An article from “Social Epistemology” (2005) concerning technological determinism and the social construction of technology

Social Epistemology
Vol. 19, Nos. 2-3, April–September 2005, pp. 287–313

Recognizing the Role of the Modern Business Corporation in the “Social Construction” of Technology

Wade Rowland

Conventional models for Social Construction of Technology fail to take into account the prevailing influence of a new technological/social phenomenon-the modern business corpo- ration. Corporate autonomy, power and influence, as exhibited especially since the mid- 1970s, has made necessary the consideration of a new concept: the Technological Construc- tion of Society, a novel form of technological determinism which pays due attention to the role of large, publicly-traded, professionally managed business corporations.

Keywords: Corporations; corporate management; corporations and technology; history of corporations

The notion that technologies are socially constructed—that is, invented rather than discovered—is no more nor less open to challenge than the parallel idea that scientific theories are socially constructed. Since the latter concept seems to have been so widely accepted as to merit inclusion in the category of common sense, it’s a safe bet that the social construction of technology is an idea that is here to stay.

I would like to argue, however, that almost all current models of SCOT share a conceptual flaw, which is captured in the name itself. The difficulty lies in their drawing a distinction between society and its institutions, on the one hand, and technology on the other, as two separate and distinct orders of being. The basic difference between the two, as implied in most models, seems to be that society is comprised of human beings and human institutions, and technology is an instrument, either abstract or concrete, for doing things that humans want done. In other words, a tool. The one constructs the other.

It seems to me that this viewpoint has led to the exclusion of an important and other- wise obvious element in the process of creation and dispersion of technologies. The excluded element is itself a technology—the modern business corporation. When it is included in the technology–construction process, the dynamics of the equation are dramatically changed, because we now have a technology guiding the construction of technology. This can reasonably be called “social construction” only if it can be demon- strated that the constructing technology is operating under the control of and in the interests of society (or elements thereof). I will be arguing here that while, for historical reasons which I will detail, this may once have been true of the business corporation, it has not been the case since at least the early to mid-twentieth century.

The classification of bureaucratic institutions like the corporation as technologies is less controversial than it was when Jacques Ellul published The Technological Society forty years ago and I will avoid the debate here altogether, except to challenge the idea that “social” technologies are somehow “softer” or less concrete than “hard” technol- ogies like radio and aircraft, more in the nature of theoretical abstractions or models than actual instruments with a real existence in the world. While this distinction may be true as a general statement—society itself is merely an “imagined totality” (Bauman 1998a) 1—it is not, it seems to me, true of the business corporation. The business corporation, I contend, is a hybrid human/machine of the kind sometimes called cyborg, a highly evolved, increasingly autonomous, self-regulating and self-managing cybernetic entity that is unique in history (Hayles 1999; Mirowski 2002). 2

I want to explore the evolution of the cyborg corporation and the implications for SCOT theory, and I will begin by briefly reviewing some standard analytical approaches to the relationships between technology and society as defined by Jennifer Darryl Slack (1984), whose work lends itself to my purpose here because of its conceptual compre- hensiveness and clarity. In her Communication Technologies and Society, she groups ideas of the causal relationship between technology and social change into four catego- ries, arranged in order of increasing merit. 3 (Although she directs her attention to the technologies of communication, her definitions can bee taken to be universally valid.) Each is critiqued conceptually, and, more importantly for Slack, in terms of its service- ability in providing locations for intervention in the cause of human welfare. 4

Simple causality is distinguished by the mechanistic belief that “the desirable and undesirable effects of a technology are inherent in the technology itself. As long as the technology exists, the effects will necessarily occur”. 5 Slack identifies this conception with Luddism, Ivan Illich and the appropriate technology movement, and with Marshall McLuhan. 6 In her critique, Slack dismisses it as an expression of the error (exposed in detail by Hume) of confusing conjunction with causation. The only inter- ventionist course available in the simple causality framework, according to Slack, is Luddism. This is because the theory treats technology as a given, and its impact as preordained. The only way to eliminate harmful impact is to destroy or otherwise elim- inate the technology.

In symptomatic causality, “[e]ffects are not inherent in or preordained by the technology itself. One must also look at the nature and role of social institutions for an explanation of the relationship between communication technologies and society”. 7Thus, important mediating effects are introduced between technology and society: “essentially autonomous and neutral technologies are shaped by society’s institutions to suit the social order”. 8 However, “the characterization is still mechanistic—in that it persists in the implication that technologies are isolated, discrete, self-contained phenomena compelling effects in society”. 9 Symptomatic causality is identified with Cliff Christians, Robert Houlton and others. It is found wanting by Slack in that “by positing the origins of a technology as initially outside the system, writers from this perspective totally disregard the way in which the technology may have been shaped by the system initially…. the invention of the technology is not considered to be integrally related to the system”. 10 Because the theory assumes the impact of new technology will be determined exclusively by the shaping influences of existing social structures, “it makes no sense to say ‘no’ to a particular technology” prior to widespread adoption. Possibilities for intervention are perceived too narrowly, in terms of those presented once the technology has been deployed.

This is a shortcoming shared with simple determinism, according to Slack: “… what all adherents to a mechanistic conception of the causal relationship between communication technologies and society ignore—is that the very processes of invention and innovation are already deeply embedded in the social fabric”. 11 Intervening at the site of the technology, therefore, is discouraged both because there is no real motive to do so and because it is perceived as being unlikely to have much effect: “Intervention based on symptomatic analysis is therefore likely to be inadequate, as it precludes the possibility of intervening in the relationship between technology and society prior to the technology’s appearance”. 12

Expressive causality begins to address the problem of timely action. As with symp- tomatic causality, it takes into account mediation between new technologies and soci- ety, however the mediation process is less direct and mechanical: in expressive causality, technology is simply one aspect or expression of a social unity. “Expressive causality implies a particular vision of the social whole: an expressive totality in which any and all phenomena are mere expressions of some inner essence, be that essence an idea, ideal, social configuration or dynamic. As the parts of the whole are merely expressions of the essence of the whole, everything is essentially reducible to that essence” (p. 64). The “expressive totality” posited in some respects resembles Hegel’s “spirit” or geist, as reflected in Raymond Williams’ use of phrases such as “the structure of feeling” and “community of selected emphasis and intention” in identifying technol- ogy’s determining agent. In Louis Mumford, the geist which expresses itself in the popularity of the mechanical clock is a mechanistic conception of life; in Herbert Marcuse, Ellul and Langdon Winner it is capitalism which employs technology as a method of subjugation and homogenization of the individual; in Lukåcs (via Marx) it is the social productive forces.

