In law, corporations are people, yet they feel no empathy, guilt or remorse. Tim Dean considers whether they could, in fact, helpfully be described as psychopaths
This article was first published in the June 2018 International edition of Accounting and Business magazine.
Psychopaths – those extremely rare people such as US serial killer Ted Bundy – are typically intelligent, personable and disinhibited, and have an alluring aura of confidence. Yet they also lack feelings of empathy, guilt and remorse. That seemingly minor emotional quirk has a dramatic impact on the way they behave, often leading to anti-social behaviour. In fact, psychopaths are around 25 times more likely to serve prison time than non-psychopaths.
However, psychopaths are not incapable of moral reasoning. Multiple studies have found they are particularly adept at certain types of moral thinking, particularly those that balance the consequences of actions. So where non-psychopaths might experience revulsion at intentionally killing one person to save the lives of several others, psychopaths are far more likely to dispassionately favour the needs of the many over the needs of the few. They make good utilitarians.
The other thing psychopaths are good at is ‘pretending’ to be good. Even without feeling genuine empathy, they can behave in seemingly altruistic ways, although closer examination shows they do so only when they believe they have something to gain. They might help someone only because they expect future reciprocation, or work to build trust so they can exploit it down the track. Psychopaths also make great Machiavellians, able to cleverly negotiate Game of Thrones-style political environments. This is why they are often thought of as morally deficient: a judgment of moral character looks beyond an individual’s actions to determine their intentions and feeling.
Now consider a corporation. Composed of many people, it is legally treated as a person too so that it can do things like own property, open bank accounts and buy and sell goods in its own right. Yet we also relate to corporations as if they are singular entities, rather than agglomerations of workers. Sometimes we even anthropomorphise the corporation – ‘hating’ a phone company, ‘liking’ a bank or wondering if a health insurer has its customers’ best interests at heart. But when the machinery of psychology is used to judge a corporation’s moral character, it can start looking a lot like a psychopath, as law professor Joel Bakan argues in his book and film The Corporation.
For a start, corporations feel no empathy, guilt or remorse. And many are explicitly established to generate a profit, so they primarily serve their own interests. Many of the altruistic acts committed by corporations may seem primarily motivated by a desire to cultivate a positive image with their customers.
What, then, do we make of a corporation that does things we consider bad even if they’re legal – such as selling a product known to be addictive and deadly, dispensing with loyal staff in favour of outsourcing to countries with far lower labour standards, or cutting costs by lowering safety rules? Right now energy companies are being criticised for hastening climate change that could impact millions of lives. And multinational corporations are being condemned for profit shifting and tax dodging. So this is far from an armchair concern; it has real effects on how we expect corporations to behave.
Mr and Ms Corporate
One approach is to swallow the corporations-as-people analogy whole and treat them as fully fledged moral persons. After all, if morality governs the actions of rational beings and if corporations effectively act as rational beings, then why shouldn’t morality govern the actions of corporations?
In the words of US philosopher Peter French, who championed this idea in the 1970s, ‘corporations can be full-fledged moral persons and have whatever privileges, rights and duties as are, in the normal course of affairs, accorded to moral persons’. So when a corporation pollutes, it’s a bad corporation and deserves to be punished, just as an individual rolling a barrel of toxic waste into a waterway would be.
It’s a view embraced by many. But the analogy with ‘real’ moral persons breaks down pretty quickly. For one thing, we can write a corporation into existence by creating a charter, but no protesters rise up to call us monsters when we ‘kill’ it by dissolving the corporation entirely. And while it makes some sense to say a corporation has interests, values and goals, it makes less sense to say it has thoughts and feelings or ‘cares’ about any of these interests, values or goals.
As Australian philosopher RE Ewin has written: ‘Corporations, unlike the people who run them, have no emotional life. Corporations operate at the level of reason and requirement, but they do not get angry at being mistreated, they are not sickened by tales of the squalor in which some people have to live, and, generally, they simply do not have the emotional life required of a being that is to care about things as things must be cared about if one is to possess a virtue.’ This is why some people consider corporations to be moral actors only in a limited sense, with rights and duties that extend only as far as their legal obligations, but no further.
Lying isn’t illegal. Neither is being rude, cheating on your partner or leaving the pub before it’s your turn to buy a round. Many acts are legal yet immoral, so you have to think about whether you’re happy with the idea that corporations are bound in their behaviour only by the strictures of the law.
Some have been very happy with that arrangement. Milton Friedman famously wrote: ‘There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.’ So it’s a big no-no for executives to go off on ethical crusades that put a dent into profits.
The weakness in this argument is the same one that exists in many of Friedman’s arguments: it’s predicated on the idea that ethics is about maximising our ability to satisfy our desires and that an open market is the optimal way to do so, thus free markets are inherently ethical – a fairly contestable argument.
Even if corporations don’t have full moral agency, people do. And people work for corporations, write their charters, fill executive chairs and own their shares. They are moral agents and can influence the corporation from within, such as by embracing the triple-bottom-line accounting framework.
People also interact with corporations, buy their products and seek their services. Even if we view corporations as moral agents, it doesn’t necessarily change how we should interact with them. We can still choose to reject one corporation and do business with another if we prefer its values.
Corporations are prudent to take these things into consideration and adjust their practices as necessary. We shouldn’t fool ourselves that all corporations engaging in charity work or promoting environmental sustainability are doing it out of pure magnanimity. But it might be worth ignoring their intentions if the outcomes are to our liking.
So as long as corporations act rationally and in accordance with the law, and we can choose to interact with those that reflect our own values, it may not matter if they are chasing their own self-interest. Corporations aren’t people, so perhaps we should judge them for what they are, rather than what psychology tells us they are.
Tim Dean is a Sydney-based philosopher and writer with a PhD in ethics from the University of New South Wales
"Lying isn’t illegal. Neither is being rude, cheating on your partner or leaving the pub before it’s your turn to buy a round"