The Corporate Criminal: Why Corporations Must Be Abolished (Key Ideas in Criminology)
Steve Tombs and David Whyte
Oxon Ox and New York: Routledge. 2015.
Tombs and Whyte build a strong case for abolishing corporations. Chapter 1 introduces the corporate criminal and its symbiotic relationship with the state. Corporations, supported by government regulation and (re)regulation, externalize many of their costs in the form of pollution, injury, and death. Chapter 2 describes some examples of corporate crime that have received much publicity (e.g., deaths in Bangladeshi textile factories) and some that are less so in the public eye (e.g., safety law violations). The state has been facilitating corporate crime since it initiated the creation of corporations. The authors provide a number of examples of how corporations have benefitted from wars, often by assisting the enemy of the countries in which the corporations reside.
Chapter 3 examines the origins of the corporation through not-for-profit government charters. Legislation which later allowed for-profit corporations to issue shares to the public was not the result of a call for economic efficiency but rather the result of pressure from the British bourgeois class who wanted to invest their surplus cash. The Limited Liability Act in 1855 was a form of limited responsibility–investors (shareholders) could only lose the amount they invested in shares and were not responsible for corporate debts or other corporate liabilities. Limited liability also applied to corporate subsidiaries, and subsidiaries were, and are, set up in foreign countries in order to by-pass their home-country laws and to assist parent corporations in avoiding liability.
Chapter 4 describes corporations as money making machines, with little concern for the consequences. The structure of corporations allows shareholders to blame directors and feel no responsibility for the harm caused by the corporate vehicle in which they invest. In turn, the directors hide behind their raison d’être–the best interests of the corporation which they see as maximizing profits and minimizing costs. The image of the good corporate citizen and the rhetoric surrounding corporate social responsibility allow corporations to take over many of what were once public services and to demonstrate that the public can rely on private corporations for all their needs. According to Tombs and Whyte, these claims expose the state and the corporation to criticism.
Chapter 5, “Controlling The Corporation?” dismisses a number of models of regulation (the consensus model, including Braithwaite’s pyramid of enforcement; the neo-liberal model; and law and economics, including capture theory). A critical and neo-Marxist model more accurately reflects how legislation develops more by dissensus than consensus. In the end, regulation is designed to ensure that corporations do not self destruct, so regulation cannot be the solution to corporate crime.
Chapter 6 addresses the question, “What is to be done about the corporate criminal?” Although Tombs and Whyte would like to see the corporation abolished, they do not provide any answers to the question: how do we abolish the corporation? Instead they believe the solution will be in the increasing public discontent that will arise when citizens realize the private sector is less efficient than the public sector in providing services and that the private sector is also more prone to fraud. Demands in the United States to end legal personhood for corporations is one example of radical reform. Less transformative changes include equity fines (a proposal that failed in Scotland in 2010), public protests, and any form of regulation that disrupts corporate power and puts more liability on corporate owners, managers and directors. Providing more power to labour unions and workers could also disrupt corporate power.
This is a book that should be read by everyone–politicians, corporate managers and directors, employees, shareholders, academics, and members of the public. According to the authors, the corporation is evil and should be eliminated. The authors go a long way to illustrating corporate evil. They need to provide a better blue print for how one abolishes a socially constructed, but very powerful, institution that has outlived its usefulness and is devastating to human life.
Simon Fraser University