While Slack is sympathetic to the expressive causality approach, she finds it too abstract to be of much use in providing sites for intervention. “How”, she asks, “do we attack an essence? How would we go about eliminating something as nebulous and pervasive as mechanism?” Expressive causality interventionism, she says, must necessarily be limited to “intellectual activity: writing, thinking, spreading the ‘truth’, and often just plain wallowing in pessimism”, its practitioners little more than “intellectual Luddites”. It cannot “provide us with the means for determining where and how to intervene in a way that will make any difference at all”. 13

Finally, structural causality is proposed by Slack as a model that remedies the perceived conceptual shortcomings of the previous three, and provides a “superior” approach to social intervention in the uses of technologies. Based principally on the work of Louis Althusser 14, it provides a “more powerful” model of the relationship between technology and society, providing “the tools for intervening both before and after the appearance of technologies”, as well as “a way for determining specific loca- tions for interventions such that our interventions will make a difference”. 15 As in the case of expressive causality, the “effectivity” of a technology is to be found in the emer- gent properties of complex, dynamic social systems which spawn, shape and are in turn shaped by technologies in an organic rather than mechanical way. However Althussar- ian structural causality bares an overtly Marxian pedigree in its assertion that the “whole”, however dynamic, is always “structured in dominance” of the economic over the political/judicial and the ideological. 16

Without immersing ourselves in the intricacies of Althusser’s analysis, we can observe with Slack that it denies the “expressive” assumption that “technologies are merely the peripheral expressions of some central essence or organizing principle of society”. 17 For the structural analyst, technologies are “semiautonomous elements located within a specific historical configuration within a mode of production. Thus, a structural analysis of the relationship between a given technology and society should not begin by trying to explain the nature or essence of the technology. Although a technology is a real object (a real machine or structure), it is at the same time part of a changing whole that is structured in dominance” 18, and it therefore “has no essence, and it therefore cannot reflect or express an essence, as is maintained in the expressive causal position”. 19 The proper place to begin any analysis is,

by understanding how technologies have been historically constituted—the way in which, and the degree to which, the structure in dominance has overdetermined technologies as effects, as well as rendered them effective. We must strive to locate technologies within a particular historically constituted social whole and to explain the relationships between the technologies and the whole as it changes…. Ideally, an appropriate analysis of the social whole would consist of explaining how the particular structure in dominance overdeter- mines technological development as well as explaining the role of technology within that whole. … Once our understanding of that relationship is informed by this historical spec- ificity, intervention based on this conceptualization is much more likely to be truly critical and truly effective. 20

Toward a Structural Causality Model of the Modern Business Corporation

The history of the corporation fits comfortably within Slack’s notion of locating technologies “within a particular historically constituted social whole”, and in the space that remains, I would like to draw on Slack’s structural causality model to sketch the outlines of an analysis of the technology commonly called the modern business corporation. The corporation seems to present a special case, in which a technology has been developed initially to serve a particular purpose, but due to its structural endowments has been able to seize control over important aspects of the society in which it has evolved. Not the least of these is the development and deployment of new technologies. The modern business corporation has become what might be called a “meta-technology” in that its R&D labs and marketing expenditures are responsible for the development, shaping, and dissemination of a great many—perhaps most—current technologies of the more conventional kind (Noble 1977). 21 It is a unique element in the structure of capitalist society in that, while it plays an institutional role, it is actually an autonomous technology. It is designed to accomplish a single abstract goal—to maximize the value of the assets it controls.

The corporation as we know it is the highly-evolved product of the Rationalist project of constructing a materially prosperous and morally just society based on newly-formulated “laws of nature” and “scientific” insight into the psychological makeup of the human being (Frye 1967). 22 It is an important component of the larger mechanism of the market economy as theorized by Smith, Malthus, Mill, Ricardo, Jevons and lesser lights of classical liberal economic ideology. If the market economy can be thought of as a mechanism for automatically converting the dross of greed (psychological egoism) into the bullion of social welfare—the “wealth of nations”— then the corporation was an important cog in that machine. It assists, in other words, in the process of turning individual vice into collective virtue. Its purpose was and is to represent the collective “natural human acquisitiveness” of the shareholders it repre- sents in the market.

That such a surrogate was needed became evident in the face of undeniable evidence that, despite the assurances of Thomas Hobbes and the eighteenth- and nineteenth- century economists who subscribed to his gloomy view of human nature, people are not consistently self-serving. They frequently behave stoically or even altruistically (Frank 2000). 23 This awkward fact was seen to be a serious impediment to the optimal functioning of the Rationalists’ autonomous, self-governing market economy, which relied on consistently self-interested behavior from the “rational economic agents” whose day-to-day transactions constituted a large segment of the economic activity of any nation. 24 The solution was to collectivize individuals’ interventions in the market through the vehicle of the business corporation, whose shares are sold in large quantities on the stock market. In designing the modern business corporation to reflect the scientific Rationalists’ understanding of the unfolding of evolutionary progress, lawyers, legislators and entrepreneurs created an entity that operated on machine principles derived from what were understood to be the laws governing natural economic processes. The business corporation was designed as an autonomous, cybernetic instrument (i.e. one that responds automatically to information feedback) whose purpose was to further the operations of the market economy by representing those human attributes (self-interest, perseverance) that classical economists had identified as being responsible for economic progress. It had an added advantage in that, while human economic agents were normally burdened by psychological and even moral limitations on their “innate” acquisitiveness, the (machine-like) corporation was not. Its self-interest knows no bounds.

We can thus define the modern business corporation as a tool designed to function tirelessly within the (capitalist) economic market place, acting as an agent or avatar of its owners, the shareholders, in the pursuit of self-interest. Or more concisely, a corporation is a cybernetic machine for maximizing the value of the assets it controls.

A Brief History of the Modern Business Corporation

Having suggested that the corporation as we know it was designed specifically for its role, I should now modify that slightly to say that it was in fact adapted from an earlier template and then modified in significant ways. The lineage of the modern business corporation in fact reaches all the way back to the Roman Empire, and the earliest examples include cities, universities, guilds, and holy orders. Their initial purpose was to ensure the continuous functioning of institutions requiring human governance: while individual human directors might come and go according to the vagaries of life and fortune, the corporation itself would carry on as an essentially immortal entity. In the sixteenth and seventeenth centuries, monopoly trading and colonizing enterprises venturing, at enormous expense, into newly-discovered parts of the planet were granted corporate charters by European monarchies. The corpora- tions were in a sense extensions of the nation state, and they held their charters of incorporation only so long as their activities reflected national goals. By the mid-nine- teenth century, however, the institution had evolved into an all-purpose legal mecha- nism for facilitating the conduct of business within a market economy. In most jurisdictions, the laws of incorporation no longer required business ventures to fulfill any pubic purpose in return for the protection and privileges conferred on investors by their corporate charters. Business corporations had come to be seen, not simply as useful vehicles for the undertaking of financially risky but socially beneficial enter- prises, but as a good thing in themselves, a helpful adjunct to the Rationalist model of the self-governing market mechanism.

The infancy of the business corporation in its current multi-purpose form can be dated to 1811, when the State of New York enacted a law of incorporation that required only a very general description of the type of business being undertaken. The other states followed suit during the 1840s and 1950s. In Britain, the Joint Stock Companies Act of 1844 allowed corporations to be created by a simple act of registration with a summary description of the nature of the enterprise. 25 The corporation had evolved from being a creature of the state or some monopoly interest in society with clearly defined public purpose to being an all-purpose legal mechanism for facilitating the carrying on of business within a market economy. 26 This evolution continued to the point where, “Today state charters are essentially permanent rather than subject to any meaningful review” (Fox 1996). 27

The nineteenth century was characterized by mammoth engineering undertakings, including the building of railroads, transcontinental telephone networks and world- girdling telegraph cables, and the opening up of vast new regions to farming. Enterprises on this scale called for vast infusions of manufactured goods such as steel rails, copper wire and glass insulators, farm machinery and grain ships, locomotives androlling stock, and huge quantities of coal and petroleum fuels. The engineering projects themselves would typically be undertaken by corporations whose stock was widely held, and many of which had been formed with the active encouragement of govern- ments. But their capital goods requirements were still frequently filled by older-style business ventures—partnerships and sole proprietorships. These increasingly obsoles- cent business entities were stubbornly maintained because they were safe from the public disclosure of financial records that the state demanded of the corporations it chartered. Many of these companies were nevertheless enormous. For example, Andrew Carnegie’s Carnegie Steel Company was a partnership, and several of John D. Rockefeller’s Standard Oil affiliates were not incorporated. But the penalty for that privacy, the inability to raise capital by selling shares to the public, became increasingly onerous as economies grew and capital requirements soared.

The so-called Panic of 1873 touched off a long depression that was marked by a frenzy of business mergers in the United States. Undertaken primarily to control over- production and stabilize markets, these “combinations” or “combines” led to a restruc- turing of major portions of American industry (Horowitz 1969; Sklar 1988). 28 The number of partnerships and proprietorships among major business enterprises declined dramatically, and at the same time a great many new and powerful “public” corporations were spawned, their shares trading on stock markets. The era of the robber baron was ending, and the era of the modern business corporation had begun. Between 1899 and 1904, United States Steel, International Harvester, American Can and 2,500 other corporate mergers changed the face of American business. By 1904 one in ten American workers was employed by a corporation. 29

As the old business patriarchs died off or were replaced, corporate management was increasingly placed in the hands of university-trained functionaries who saw all corpo- rations as essentially alike in terms of the skills required to run them efficiently and profitably.

[M]anagement, especially at the senior level, came to be defined as a set of generalized professional techniques that could be applied without specific reference to any particular product or enterprise. These techniques, which stress the manipulation of enterprise capi- tal for maximum rate of investment return, have been declared the most important, the ultimate strategic decisions of any enterprise. (Melman 1987b) 30

And capital was no longer raised primarily through internal financing, but by the sale of shares on the stock market, which meant that ownership, once closely-held, was now widely dispersed. These developments had the enormously significant effect of divorc- ing management and ownership. 31 Where the business corporation had once been an extension of the personality of its owner, it had now become an expression of pure market theory, as taught in the business schools of the industrial world. It had, in other words, been reformed into the exemplary rational economic agent. 32

With the advent of the professional corporate manager, private capital itself began to assume the appearance of modern technology, the manage- ment experts lending to the power of capital the sanction of objective science. Not alone the actual machinery of production but the entire bureaucratic operation of the corporate enterprise took on the guise of an efficient, well-oiled mechanism—the very embodiment of technical reason—against which individual opposition could not but appear “irratio- nal”. (Sklar 1988) 33

As an evolving piece of socio-legal technology 34, the corporation was perfectly adapted to its environment, the elegantly machine-like market economy as theorized by the nineteenth-century liberal economists. National and world markets had become, in the eyes of economic theorists, an integrated, self-regulating, mechanistic system capable of autonomous operation so long as it was carefully shielded from human interference. The modern business corporation, as it reached its full maturity in the mid-twentieth century, would become a kind of parasitic attachment to the market, robot-like in itself, but also exhibiting an unexpected proclivity to take over the host mechanism in toto, subverting it to the service of corporate, as opposed to human, or even national, needs. In the words of Zygmunt Bauman (1993c),

“National economy” is today little more than a myth kept alive for electoral convenience, the economic role of most governments boils down on the whole to maintaining hospita- ble local conditions (docile labour, low taxes, good hotels and entertaining night life) to entice cosmopolitan stateless and nomadic capital-brokers to visit and stay. 35

The burgeoning global economy is, as is widely acknowledged, the playground of the large multinational corporation, which ensures that the inconveniences of national boundaries are minimized through its powerful advocacy of comprehensive regional and global trade agreements.

These developments were not entirely unforeseen. As early as the mid-nineteenth century, influential Americans had begun to voice their alarm at the growth of corporate power and influence. In 1864 President Abraham Lincoln, immersed in the exigencies of the U.S. Civil War, wrote:

We may congratulate ourselves that this cruel war is nearing its end. It has cost a vast mount of treasure and blood …. It has indeed been a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. 36

President Rutherford B. Hayes (elected 1877) admonished, “This is a government of the people, by the people and for the people no longer. It is a government of corporations, by corporations, and for corporations” (Wasserman 1983). 37 On the eve of his becom- ing Chief Justice of Wisconsin’s Supreme Court in 1873, Edward G. Ryan warned:

[There] is looming up a new and dark power … the enterprises of the country are aggre- gating vast corporate combinations of unexampled capital, boldly marching, not for economical conquests only, but for political power …. The question will arise and arise in your day, though perhaps not fully in mine, which shall rule—wealth or man; which shall lead—money or intellect; who shall fill public stations—educated and patriotic freemen, or the feudal serfs of corporate capital …. (Beitzinger 1960) 38

In 1888 President Grover Cleveland expressed similar concerns: “Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters” (Richardson 1989). 39 (Half a century later U.S. Supreme Court Justice Louis D. Brandeis referred to corporations as “the Frankenstein monster which States have created by their corporation laws”. 40)

The Corporation as “Person”

In response to this kind of alarmed and influential opposition, the face of the corpora- tion was to change in an important way. Corporations were initially theorized as persons, notably by Thomas Hobbes 41, because they had some of the attributes of personhood in law: they could be sued and fined; they could incur debts and obliga- tions, and they had an existence that, in law, transcended that of their individual owners or members. But in English jurisprudence of the seventeenth and eighteenth centuries, lawyers acting on behalf of corporations were at pains to insist before the courts that their clients were fictitious or artificial persons, creations of the state that granted their charter. As artificial persons, they were of course not subject to laws directed at real, human, persons, even though framed in language such as, “No person shall …” (Benjamin and Bronstein 1987; Flynn 1987; Mayer 1990). 42

Toward the end of the nineteenth century, corporations and their lawyers changed their age-old tactics as they attempted to minimize regulation by those state govern- ments where anti-corporate factions were able to exercise power They began to pres- sure the courts for formal recognition of corporate personhood, and now the chorus was that corporations were not artificial, but natural persons. The distinction is one of great significance. If corporations are artificial persons, creatures of the state, then the state has the clear right to exercise unlimited control over their activities. If, on the other hand, they are natural persons, then like that other race of natural persons— humans—they, and their basic rights, pre-exist the state. Corporations would thus become heirs to primordial “natural rights”—human rights—intended to protect individuals from government interference beyond what is strictly necessary to main- tain civil and social order.

After years of pressure and lobbing, this remarkable boon of legal personhood was peremptorily granted by the U.S. Supreme Court in 1886 in the case of Santa Clara County v. the Southern Pacific Railroad. The legal context was provided by the four- teenth amendment of the U.S. Constitution, (written to protect freed slaves from abuse and exploitation) which declares that all state citizens are also American citizens, and that no state government shall “deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws”. By granting the railroad legal personhood in this context, the court effectively made it impossible for state governments to regulate railroad tariffs on the movement of agricultural and other products. As persons, corporations now had the same rights as human individuals to charge what they liked for their services. To attempt to explain why the court made this decision would take us too far a field: the question remains controversial.

What is significant for present purposes is that, with legal personhood in their quiver (whether “artificial” or “natural” remained a contentious point, though higher courts leaned heavily to the latter position), corporations began almost immediately to seek access to the full panoply of protection offered to human persons under the U.S. Bill of Rights. These vigorous efforts began bearing fruit in a significant way in the mid-twen- tieth century, in a series of Supreme Court decisions that successively granted corpora- tions the same protections as humans under the first, fourth, fifth, sixth and seventh amendments. These cover rights to free speech; freedom from unreasonable searches and searches without warrants; freedom from double jeopardy; and the right to trial by jury in both criminal and civil cases. 43 The effect has been significantly to reduce state and federal government’s ability to regulate, inspect and generally exercise control over the operations of corporations (Mandel 1994). 44 For example, fourth amendment protection from regulatory searches without warrants, was established in Marshall v. Barlow’s Inc. (1978) 45 in which the U.S. Supreme Court struck down federal Occupa- tional Safety and Health Administration regulations involving unannounced safety inspections of corporate premises—in this case the premises of an Idaho electrical and plumbing corporation. Many inspection provisions in federal statutes were rendered presumptively invalid by the decision. The court found that corporations enjoy privacy rights equivalent to those of human persons and that commercial buildings should be treated in the same way as private homes under the amendment’s protections.

In the same year, another watershed ruling of the Supreme Court abruptly aban- doned the undeniably strange and legally troublesome notion that corporations are somehow natural persons, but it did so in a way that strengthened, rather than weak- ened, corporate access to constitutional rights. The case was First National Bank of Boston v. Bellotti, a dispute over first amendment rights to free speech. 46 The 1978 trial centered on corporations’ right to spend money to influence the outcome of a referen- dum on instituting a graduated personal income tax in the state of Massachusetts. It had been brought by a consortium of Boston corporations seeking the right to campaign against the tax: First National Bank; New England Merchants National Bank; Gillette Co.; Digital Equipment Corp.; and Wyman-Gordon Corporation. In its judg- ment, the U.S. court chose to sidestep the whole natural/artificial personhood contro- versy and instead relied on its interpretation of the intent of the amendment. The question was no longer whether the corporation, as either natural or artificial person, was entitled to free speech rights originally intended for human persons, but whether conferring of those rights on corporations furthered the amendment’s goal of free and open debate.

The Massachusetts Supreme Court, in its initial judgement, had accepted the principle of corporate personhood, but had ruled that humans enjoy broader first amendment protections than corporations—the latter being entitled only to the long- standing Fourteenth amendment property protections under the Bill of Rights. On appeal, the majority of the Supreme Court dismissed this reasoning “as an artificial mode of analysis” (Hawken 1993). 47 Its judgement stated that,

[t]he Court below framed the principal question in this case as whether and to what extent corporations have first amendment rights. We believe that the Court posed the wrong question. The Constitution often protects interests broader than those of the party seeking their vindication, the first amendment, in particular, serves significant societal interests.The proper question therefore is not whether corporations “have” first amendment rights, and if so, whether they are coextensive with those of natural persons. Instead, the question must be whether [the statute] abridges expression that the first amendment was meant to protect. We hold that it does … 48

In its ruling in Bellotti, the Supreme Court effectively granted to corporations virtually the same rights under the U.S. Constitution as are enjoyed by human beings. A series of cases argued on this premise quickly gave corporations explicit rights under the fourth, fifth and seventh amendments, as well. 49 The process is continuing.

