Last year at Sundance I

by francine Hardaway on September 1, 2004

Last year at Sundance I saw a film called “The Corporation,” which was a look at how and why corporations began (to fund large complex projects) and how they’ve evolved. It was pretty scary; a corporation is, by definition, an entity that came into being to organize the work of human beings. One of the earliest corporations was the Benedictine Order of the Catholic Church.

Bruce Brown, in “The History of the Corporation,” says that many corporate traditions are actually very old: the modern business suit descends from the dress of Venetian “corporados,” and the first corporate meeting was held in 1288. Who knew?

And here’s Chief Justice John Marshall’s definition in the 1819 Dartmouth College case: “A corporation is an artificial being, invisible, intangible, and existing only in the contemplation of the law,” Marshall wrote. “Among the most important [of its qualities] are immortality, and if the expression be allowed, individuality; properties by which a perpetual succession of many persons may be considered the same, and may act as a single individual…”

Brown goes on, “In a general sense, this definition fits every corporation from St. Benedict’s to Michael Milken’s. All are invisible, for although they may be mighty, they have no form unto themselves; all are individual, with identities and personalities distinct from their numberless human workers; and all can outlive and replace those same workers, just as the higher animals replace their individual constituent cells as they die or lose their effectiveness. Although corporations are themselves not made of flesh and blood, they display qualities of biological life so strongly that both Hobbes and Marshall remarked upon it.”

And that’s why we are always so angry when we come up against the fact that corporations are not always benificent. This morning in the newspaper I read that the salaries of CEOs who outsourced jobs increased 46%, compared with an average increase of 9%. I also read that corporations, acting out of fear, are sitting on piles of cash that could be spent, invested, or given back to shareholders. Arizona is not exactly the home of the Fortune 500, and the paper said that thirteen Arizona companies have at least $100 million in the bank.

At the same time, health insurance costs are rising. More people are uninsured.
Education is underfunded, causing us to lose our lead in scientific innovation.
The consumer has more debt than ever before.
The man next to me on the patio at Starbucks is complaining that he had his worst month in six years last month. I don’t know what he does, but he’s fearful.
My friend was denied training last year because her company had budget constraints, trying to make its financials look as good as possible before a planned IPO.
Dilbert is one of the most popular comic strips in America, and “The Office” is one of the funniest TV shows on the BBC.
Halliburton overcharges the government, which has to allow it because no one else can provide the same service.
There are a lot of paradoxes here. Don’t get mad at me; I’m not espousing a point of view, but just pointing out some strange circumstances: we have a lot of expectations of corporations that they cannot and do not have to deliver.

Roger Manwood, chief baron of the Exchequer, said in 1592 that what corporations lacked was a soul. Since the corporations themselves, and not their souls, were immortal, they were not held accountable to the moral standards that applied to individual people. That’s a significant legal advantage.

In fact, special dispensations, exemptions, and privileges of every kind imaginable are the life’s blood of the corporation. Corporate members enjoyed various privileges during Roman times, such as curial immunity, and organizational privileges are evident as early as 628 A.D. in the ecclesiastic orders of the Catholic Church, the first great corporations of the post-Roman era. Modern English and French law traces the secular corporation to the concept of “franchise,” which is the French Norman word for privilege. Think tax laws.

Now for the opinion. It’s time to re-examine the role and function of the corporation. Either we have to reset expectations dramatically ( the corporation is not your daddy), or find a better way to do business (the individual and the corporation are one in goals and values). The latter is happening anyway, through innovations such as strategic partnerships, outsourcing, supply chains, and virtual teams.

Perhaps the corporation is no longer the best structure for getting things done. Perhaps we need a new business entity that has a soul, or perhaps we should quit pretending that there’s any analogy between the values of human beings and those of the corporate entity. The current confusion about what corporations “should” or “should not” do has no meaning if they don’t have a soul.

Leave a Comment

Previous post:

Next post: