Behind the Mask

Attorney and author Joel Bakan argues that capitalism is beyond repair

| May / June 2006

In the eyes of the law, a corporation is a 'person.' But not one you'd want to live with. 'Most people would find its 'personality' abhorrent, even psychopathic, in a human being,' writes attorney Joel Bakan in The Corporation (Free Press, 2004), 'yet curiously we accept it in society's most powerful institution.' When a corporation starts acting warm and fuzzy toward the environment, or employees, we should beware, he says. Underneath the mask of gentility lurks the same old psychopath ready to sell the rings off his grandma's fingers. Utne editor Joseph Hart interviewed Bakan about the corporate social responsibility (CSR) movement.

You've said that there's an inherent contradiction between the corporate agenda and social responsibility. What do you mean by that?

The notion of CSR is completely out of sync with the nature of the corporation as a legal institution. What I know as an attorney is that the corporation is set up by statute so that managers and directors must serve the best interests of the shareholder. The courts have interpreted those interests as creating wealth, bottom line. So it's actually illegal for a manager or director to do anything that subtracts, at least in the long term, from shareholder returns.

But in some cases, CSR initiatives actually improve the bottom line, for example, by reducing energy costs.

That's true, and it's not necessarily a bad thing, to the extent that managers can be imaginative enough to wed shareholder interests with social interests. Many smart directors can see that they can gain competitive advantage through an image of being socially responsible, and a few have actually adopted the reality. But that's the best we can hope for. CSR can only be a strategy,not an end.

It sounds like you're saying that just appearing to be socially responsible is enough to improve shareholder interests.

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