The legal status of the business corporation in Canada has evolved in a roughly parallel, though perhaps more nuanced, way. In 1984 the Supreme Court of Canada made a ruling similar to that of its U.S. counterpart in Marshall v. Barlow’s Inc., in the case of Hunter v. Southam. The case involved alleged collusion between two major newspaper chains in closing down a series of big-city dailies in a scheme that limited competition. The Crown was unsuccessful in its prosecution of the chains due to crip- pling court challenges to search provisions of federal anti-combines legislation as violating arbitrary search and seizure protections. A succession of rulings made the gathering of documentary evidence impossible. 50

In 1986 the Quebec Court of Appeal struck down provincial legislation banning all TV ads aimed “at persons under thirteen years of age”, as an infringement of the corpo- ration’s right to free speech. 51 In the subsequent appeal, the Supreme Court of Canada accepted the notion that corporate advertising, as a form of corporate speech, is protected by the Canadian Charter of Rights and Freedoms’ free speech provision. It nevertheless held (by a 3:2 vote) that the Quebec law was a “reasonable limit” on free- dom of speech because a “particularly vulnerable group” was being protected by the law. 52 On the other hand, Canadian corporations have been granted the right to prohibit the free expression of political opinion anywhere on their private property. 53 In another, long-running battle, the Ontario advertising company Van Niagara Ltd. took the Town of Oakville to court alleging that a 1994 town bylaw restricting billboards to 80 square feet violated the corporations right to free speech. The Ontario Court of Appeal ruled in the corporation’s favour in 2002; that judgement was over- turned the next year in the Supreme Court of Canada. The ruling was centred on the right of municipalities to legislate within their own jurisdictions. Legal authorities believe the decision is likely to be tested on other Charter grounds. 54 Meanwhile corporations continue to pursue their Charter “rights”. The Canadian Charter’s “mobility rights” clause, intended to guarantee citizens freedom of movement, was used in 1989 to strike down an Alberta Law Society regulation forbidding interprovin- cial law firms. The Toronto law firm of McCarthy and McCarthy challenged the rule after it had been denied permission to set up a branch office in that province. There was no human mobility at stake, only the mobility of capital. 55

As part of its long-standing battle against in-store unions, Wal-Mart Canada in 2004 asked the Saskatchewan Superior Court to quash demands from the province’s Labour Board for documents relating to a campaign to unionize a company outlet in the city of Weyburn. The documents had been requested in connection with Saskatchewan Labour Act provisions forbidding coercion of employees by companies during union organizing drives. Wal-Mart challenged both the legislation and the Labor Board orders as “unconstitutional, for infringing on Wal-Mart’s right to freedom of thought, belief, expression and communication”, all of which is protected under the Canadian constitution’s Charter of Rights and Freedoms. 56 Whatever the outcome, appeals seem inevitable.

What recent Supreme Court rulings are saying, Osgoode Hall law professor Michael Mandel has concluded, is that if a corporate “person” is to be charged with a serious crime, it must be granted the full arsenal of human rights protections that were originally put in place to protect human citizens from the arbitrary and excessive use of state power. 57 That is, the Supreme Court of Canada has established that when corporate crime involves criminal behavior as opposed to simple breaches of regulations, the corporation must be granted the same Charter protections as a human defendant.

… the Supreme court took us by a circuitous route involving many windfalls to corporate criminals to the position … of two alternatives equally guaranteed to satisfy business and to leave the regulatory state in a much-weakened position: either we go easy on business crime, in which case the courts will dispense with some, but not all, Charter guarantees, or we take it seriously, in which case the courts will arm business to the teeth with Charter defenses that make it invincible. 58

One final aspect of the corporation as we know it needs to be addressed, if only briefly, and that is its tendency to gigantism. While classical economic theory assumed a market of many smallish corporations competing with one another and thereby opti- mising value for money, modern business corporations see market efficiency in a different way. Individual corporations are not interested in public welfare—the have only their own interests at heart—and from the point of view of the individual corpo- ration, monopoly (or sometimes oligopoly) is obviously best. In the absence of puni- tive anti-trust regulation, corporations will typically want to control their market and eliminate competition through acquisitions, mergers and simply driving the competi- tion out of business: that is their clear self-interest. For them, that is “value for money”. Thus, regulation permitting, corporations will tend grow without limit. This tendency is self-reinforcing, since competing corporations will grow in self-defence.

Re-defining “Corporation”

In light of this history, we can pause here to regroup, and note that the “modern business corporation”, as the term is used here, has several distinctive features. It is typically very large in terms of revenues and numbers of employees; owned by large numbers of individual and/or institutional shareholders (including such entities as pension funds and banks, which manage individual investments on the investor’s behalf); and run by highly trained cadres of professional managers. Significantly, it has achieved the legal status of personhood, and thus can (and frequently does) claim protection from the state under human rights codes. 59 Finally, whereas early corporations were formed for narrow purposes detailed in their charters (typically, overseas trade or large, one-off engineering projects), the modern business corporation has a single purpose—to make money. It is this definition that should be understood whenever I use the word “corpo- ration” in the following pages. I do not include in this discussion companies that are privately held or majority-owned by one individual or family. 60 While these compa- nies often behave in ways indistinguishable from publicly-owned and professionally managed corporations, they don’t always. They sometimes, for example, exhibit genu- ine altruism, distributing largesse in ways that would cause a shareholder revolt or legal action in a public corporation. Controlling ownership gives individuals the freedom to express their humanity, for better or worse, with the company’s money.

On the one hand, then, we have in the corporation a machine whose sole purpose is profit-making. (The nature of the products or services it produces is relevant only in that, if another product or service offers a better opportunity to earn profit, it will be adopted.) On the other, we find that it is capable, to a large extent, of cleansing the market of disruptively “irrational”, non-economic motivations through its role in managing people’s investment funds in the aggregate in a perfectly egoistic way. Where once there were business owners who saw their firms as extensions of their personal, human goals and aspirations, and investors who placed their money in companies they believed in, with the advent of the modern business corporation we now have a market system which has been purged of human values, good and bad. Where once business were run by individuals who had an interest in and commitment to the product or service being produced, the modern, professionally-managed corpo- ration owned by widely dispersed shareholders (often, other corporations) sees the nature of the product as secondary. “What counts primarily is the magnitude and especially the rate of return on investment”, says historian Seymour Melman (1987a). He adds: “A prime attention to profit is nothing new in industrial capitalism, but a managerial style that includes disregard for the product, work force and community, and a readiness to move resources to wherever they will earn the greatest money return, has been extended and intensified by the growth in number and importance of conglomerates in the industrial world”, in other words, by the maturing of the corporate model. 61

