The Corporation a person and a psychopath?

March 16, 2004

The new documentary The Corporation joins the healthy tradition of liberal tabloidism as made famous by people like Michael Moore and Naomi Klein. Found via: Knowitallgirl .

In law, the corporation is a person.

But what kind of person is it?

Their twist is that they run a standard test for antisocial behavior on their definition of what a corporation is. Now lets examine some of their points.

The Corporation as a Person

First of all a Corporation is not a person in the eyes of the law. It is what is called a legal entity which has certain properties that have traditionally been called “Artificial Person”. What does this mean? It means that a corporation can own property, can sign contracts, can be taxed and can be sued in the same way that a person can.

Is this bad? These rules with their source in common law where in the 1800s put into civil law in many jurisdictions around the world. These concepts together with the additional concepts of Transparency helped the following amongst other things:

• Industrial revolution
• Most successfull colonies
• The growth of living standards for people in the West
• The growth of living standards in Asia and Latin America
• Modern American Entrepreneurialism

These laws made it practical for the proverbial little people to become capitalists and essentially are what differentiates investing in a company on NASDAQ from wiring money to the son of the late president Abacha of Nigeria.

So the rights of the Artificial Person are rights that dont turn them into persons but rights that protect the persons who invest in them as well as the persons who work for them and do business with them. If it werent for these rights, wronged workers couldn’t sue their employers, suppliers couldn’t sue their customers for non payment and lets face it there would be a lot less people sitting behind desks receiving a monthly paycheck.

According to the Peruvian economist Hernando de Soto the main problem of developing countries is the lack of this kind of protection for the property of normal people.

In the developed world we have these kind of protections and take them for granted. They have provided us directly or indirectly all the riches and benefits we have of living in these countries.

A Certified Psychopath

The documentary makes the point that corporations are psychopaths according to the World Health Organization ICD-10 Manual of Mental Disorders DSM-IV, which isn’t available online at the moment. However the diagnostic criteria they used are the same as these on mentalhealth.com which cover Antisocial Personality Disorder and I believe is based on the WHO criteria:

1. callous unconcern for the feelings of others;
2. gross and persistent attitude of irresponsibility and disregard for social norms, rules and obligations;
3. incapacity to maintain enduring relationships, though having no difficulty in establishing them;
4. very low tolerance to frustration and a low threshold for discharge of aggression, including violence;
5. incapacity to experience guilt and to profit from experience, particularly punishment;
6. marked proneness to blame others, or to offer plausible rationalizations, for the behavior that has brought the patient into conflict with society.

Their version is: (see synopsis)

1. Callous unconcern for the feelings of others
2. Incapacity to maintain enduring relationships
3. Reckless disregard for the safety of others
4. Deceitfulness: repeated lying and conning others for profit
5. Incapacity to experience guilt
6. Failure to conform to social norms with respect to lawful behaviors

As anyone can see there are various changes done to it including inventing the 4th point which more accurately describe their own project than your average corporation.

Lets for a moment assume that the producers of the documentary are correct in defining a corporation as a person, lets then examine the corporation. But first wait a minute what corporation? The producers stereotype of a corporation? An average corporation? What? So it seems they have used the first rule of sensationalist gutter journalism, take a wild stereotype accept it as common truth and not question sources.

What we can do is go through each of the criteria above and analyze them in relation to the duties of a corporation in most countries in the world:

1. Callous unconcern for the feelings of others

A corporation is generally required by law to have a singular purpose. This purpose generally speaking for public companies is to provide profit for the shareholders. The requirement for this purpose clause is to protect the investors (the shareholders) from criminal officers using their funds for unintended purposes.

A corporation is thus not set up to protect the feelings of others. A corporation may put in their purposes a clause about social responsibility if they wish and that might make a good selling point for certain types of investors.

The producers like this so much they listed it twice albeit with slightly different wording:

Reckless disregard for the safety of others

2. Incapacity to maintain enduring relationships, though having no difficulty in establishing them

Firstly the producers left out the final part of this sentence. I assume they are talking about the ability of corporations to lay off employees. Their intention however is unclear.

As an artificial person a corporation can go into contracts. Their relationships are by definition governed by these contracts. Not by feelings. Thus as long as a corporation is not in breech of contract it is fine.

The WHO definition is based on personal relationships and not on legal relationships, so it is highly irrelevant.

3. Reckless disregard for the safety of others

See point 1. But here they take point 1 one step further and add potential violence. What are they trying to say here? Of course there are corporations who do questionable things, but are they really trying to say that your average corporation send out hired killers? I know that might be true if you quote Michael Crichton movies as fact.

4. Deceitfulness: repeated lying and conning others for profit

Maybe they are talking about “Big Picture Media Corporation” the company who I guess produced their documentary. They are definitely the owners of record for their domain name. This is nowhere to be found in the WHO criteria, which means they invented it and lied about to con others for profit.

5. Incapacity to experience guilt

As before the producers left out the second part of the sentence as well.

As corporations are not Natural Persons they can not experience guilt. They can however learn from experience which is in the WHO criteria. They learn from experience or else they die. Why else do we have annoying legal disclaimers on everything we buy? Why else did Ford start selling cars with more than one colour? This is again highly ludicrous.

6. Failure to conform to social norms with respect to lawful behaviors

As a legal entity supported and created under law the corporation must follow the norms, rules and obligations of society or it will be dissolved.

There are definitely companies that dont follow the rules of law. It is up to the wronged parties to sueing them under said laws. Thus the problem is a problem with compliance and not with corporations as a whole. Not all Natural Persons follow the law, does that mean we should ban them? Stalin and Lenin thought so…

One they missed: marked proneness to blame others, or to offer plausible rationalizations, for the behavior that has brought the patient into conflict with society.

This might describe your average anti corporation, anti globalization activist, so I suppose they had to leave out as it was too close to home.

A specter is haunting America - the specter of POCLAD

POCLAD the group that inspired the documentary have made it their mission to “redemocratize” America by getting rid of the Corporation. The site reads pretty much like Marx and Engels. Respouting many of the ideas that later caused the deaths of 100s of millions of people. Compare for example:

But when the joy of victory fades, imperial corporations remain. Slowed in one place, they pop up in another. They’re in our schools, town halls, statehouses, and Congress. They block sane, logical transitions in food, energy, transportation, healthcare, finance, forestry, and manufacturing. They fund think tanks and universities to frame public debate. They buy obedience and define society’s values.

They also instruct and control the government. It’s nothing personal, of course. But when they control our government-officials, judges, police, and the military all paid with our money-they make us into colonized subjects all over again. The United States got rid of kings long ago. It’s supposed to be “We the People” now, or so we thought. POCLAD Manifesto 2003

With this golden allthough blood dripping classic:

The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left no other nexus between man and man than naked self-interest, than callous “cash payment”. It has drowned out the most heavenly ecstasis of religious fervor, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom ? Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation. Marx and Engels 1848

Surely we can …

So how does POCLAD imagine the world without Corporations? They helpfully answer that in the FAQ:

3. I don’t get it.. Corporations as they now exist deliver almost everything we need and want. How could we manage without them?

bq. Response: We’re a pretty amazing species, don’t you think? Surely we can design (and have in the past and even in the present) alternative forms in which to produce our basic needs and some of our wants. Admittedly, it’s the decision-making processes to get us there that will be the larger challenge.

In other words they have no idea. Growing up amongst Marxists and being one myself at an earlier more naive age, I do remember this line of reasoning well. When the annoying conservatives asked us how would we fund our ambitious programs, we would answer that we just would, because it is a moral issue. In other words we didnt answer the question, because we didnt have answers. These are the mind patterns that go with the territory of being a Marxist (crypto or otherwise).

The last sentence in the answer is even more cryptic and probably indicates that its for the best if the people through their democratic government plan the production for the needs of their people. Sorry if I am imagining this, but this brings to mind the managed famine against the “Antisocial” self employed peasants of Ukraine in 1921-23 and later 1932-33 which had the exact same reasonings behind it.

What would happen if we got rid of the psychopathic corporation?

This might sound alarmist, but everytime a group of better knowing intellectuals such as POCLAD go down this route and actually succeed it causes untold amounts of death and destruction. Think about this? What happens to the people working for these evil corporations? What happens to the small business owners who are also corporations? What happens with the billions of dollars of retirement funds that people have invested in psychopathic corporations? I suppose the government can always pay more social security. With money earned from income taxes of the psychopathic corporations??? No, wait a minute. Personal income tax then?? oh they are all on wellfare.

Will the POCLAD dominated US require that all nations who trade with the US do the same? Then what happens with all the people working hard to make a living in the far east, Honduras, Panama or elsewhere? Is it back to subsistence farming? Then we definitely will have famines at the same scales or larger of Lenin and Stalins inventions.

The great news is that POCLAD is sure we’ll find a way… That makes me feel all safe and happy.