Lecture on Modern Business Corporation

Introduction

• Historical Context: 150 years ago, corporations were insignificant; today, they are dominant like the church or monarchy once were.
• Questions Raised: How did corporations gain such influence beyond their original narrow legal mandates?

Scandals and Public Trust

• Recent scandals (e.g., Enron, WorldCom) have highlighted a lack of public control over corporations.
• Media simplifies corporate issues to a few "bad apples," ignoring systemic problems.
• Corporations can be paradoxical entities - creating wealth but causing harm.

Nature and Evolution of Corporations

• Corporations as legal entities: Given the rights of individuals, but with more power and no conscience.
• Evolution from being state-chartered to powerful, independent entities.
• Influence of the Industrial Revolution on corporate growth.

Legal and Historical Influences

• 14th Amendment: Originally for civil rights, utilized by corporations for legal personhood.
• Corporate Personhood: Corporations have rights similar to individuals, including limited liability.

Corporate Ethics and Responsibilities

• Corporations prioritize profits over public good due to legal obligations.
• Externalities: Corporations often externalize costs (e.g., environmental damage) to others.
• Psychopathic Tendencies: Corporations exhibit traits like lack of empathy, similar to psychopaths.

Global Influence and Corporate Power

• Corporations operate globally, reducing government control.
• Influence on trade policies and economic conditions worldwide.

Corporate Social Responsibility (CSR)

• CSR often used more as a marketing tool than a genuine practice.
• Debate over whether corporations should decide what is socially responsible.

Consumer Influence and Marketing

• Corporations shape consumer behavior through advanced marketing techniques.
• Targeting children and creating "created wants".

Privatization and Public Resources

• Debate on privatization of essential services like water.
• Case study: Bechtel's privatization of water in Cochabamba, Bolivia

Environmental and Social Impacts

• Corporations contribute significantly to environmental degradation.
• Historical examples of negligence and exploitation (e.g., Monsanto products, IBM in WWII).

Resistance and Change

• Activism has led to some regulatory changes and increased awareness of corporate malpractices.
• Global movements and collective actions challenge corporate dominance.

Conclusion

• Corporations, while integral, present challenges regarding ethical practices, environmental and social impacts.
• Reconsidering corporate roles and responsibilities in societal structures is crucial for future sustainability.