Melman provides as an example the case of U.S. Steel Corporation, whose management in the 1970s and 1980s began investing heavily outside the steel industry. So heavily, in fact, that there were widespread rumours that U.S. Steel was getting out of the steel business altogether. These were scotched only when the chairman, David M. Roderick, told a stockholder’s meeting that, “We are both a steel company and a capital management company”, and that “we expect to be a steel producer for the balance of this century”. Nevertheless, most of the company’s capital investment continued to be directed outside the industry, while plant closures resulted in a steady decline it its ability to produce raw steel. “While the details are specific to the U.S. Steel Corpora- tion, they are part of an overall pattern—that of U.S. corporate managers following the practice of transferring money to whatever places offer the most favorable rate of return”. 62 The ultimate goal, Melman says, is profit without the untidy necessities of production. “Once corporate managements begin to treat the parts of their enterprise as money machines, the nature of the product becomes secondary. What counts primarily is the magnitude and especially the rate of return on the investment”. 63 When General Motors returned to profitability in 2004, it was noted that it earned more from its financial operations than it did from making motor vehicles.

The increasing focus on short-term rate of return leads to corporate decision- making that is frequently at odds with human welfare. Large corporations shut down even profitable subsidiaries so as to invest the savings in businesses which are perform- ing closer to the corporate goals for rate of return (often as high as 20 percent or more). Production, and the jobs it provides, not to mention the products themselves, is seen as having value only insofar as it contributes to the drive to maximize return on invest- ment. Social value per se is not part of the equation.

All of this, says Melman, is justified by “an array of social assumptions”, each of which may be challenged on ethical and/or factual grounds. Those assumptions are:

●  that making money is a proper ultimate goal for the operation of industrial enterprise;

●  that money made by each firm contributes to economic advance for all;

●  that production has value insofar as it contributes to profit;

●  that business fulfills its responsibility to the community by maximizing profit;

●  that institutions and practices which constrain profit-making, or introduce extra- profit criteria for industrial operation, are to be shunned. 64 We see here the eighteenth- and nineteenth-century Rationalist assumptions, undi- luted in their contemporary expression.

Who Manages Corporations? An important question raised by this history is why, as human institutions, do corporations so frequently act in ways that are clearly contrary to human interests? There are two, related, responses to this question. The first I will only briefly summarize as a full exposition is beyond the scope of this paper. It is a truism that corporations are expected merely to obey the law, whereas in human society, behavior is regulated, for the most part, by custom and convention. 65 For people, deterrence from antisocial and unethical actions comes in the form of a discomfiting subjective response (shame, embarrassment, remorse), or external sanction (public criticism, ostracism). Civil and criminal law exist only to curb behavior at the extreme limits of social acceptability. For most people, contact with the law enforcement and judicial systems is limited to the occasional parking ticket. It is not the law, but convention and decency that prevent us from engaging in socially inappropriate or destructive acts. Because corporations (not being human) are not subject to human social sanctions, their behavior tends to drift toward the extreme limits of acceptability, where the law begins to impose financial penalties that register on the bottom line, and therefore act as a deterrent. Some readers will want to object at this point that corporations, while not human in themselves, are run by humans, who do have consciences and do obey social mores. And that prompts the second response to the question asked in the preceding para- graph. The answer is that there is good evidence to suggest that corporations in fact manage their human “managers”, rather than vice-versa. We can certainly make the empirical observation that corporations often do not appear to be managed by humans, since they so consistently act in contradiction of human interests. Examples abound: corporate practices that are environmentally destructive; corporate disloca- tion of employee’s lives through “rationalization” measures; corporate exploitation of third-world workers; corporate resistance to regulation of the production of toxic chemicals; corporate concealment of harmful side-effects of widely-used pharmaceuti- cals; systematic corporate tax evasion (impoverishing the public sector); corporate suborning of information media; corporate promotion of the excesses of consumer- ism, etc. In general, it can be said that corporations specialize in the creation of what economists call “externalities”, which are the costly side-effects of the production of profit. They are called externalities because they are made external to the corporation’s interests and concern, and are instead turned over to the wider public to deal with. Air and water pollution are obvious cases in point, as are the social dislocations caused by the closure of factories.

But corporate “externalities” can be much more subtle than these, and at the same time more broadly influential. Sociologist Zygmunt Bauman has traced the rise and fall of the welfare state over the past sixty years and concluded, with compelling logic, that universal welfare measures were accepted without serious political opposition in Brit- ain and elsewhere following World War 2 because they served the interests of business, which would otherwise have fought to block their implementation. The safety net provided by the welfare state encouraged the development of a strong, healthy and well-educated workforce that was willing to take risks in employment, and was ready and able to be retrained in periods of joblessness. The same universal measures are currently under attack by proponents of “workfare” and “two-tier medicare” and “focused spending” (means tests), tax breaks for private schools, higher university tuition fees, and so on, because business no longer has a need for the same quality in its workforce or the reserve labour pool provided by the unemployed. 66 Domestic jobs are increasingly of the ‘McJob’, burger-flipping variety, and those that require serious drudgery are being shipped offshore, to destitute third-world nations. Social welfare measures no longer so obviously serve the interests of business, and so business now throws its weight behind proposals to curb this kind of spending and instead imple- ment cut taxes. Bauman (1998b) says that what “flag of convenience” decisions in exporting jobs, for instance, involve is the “promise of opportunity without responsi- bility, and [that] when such “making economic sense” opportunities come by, few sound-minded businessmen, hard-pressed by the stern demands of competitiveness, would insist on their responsibilities” (Head 2003; Henwood 2003). 67

This otherwise cogent analysis of the resurgence of classical liberal ideology is flawed, it seems to me, in that it demands that one accepts that the people who are responsible for “business” decisions of this kind are a species of monster, with no regard for human welfare. Or, what is equally difficult to accept, that they actually believe, in the face of abundant evidence to the contrary, that their individual acts of inhumanity will redound to the general welfare through some Utilitarian alchemy and that the world will be a better place for their callousness. I wonder whether the class of corporate élites can sensibly be taken to be so monstrous and/or fatuous. It seems to me altogether

more reasonable to suggest that, in fact, the “inhuman” decisions are being made not by humans, but by their master, the corporation. What is missing in Bauman’s analysis is an acknowledgement of the fact that no “businessman” in a position of corporate authority would ever, in any normal circumstance, choose responsibility over profit. One can of course imagine scenarios in which a choice for responsibility could be contrived to result in profit in some form, as in the case where “responsible” action is mandated and enforced by government authority backed by substantial fines. But this is not really behaving responsibly in a moral sense; merely prudently. It can be stated as a general rule of corporate life that to place responsibility ahead of profit is to fatally imperil one’s executive career. Corporations simply do not countenance authentic altruism. 68

