A century and a half after its birth, the modern business corporation, an artificial person made in the image of a human psychopath, now is seeking to remake real people in its image.
The genius of the corporation as a business form, and the reason for its remarkable rise over the last three centuries, was - and is - its capacity to combine the capital, and thus the economic power, of unlimited numbers of people.
The corporation is not an independent "person" with its own rights, needs, and desires that regulators must respect. It is a state created tool for advancing social and economic policy.
The notion that business and government are and should be partners is ubiquitous, unremarkable, and repeated like a mantra by leaders in both domains. It seems a compelling and innocuous idea - until you think about what it really means.
As the corporation's size and power grew, so did the need to assuage people's fears of it. The corporation suffered its first full-blown legitimacy crisis in the wake of the early-twentieth-century merger movement, when, for the first time, many Americans realized that corporations, now turned behemoths, threatened to overwhelm their social institutions and governments.
These are the elements of an emerging order that may prove to be as dangerous as any fundamentalism that history has produced. For in a world where anything or anyone can be owned, manipulated, and exploited for profit, everything and everyone will be.
The corporation was originally conceived as a public institution whose purpose was to serve national interests and advance the public good.
By leveraging their freedom from the bonds of location, corporations could now dictate the economic policy of governments.
The corporation's legally defined mandates to pursue, relentlessly and without exception, its own self interest, regardless of the often harmful consequences it might cause to others. As a result, I argue, the corporation is a pathological institution, a dangerous possessor of the great power it wields over people and societies.
Deregulation freed corporations from legal constraints, and privatization empowered them to govern areas of society from which they had been previously been excluded. By the end of the century, the corporation had become the world's dominant institution.
Yet history humbles dominant institutions.
The corporation, like the psychopathic personality it resembles, is programmed to exploit others for profit.
Dodge v. Ford still stands for the legal principal that managers and directors have a legal duty to put the shareholders' interests above all others and no legal authority to serve any other interests - what has come to be known as "the best interests of the corporation" principal.
As institutional psychopaths, corporations are wont to remove obstacles that get into their way.
Corporations now govern society, perhaps more than governments themselves do; yet ironically, it is their very power, much of which they have gained through economic globalization, that makes them vulnerable.
As a psychopathic creature, the corporation can neither recognize nor act upon moral reasons to refrain from harming others.
