UBC Reports | Vol. 50 | No. 3 | Mar. 4, 2004

The Pathological Pursuit of Profit and Power

UBC law professor Joel Bakan has a hit movie on his hands.
The Corporation, which Variety calls a "cogent, entertaining, even rabble rousing indictment of perhaps the most influential institutional model of our era," has won critical acclaim, audience appreciation and awards from such film festivals as the the International Documentary Festival in Amsterdam and the Sundance Film Festival in Park City, Utah.

It is currently playing in a number of Canadian centres, including Vancouver, and will be released in select U.S. cities in June.

Penguin Group has just released Bakan's book, The Corporation: The Pathological Pursuit of Profit and Power, upon which the film is based to Canadian bookstores; Simon and Schuster will do the same in the U.S. later this month.

Bakan recently sat down with UBC Reports to talk about the unique project.

Q. The film deals with a phenomenon so pervasive that it is difficult to see. What first inspired you to tackle this?

Around 1996, I realized the world was changing in some profound ways. Corporations were being transformed from economic institutions into governing institutions, ones that were governing societies and the lives of individuals in ways that they had never done before.

At the same time, I thought, people know very little about the corporation as an institution. We are aware necessarily of corporations; they touch every aspect of our lives. But we don't understand how the corporation operates as an institution -- and, as corporations gain more power over our lives and societies, we really need to, especially in light of the corporation's peculiar institutional character, which, in the book and the movie, we liken to that of a psychopath.

Q. The climate when you started this project was quite different than today, given recent scandals like Enron. Even six or seven years ago, CEOs were still being hailed as heroes.

Well, I'd like to say we were prescient. But we may have just been lucky in terms of the timing. Certainly around 1997, several things were clear. One is that due to the processes of economic globalization, privatization, deregulation and relaxation of merger and acquisition requirements, corporations were becoming much larger and much more powerful than they had ever been. They were operating on an international scale and they were pressuring governments in ways that they had never had the capacity to pressure them before. So the corporation was truly looking like it was becoming the world's dominant institution.

At the same time, government was in rapid retreat from its traditional role of providing checks and balances on corporate power through deregulation, and, through the process of privatization, governments were handing over to corporations authority over the fundamental institutions of civil society.

None of this was going unnoticed by the citizenry. This was also the moment when the anti-globalization movement really gained momentum. The first major demonstration in North America was on this campus in response to the APEC meeting.

And people in the business world were responding, both to the new powers and freedoms of corporations and to the dissent in the streets. This is the time business people really started to embrace corporate social responsibility. 'Well, we have all this power, and people are getting mad at us,' they seemed to be saying. 'So we better be more socially responsible, or at least appear that way.'

So a lot was going on. It made sense to start a project aimed at understanding the corporation's institutional nature and impact.

Q. You make the analogy that the corporation is a psychopath. Can you explain?

A psychopath is defined as a person who is pathologically self-interested, lacks the capacity to be concerned about others, lacks the capacity to feel guilt or remorse when others are harmed, and lacks the capacity to feel any moral obligation to comply with legal or social norms.

A corporation is a legal person that is programmed to only be able to serve its own self-interests and that lacks the capacity to be concerned about others as an end in itself. And I thought, well, that's interesting -- you have this legal person created that has been given the personality of a psychopath.

This is particularly noteworthy at a moment in history when corporations are becoming so powerful. Here we, as a society, have created our dominant economic institution in the image of a psychopath. And now we are giving it the power to control our societies.

Q. A lot of people hear about corporate social responsibility and think -- this is great, they're making great strides. But it's not really quite that simple, is it?

I think it's better that corporations try to be socially responsible than not. It's better that we as consumers and investors try to be ethical and socially responsible than not. And I think there are some very sincere and committed people within the business world who want to push the envelope as far as it can be pushed in terms of trying to do good.

But there is still an envelope there. Ultimately corporate directors and managers are legally incapacitated from pursuing social and environmental goods unless they can make the case that such actions will lead to more profit, corporate social responsibility must always be a means to the self-interested ends of the corporation. And that imposes profound limits on how far it can be taken.

Ultimately we need democratic legal regulation of corporations. We can't simply put our faith in markets or benevolent CEOs to stop the spiral towards ecological disaster, and corporate assaults on human welfare and rights.

Q. Mark Achbar told The Globe and Mail "we have to force corporations to be sustainable."

I can't come up with a five-year plan as to what we need to do. But I think there are certain principles and one of them is that we need to have structures in place where citizens actually participate in shaping the world that they live in, democracy, in other words.

Whether that means that we have to abolish corporations or we have to impose greater constraints on corporations or we have to re-engineer the corporation so that it's designed to serve public interests rather than only private interests, or some combination of all of that, I don't really know. What I do know is that we need to reinvigorate our sense as individuals of citizenship and do what we can do and what we have to do, to try to regain control of corporations democratically.

Q. When you look back at the project, is there one thing that stands out as the most disturbing?

Actually I was pleasantly surprised -- pleasantly surprised by the humanity of many of the people we encountered along the way. The lesson that I learned is that it's very hard to take people's humanity away. They remain human beings even if what they're doing in institutional contexts, in particular that of the corporation, is quite inhuman. To me, that's very hopeful.