The hypothesis that humans aren’t really “in charge” would immediately account for the fact that so many corporations commit acts of economic injustice, environmental degradation, social mischief and outright criminality—acts that their “managers” would never consider doing in their lives as private individuals. By all accounts, Lee Iacocca is not in his private life a person inclined to kill in return for money. And yet he and his fellow Ford executives permitted many deaths and injuries to occur when he could have prevented them by spending a relatively small amount of corporate money. What prevented him from obeying his human instincts in the Pinto case? 69 The same question might be asked of the managers of Nestlé or Esso or Shell or Dow Chemical or Monsanto or Nike or any number of other corporations that have been involved in deliberate actions that are clearly and obviously immoral. 70

From the corporation’s point of view, any act is right which improves shareholder return on investment, so long as it does not pose a risk of legal penalty serious enough to more than offset the projected gains. Intelligent, healthy humans can be expected to experience ethical qualms long before that threshold is reached. But humans working within corporations, at all levels, voluntarily submit to contracts, both tacit and writ- ten, that limit their actions to narrowly-defined parameters that serve corporate inter- ests. The constraint may be either internal or external. That is, corporate managers may be coerced by law, regulation and corporate policy into adopting corporate behavior, or they may do so willingly, in accordance with internalized beliefs. In either case—by coercion or by persuasion—the corporation is imposing its will on its human function- aries. 71 The corporate ethical system must be imposed (or learned) because it is essen- tially inhuman, that is to say, unnatural in a human context.

Sociologists have written extensively on the phenomenon of aberrant ethical behav- ior in the corporate setting. According to J.S. Coleman (1982), people employed within corporations act not as individual decision-makers but as agents of others—ultimately, of the corporate entity—and in this way avoid feelings of personal responsibility. Managers make decisions and give orders in the name of the corporation and not in keeping with their personal standards and values. 72 H.C. Kelman and V.L. Hamilton (1989) report on how “the psychology of giving and following destructive orders and making dangerously risky decisions takes on added import within a legal framework that assigns responsibility not to real individuals but to an intangible entity”. 73 According to L.E. Mitchell (1995), “No feelings of guilt are required, no attributions of

Social Epistemology 303

moral blame permitted, when the stream is polluted, the baby food is diluted, or the Pinto explodes. The institution defines the moral role, and in the case of the corpora- tion, the moral role is narrow indeed”. 74 Tomkins et al. (1992) have summarized the large literature on “psychological realities” of corporations that lead to increased risk taking on the one hand and failure to acknowledge moral and legal responsibility for harm on the other. These include diffusion of responsibility; role specialization; incomplete information; organizational culture; and management’s ability to punish nonconformity and disobedience. 75 David Luban (1989) sees three distinct ways in which corporate structure clouds culpability:

Psychologically, role players in such organizations lack the emotional sense that they are morally responsible for the consequences of organizational behaviour …. Politically, responsibility cannot be localized on the organizational chart, and thus in some real … way no one—no one—ever is responsible, Morally, role players have insufficient information to be confident that they are in a position to deliberate effectively, because bureaucratic organizations parcel out information along functional lines. 76

These sociological analyses, however, merely beg the question: do managers in any real sense manage corporations, or does the corporate entity actually manage its “managers”. The latter proposition seems, on the evidence, to be clearly the case. The corporate structure, with its rigidly-defined goals and its state-sanctioned and reinforced power to discipline, constrains managers to act in ways most would find unpalatable in another milieu. That is, it forces (or seduces) them to act so as to enhance corporate profit even at the expense of human welfare, from individual to species levels. To argue that managers do this willingly, in return for large salaries (that is, they act in their own material self-interest) is to commit the behaviorist fallacy of presuming that the coincidence of high salary and unethical action is a causal connection. It clearly is not. 77

Corporations and Technology

With this in mind, we can return to the observation that most technical innovations are produced by (and/or controlled by) business corporations, in the service of their single-minded goal of profit. And remembering that in structural (and expressive) models of SCOT, technical innovation arises out of social and institutional interactions that bring to the surface and prioritize needs that reflect the internal conditions of soci- ety, we can ask whether and in what ways the peculiar ontology of the business corpo- ration bears on this hypothesis.

Human goals and values are at best only weakly or indirectly represented in corporate decision-making about technology, or, for that matter, in any other aspect of corporate operations. The process is direct: corporations determine internally and in secret what technologies and innovations will best serve the goals of the corporation itself. 78 Because most technical innovation takes place within corporate R&D labs (or in corporate-sponsored university research), what determines whether a particular invention will be sought is a series of accounting considerations such as internal rate of return (IRR) and net present value (NPV). Publicly-traded pharmaceutical companies, for example, do not produce drugs in order to alleviate suffering and save lives: they produce drugs in order to make a profit and, in principal, if they found they could make more money selling snack foods, they would do so—indeed they would be required to do so by a century of statute, precedent and regulation designed to protect the pecuniary interests of their shareholders. Frequently, corporations buy up and deliberately suppress innovation that originates outside their legal purview on grounds that it will not serve that single-minded goal, and innovation by major competitors is routinely delayed and/or suppressed through patent litigation for the same reason 79. In a richly competitive environment, self-interested corporate decision-making can of course lead to socially advantageous outcomes in the sense of satisfying real social desires for products and services, because corporate self-interest—profitability—lies in serving public wants sooner or better than the competition does. In monopolistic or oligopolistic markets, this is less likely to be the case since corporate interests are linked to social interests only through the effective functioning of the competitive market- place. As perfect psychological egoists, however, corporations have a built-in proclivity to seek a monopolistic or oligopolistic market environment, because (absent effective anti-combines regulation) it is a demonstrably successful method of increasing profit. Their continuing success in doing so is today evident in almost every aspect of economic life.

