Are corporations psychopathic? by MT Nguyen, NYC

The conceit of the popular documentary “the Corporation” is that corporations are psychopathic. The documentary begins with the legal maneuvers used to baptize the corporation as a legal person. From there it goes through a list of psychopathic character traits (as given by the DSM, the psychiatric diagnostic manual), and applies each item to the corporation: no feelings of remorse, incapacity to feel guilt, habitual deception, inability to maintain social relationships, etc.. The documentary is rhetorically effective and the checklist is visually arresting, but is there a sense in which the truth is spoken?

There are the naysayers. Taken literally, they quip, the documentary’s conceit is obviously false and misguided. Corporations are not in fact persons, and thus cannot be ascribed psychological states like guilt or remorse. No wonder then that they cannot feel guilt or remorse! Only a confusion between, or willful conflation of, legal personhood and actual personhood could generate the rhetoric and conclusions of the movie.

But this is semantic quibbling. I’m sure no one, including the creators, really believes that corporations can feel guilt or have friends or have the intentions necessary to deception. This is true even if we are inclined in ordinary speech to refer to, for example, Enron’s lies or Arco’s uncaring explorations into the Alaskan tundra. What they surely meant is that the executives and the shareholders they represent collectively lied or are collectively negligent. While one may dispute the literal truth of these assertions by denying the existence of collectives, they are not the product of obvious confusion.

Be that as it may, there is one psychopathic-like trait on which all that we want to hang on the corporation rings true. This is the failure to take responsibility for the destructive outcomes of its decisions. This is really what grates at the corporation’s critics: the avoidance of blame, particularly when justified by the idea that corporations have no responsibilities other than to their shareholders. One question we can ask is: Is it true that this trait is part of the nature of the corporation?


One of the most influential proponents of an affirmative answer is the Nobel prize winning economist Milton Friedman. He was infamous for denying that corporations have any social responsibilities beyond increasing their profits. His reasoning relies upon a dichotomy: either be socially responsible or increase one’s profits. His argument focuses on the decisions of a CEO who is an employee of a publicly traded company. As such that CEO’s primary responsibilities are to the shareholders. If so, Friedman smugly declares, it would be illicit of her to use her powers to promote socially responsible activities at the expense of shareholder profit. He concludes that any social responsibilities, if the CEO wants to acknowledge them, should be undertaken as a private citizen and not as CEO.


In a recent speech entitled ‘Creative Capitalism’ given at the 2008 World Economic Forum, Bill Gates offered a different picture of the modern business. Following Adam Smith, Gates allows that businesses have a motive to supplement that of profit, a motive he called ‘recognition’. To be recognized, in Gates’s sense, is to be the object of another’s moral praise. A corporation’s recognition that recognition is a value makes it non-psychopathic, for it implies the non-instrumental value of other’s judgment. He offered numerous examples of how a company could utilize its unique competency to enhance the prospects of the world’s poor. Skeptics and all around nay-sayers immediately pounced upon Gates’ speech pronouncing that this is the same program which used to go by the name of Corporate Social Responsibility, which program had been, so the skeptics assert, thoroughly refuted. Whether Gates’ suggestions are new is irrelevant, but I don’t see how anything he said is self-refuting or amounts to socialism.

Assuming the recognitional motive, which responsibilities is a CEO (allegedly) failing when, in her role as leader and trustee, she directs some of the company’s research and development team to devote themselves to solving problems that their competence is specially honed to solving? True, their skills could be used to solve problems that could be applied to more lucrative markets, and that might be seen as irresponsible. But how could it be irresponsible to solve problems in third world markets when such markets bear a relationship to profit and recognition. As several recent books have argued, here and here, there is profit to be attained in setting up the right kind of services for such untapped markets. Even if there isn’t, however, the acquisition of recognition can rationalize such ventures.

This model of a business is not a wholesale reinvention of capitalism, but no doubt many would object to the fantasy they consider a corporation’s interest in recognition. A corporation’s interest is in being recognized, not in being worthy of recognition. The former is attainable through good public relations and high-priced lawyers, and doesn’t require the costs of aiming for the latter. With this maneuver we fall right back into psychopathy and its desire to want only to appear good, and not actually to be good.

But why does a corporation have to see things in this way? We might believe such a thing if we believed in the corporate version of ethical egoism. Ethical egoism is the view that whatever an individual does, she should do only as a means to maximizing her own interests. On some versions of this view, to demand someone behave altruistically is to demand she undermine herself, for in acting for others she would be literally acting self-lessly. Framed in this way, altruistic (non-egoistic) behavior is a non-starter, for a person would have no reason to act against her interests (broadly construed). Analogously, with the corporation. Its interests are whatever they are, and to demand that it behave with the view to enhancing social good is unreasonable, because that demands the company act against its interests; that is, demand that it act against itself.

This type of reasoning assumes that acting for the interests of others is incompatible with acting on one’s own interests. This is certainly false in the case of individuals. When I do something out of love for my family, I am at once acting responsibly vis-à-vis my family and enhancing my own happiness. How can that be? It is because my family’s interests are partly constitutive of my own interests: I can’t conceive of myself and what’s good for me independently of my family. This doesn’t mean that whatever interests my family has, I have as well. It does mean that I recognize a responsibility to my family’s interests, and to take them into account when I decide what to do.

An analogous case can be made about a corporation and the social environment in which it operates. Instead of seeing its interests as wholly independent of the larger community’s interests (in the case of transnational corporations, the community is essentially the world), the corporation can see them as intertwined. There is then nothing inherently contradictory about a corporation’s maximizing its profits and advancing social good at the same time. Of course, should a company refuse to see things that way, that is it’s choice. It is important to note though that it is a choice, and like all choices, one for which it can be held accountable.

But beyond the mechanisms of social blame and legal sanction, since the corporation can acknowledge reasonable options beyond maximizing profits, should it wallow in a psychopathic existence, that is the way it wants to be and not the way it that it must be. Therefore, the corporation differs from the genuine psychopath: it can hold itself accountable; the problem is it just typically refuses to do so.