They Breathe Profits; They Eat the Interest on Money

An Excerpt from “Of, By, and For the Corporations” in

Shaking the Gates of Hell:  Faith-Led Resistance to Corporate Globalization

“The bank is something else than men.  It happens that every man in a bank hates what the bank does, and yet the bank does it.  The bank is something more than men, I tell you.  It’s the monster. Men made it, but they can’t control it.”       John Steinbeck, The Grapes of Wrath[i]

The dictionary definition of a corporation is “a body formed and authorized by law to act as  a single person although constituted by one or more persons and legally endowed with various rights and duties including the capacity of succession.”[ii] It has powers and rights that the individuals within it do not have, and those same individuals are legally shielded to some degree from personal responsibility for its debts or for whatever harm it might cause. But the fact that a corporation is authorized to act as a “person” under the law creates a troubling dynamic, given the (profit-seeking) purpose of corporations and their growing power.

Still, it helps for our purposes here to personify them. By so doing, we can better describe the relationship of human beings to these “principalities,” that is, these institutional Powers.

A corporation is a legal fiction, a fictitious person, but not a fantasy. It has a life—in perpetuity no less (by virtue of its “capacity of succession”), granted by the law, though it is not alive. It is a major protagonist on the stage of world events, though not a human one. It has motivation and a purpose—to survive and expand through growing profits, but no moral agency, no ability to choose right over wrong, no conscience but the bottom line. As Joel Bakan says, in The Corporation: The Pathological Pursuit of Profit and Power: “[The corporation] remains . . . a legally designated ‘person’ designed to valorize self-interest and invalidate moral concern. Most people would find its ‘personality’ abhorrent, even psychopathic, in a human being, yet curiously we accept it in society’s most powerful institution.”[iii]

John Steinbeck’s classic novel, The Grapes of Wrath, contains a remarkable passage that portrays human idolatry and servitude in relation to the Powers.  In this case, Steinbeck takes on the economic “rulers,” the banks and corporations that profited from misery during the Great Depression, and shows how human beings relinquish their freedom in service to such Powers.

All of them were caught in something larger than themselves.  Some of them hated the mathematics that drove them, and some were afraid, and some worshiped the mathematics because it provided a refuge from thought and from feeling.  If a bank or a finance company owned the land, the owner man said, the Bank—or the Company—needs-wants-insists-must have—as though the Bank or the Company were a monster, with thought and feeling, which had ensnared them.  These last would take no responsibility for the banks or the companies because they were men and slaves, while the banks were machines and masters all at the same time . . . [iv]

Steinbeck employs the metaphors of  “machine” and “monster to demonstrate how human beings tend to relinquish their own personal responsibility in relation to institutions, become enslaved by them, and participate in their harmful actions in the world. The machine metaphor is an apt one for banks or other for-profit corporations because after being invented and set in motion, a machine runs on its own. Human input is generally limited to making technological improvements, repairing or replacing parts, or helping the machine do whatever it is designed to do, on the assembly line, for example. In a similar way, once a corporation is chartered and established, humans at every level are replaceable, like the mechanical cogs in a machine. Their ability to control it is constrained by both inner, institutional realities and by outside pressures that drive the corporation and the people within it to put profits first.

Even CEOs rise to their positions because they accept and promote the corporation’s primary goal, that is, to make a profit and raise the value of its stocks so that it can survive and grow. Corporate CEOs serve as figureheads, giving a human face to the corporation. Whatever socially or environmentally responsible policies a manager might like to enact can only be enacted if they will bring financial profit to the stockholders. The law prohibits him or her from enacting such policies unless they will affect the bottom line in a positive way.

Although individuals within a corporation may be ethical, the corporation, like a machine, is impersonal; it does not have a conscience. Its only “conscience” is the bottom line. It is designed to bring profits to stockholders, regardless of the social or environmental costs.

In pursuit of profits, a corporation must minimize its expenses, so it seeks to “externalize” them, that is, to shift as many costs as possible over to society at large, so that they don’t affect the bottom line. If a corporation creates a product that causes cancer, or pollutes the air and water, or creates a hazard for consumers, it seeks to avoid paying for medical bills or cleanup or damages by promoting deregulation and risk-benefit or cost-benefit analysis or by threatening to relocate to another community or country. Joel Bakan calls the corporation an “externalizing machine:” “The corporation . . . is deliberately programmed, indeed legally compelled, to externalize costs without regard for the harm it may cause to people, communities, and the natural environment. Every cost it can unload onto someone else is a benefit to itself, a direct route to profit. . . . The corporation, like the psychopathic personality it resembles, is programmed to exploit others for profit. That is its only legitimate mandate.”[v]

There are some socially responsible corporations that have built their businesses by marketing to socially concerned shoppers who are willing to pay for alternative products which cause less harm or which benefit society. These corporations, including Ben and Jerry’s, Working Assets, and Newman’s Own, model a healthy corporate ethos. Other corporations seek to mitigate harmful effects and to improve their public relations through writing ethical standards into their bylaws. But because the global economic system is itself flawed, high standards can place socially and environmentally responsible companies at a competitive disadvantage. Furthermore, some corporations are duplicitous in their attempts to appear environmentally and socially responsible. They contribute to various environmental or social programs or projects with the right hand while lobbying against environmental regulations or social programs with the left.

