fuel take 2 inches less than advised, when the car was struck it blew up killing and injuring passengers involved in the accident. The jury found GM liable however the US Chamber of Commerce considered the cost-benefit analysis in corporate decision making. Cost-benefit analysis is “The Corporation’s institutional makeup its compulsion to serve its own financial interests above everything else, requires executives to make only those decisions that create greater benefits than costs for their corporation”. (Corporation pg 64). Its business and has nothing to do with society. This clearly gives the corporations control over society and government with their own rules they have the ability to maneuver, but it shows the power they have created. Another example of corporations doing what they want is Kathy Lee Gifford, a mega retailer producing her line through sweat shops that are forbidden, when it was brought to her attention she pretended as if she did not know. But in all reality she not only knew she condones it in order to make a huge profit for herself. Kathy Gifford can make all the promises she wishes stating she will bring the sweat shops to an end she won’t because it will then hurt her profits. Businesses has gone as far as trying to overtake the government in the 1930’ for the reason that they did not agree with the New Deal package which is “Regulatory reforms designed to restore economic health, by amount other things, curbing the powers and freedoms of corporations”. (Corporations pg 20) This package made many business owners disappointed, giving them the basis to create a strategy to overthrow the president. The control and freedom they have become adapted has been taken away. They were now threatened by the undermining of the corporations mission. Thanks to the refusal of a honorable and decorated former U.S. Marines general Smedley Darlington Butler to combine forces with the business owners to take over the White House. General Butler’s loyalty and patriotism to America made the scheme fail. In the present day of Corporations, they have become more dominant and will soon have control. They continue to take advantage of employees, create harm and demise to the environment and deceive their fellow man due to profit. Bakan has given numerous examples of how corporations have continued to do what they want for the good of their own interest. Although they are regulated they have deregulated themselves in order to maintain maximizing profits. Such as sweatshops are continuously in operation, limited liability abused the lack of corporate social responsibility although their claims of giving back to society, deficiency of public safety, and environmental harm. These problems need to be addressed that corporations and Bakan has shared some examples in finding solutions in taking control of the unmanageable corporation. Bakan, suggests the “Improvement of the Regulatory System”. (Corporation pg 161) where the government will rethink and validate rules that will place corporations in the responsible awareness of the people, the neighborhoods and they environment in which we live. He thinks if the fines given to the corporations they so graciously are willing to pay because its more profitable to break the rules then it is to make money should be raised at a level it would hurt them to the point of choosing to follow the law. A new proposal to of protecting our environment, health and safety, should be put in place. Revising the cost-benefit analysis and including the best interest of the people first and profit second. If corporations would follow these improvements it will allow society to grow and also the profits of the corporation. The help of one could be a assist many people in creating a positive society as a whole. Bakan also suggests the “strengthening of political democracy, creating a robust public sphere and Challenging International neoliberalism”. (Corporation pg162-164) He proposes the financing of elections to be public. The people will do what is best for all people and not just for the interest of one entity which is the corporation, as they give their political contributions to receive favors and later having some control because of them. As for the robust sphere Bakan states everything that represents a group such as “Children’s minds and imagination, schools, universities, cultural institutions, water and power utilities, health and welfare services, police. Courts, prisons, firefighters, parks, natural reserves, genes and other biological materials and public space are all likely candidates”. (Corporation pg 164) These groups interest should be protected more so than corporations have been and continue to be. Lastly, Bakan brings to our attention we should come together with nation’s beliefs and the performance of international organizations with their essentials of deregulation and privatization. Bakan has achieved his goal in the dissecting of a corporation, its wrongs, how it hurts society and has given solutions that may be utilized to improve our system and realistically dominant the power of corporations. I agree that we have allowed the corporations to become the monsters they are in getting away with breaking regulations and it now time to take back control. We must not only set rules, but put the rules in to actions, not allowing them to get around them for their own benefit and hurting society in the process.

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