Book Review On The Corporation

British Journal of Industrial Relations

43:4 December 2005 0007вЂ"1080 pp. 729вЂ"746

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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, Ð'Ј22.46, 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

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