The primary guiding principle of corporations is the bottom line. Their survival depends upon it. In Steinbeck’s words, “They breathe profits:  They eat the interest on money.”[vi] If their books do not show profit, their stockholders will pull out, top management officials will be fired, or they will be taken over by a company that “utilizes its assets” in ways that generate higher profits. This is not a problem that can easily be solved by socially concerned corporate executives, workers, or stockholders. It is a systemic problem. “Nothing in its legal makeup limits what [the corporation] can do to others in pursuit of its selfish ends, and it is compelled to cause harm when the benefits of doing so outweigh the costs. Only pragmatic concern for its own interests and the laws of the land constrain the corporation’s predatory instincts, and often that is not enough to keep it from destroying lives, damaging communities, and endangering the planet as a whole.”[vii]

Even when a corporation breaks the law, it can incorporate the costs of lawyers and fines as a normal part of doing business. Except in specific circumstances, people within the corporation are not legally liable for harm done. In this, too, the corporation is different, and less controllable, than human beings.

Steinbeck’s “monster” image portrays something of the spiritual effects of corporations and how they capture human beings in their service. In this dehumanizing process, people may justify harm by appealing to corporate imperatives, that is, what “the monster that has ensnared them needs, wants, must have” (that is, profits). In such a situation, people are serving the institution instead of the institution serving life.

Of course, individuals may have personal goals that intersect with the goals of the corporation. CEOs receive high salaries, bonuses, status, and stock in the corporations they manage. Stockholders receive the economic value of their stock, workers receive a job and a wage. Consumers receive whatever products or services the corporation offers—for a price. All these people are rewarded for consenting to the corporation’s values and goals and for serving its needs.

But people are often blind to their own contribution to the corporation’s overall effects in the world. Most people within a large corporation—for instance, workers—do not participate in its decision-making processes. Most stockholders only pay attention to the economic value of the corporation’s stocks. Most workers, even when unionized, focus primarily on jobs, wages, and benefits. Most customers focus on the product or services they purchase. Members of the board of directors can write ethical standards into the corporation’s bylaws if they can justify such standards in terms of profit, but their main focus is on the corporation’s “fiduciary responsibility” to its stockholders, which is their primary responsibility under the law. Upper level managers and CEOs usually put the goal of generating short-term profits above all else, for if a corporation does not show a profit, these executives are out of a job. In Steinbeck’s words, “The monster has to have profits all the time. It can’t wait. It’ll die.”[viii]

The corporation may engage in practices that most of the people who serve it don’t even know about. Workers, consumers, and lower-level managers may not know how the company treats workers in other countries or whether it follows environmental laws at home or abroad. They may have no idea of the social or environmental costs of doing business, since such costs are externalized and do not show up on corporate ledgers but are borne by society as a whole.

Even directors and upper level managers generally focus primarily on the corporation’s finances and may not have a clear overview of what the corporation does. Those who do know, and who participate in the decision-making process may be fully identified with the corporation’s goals and go along willingly in its service. Or they may go along sadly, reluctantly. “We have to do it. We don’t like to do it. But the monster’s sick . . .”[ix]

When human beings are in these kinds of relationships with a huge corporation the corporation can cause immense harm, far more than could be caused by individual human beings. Individuals have been “caught in something larger than themselves.” This fosters a collective mind-set. As Stringfellow observed, “People are relieved of their individuality, along with their sense of judgment and choice.”[x] Knowingly or unknowingly, those who serve a corporation without questioning its effects in the world adopt the corporation’s collective ideology and values. Willingly or unwillingly, they work to serve its purpose and extend its power. They are complicit in what the corporation does. They “take no responsibility for the banks or the companies because they [are] men and slaves, while the banks [are] machines and masters all at the same time.”

With this kind of human support, a corporation can shape an environment in which it can thrive. This may include firing workers or moving factories or supply chains to countries where there is cheap labor and lax environmental, consumer-safety, and human-rights laws. It may also include pressing governments and global institutions to make laws and regulations that protect a corporation’s interests and further its goals, that is, to increase its profits and stock values.  In Steinbeck’s words, “When the monster stops growing, it dies. It can’t stay one size.”[xi]

[i] Steinbeck, John, The Grapes of Wrath (New York:  Viking Press, 1967), 45.