When the role of the corporation is taken fully into account, it is clear that, at one level, a species of simple determinism is at work in the process of adoption of and adjustment to new technologies of all kinds. What determines whether a technology will be first sought, then developed and then marketed is its potential to improve corporate profit. Note that there is no necessary connection here with serving human needs or interests. As was documented by J. K. Galbraith in his groundbreaking The Affluent Society (1958) and The New Industrial State (1967), and explored further in the literature of a new generation of cultural critics and analysts 80, corporations increas- ingly create and then manage the markets they serve through advertising in mass media: these administered markets typically serve spurious or artificially induced “needs”. Modern marketing techniques also create spurious product differentiation based on brand identity and secure many of the benefits of monopoly markets in that way. Corporations thus seek to control both sides of the market equation: production and consumption. Much—perhaps most—technical innovation takes place within and in the service of this model. 81 The process, at this level, is the opposite of that proposed in SCOT theory: it suggests instead a species of technological construction of society, or TCOS. The technology we call the modern business corporation plays a leading role in determining the kinds of technologies that are developed and released to society, and it does so purely in consideration of its own self-interest, which reduces to profitability. At a higher level of analysis, however, it is obvious that the corporation itself is a socially-constructed technology, a product of Rationalist social moral and economic thought as applied to the capitalist paradigm. It was constructed so well, in fact, that it has proved to be highly resistant to modification or alteration in the face of its obvious inappropriateness to the contemporary world. It is as if the smoke-stack technologies of the industrial era had refused to allow themselves to be modernized and detoxified with the arrival of environmental awareness.

Locating Sites for Intervention

Since I share with Jennifer Darryl Slack the view that an important purpose of theorizing about technology and society is to help define appropriate public policy, I want to return to the question of sites for intervention. And to demonstrate how failure to recognize the role of the business corporation in determining the uses of technology can lead to ambiguity about causal relationships and appropriate points of intervention, I have selected, from many possible options, a case in point from another leading author in the field, Raymond Williams. It seems to me the case is an important one because its subject matter, the impact of violence on television, is a very real social concern (Comstock and Paik 1994). 82

Williams (1990) challenges deterministic notions of cause and effect in the relation- ship of media to society on grounds that such determinate connections cannot be reliably established. He cites the debate over the impact of violence on television as an example of “confusion” over cause and effect, and his description is worth quoting at length:

The ordinary assumption seems to run: “this society discourages violent behaviour; violent behaviour is constantly represented and reported on television; we need to study its effects on people”. But surely anyone looking analytically at the first two statements would feel the need to examine their quite extraordinary relationship. Of course the apparent contra- diction can be rationalized: the controllers of television are indifferent and greedy, governed only by the profit made from programmes which show violence….But this does not explain the odd relationship between “discouragement by the society” and constant representation by a major social communications system. Are we to assume perhaps that the television organizations are outside the normal social structure? But in all the countries in which the research is done the control and ownership of television systems is centrally characteristic of general social control and ownership and (in part) authority. When this is realized, it would be reasonable to say: “this society encourages violent behaviour; violent behaviour is constantly represented on television, its major communications system”. But the truth is that neither assumption will do. What we are really faced with is a contradiction within the social system itself. And it is then to the sociology of that contradiction that we should direct our primary scientific attention. [Emphasis added] 83

The difficulty lies in the italicized portions of the quotation. “Normal social structure” in this context is clearly not meant to include corporations (corporate media) as I have described them. Williams does acknowledge that the sheer size of investment in televi- sion leads to creation of “a social complex of new and central kind” 84, but nowhere does he specifically identify “the controllers of television” and “the control and owner- ship of television” with business corporations. Like almost all analysts, he treats them implicitly as human, or at least as institutions controlled by humans and thus informed by human (and therefore societal) concerns and interests (Korten 1995). 85 But modern business corporations are in fact “outside the normal social structure” in a significant sense. This is because they are artificial people, and do not respond to normal (human, social) ethical constraints on social behavior. This being the case, there is nothing “odd” or paradoxical about the juxtaposed statements: “this society discourages violent behaviour” (which it clearly does at the individual, family and community level); and “violent behaviour is constantly represented and reported on television”. If we understand that

(commercial) television is actually controlled by autonomous business corporations as described above, then the rationalization proposed and rejected by Williams can be accepted as a more or less accurate statement of fact: “the controllers of television are indifferent and greedy, governed only by the profit made from programmes which show violence”. This is in fact an accurate characterization of the autonomous and perfectly egoistic business corporation, and it would be true whether or not human society approved of violence: it would be untrue only if it could be demonstrated that the depic- tion of violence on television was unprofitable. We could, as Williams presumably does, blame television violence and its fallout on capitalism, but where would that leave us in terms of possibilities for intervention?

If we are to intervene in the process of technological development and dissemination in useful ways, we must, as Slack points out, be able to identify appropriate sites for inter- vention, and this in turn means having a clear understanding of the processes involved. It seems to me that current analysis is hampered by an almost universal confusion between human ownership and control over these processes, and corporate ownership and control. There was a time, less than a century ago, when the two could be equated, when the humans who founded great and influential businesses continued to control them in the name of human goals and aspirations. That time has largely passed and we are now dealing with what might almost be called an alien life-form in the modern busi- ness corporation. It is a technology gone amok and in urgent need of the kinds of disci- pline we impose on ourselves as humans in society. Only when this is recognized will we begin to experience real success in directing technological innovation and diffusion in the human, rather than the corporate, interest. Corporations, as can be observed in almost any daily newspaper, have no interest in the human interest. Intervention must be directed at correcting, or at least compensating for, this basic design flaw.

Notes

1. [1]  [1]

Bauman, Zygmunt. 1998. Work, consumption, and the new poor. Buckingham: Open University Press, p. 17.
The nexus between human, social institution and machine is set out in detail in two recent and valuable works: Mirowski, Philip. 2002. Machine dreams: Economics becomes a cyborg science. Cambridge: Cambridge University Press, and Hayles, N. Katherine. 1999. How we became post- human: Virtual bodies, cybernetics, literature, and infomatics. Chicago, IL: University of Chicago Press.

Slack, Jennifer Darryl. 1984. Communication technologies and society: Conceptions of causality and the politics of technological intervention. Ablex.
In what follows, I accept Slack’s position that a principal purpose of the study of SCOT is the providing of guidance for policy formation.

Ibid., 57.
Erroneously, I think, in the case of McLuhan. As Arthur Kroker has suggested, to understand McLuhan’s approach to causality it is necessary to look beyond his rhetoric and poetry to his Catholic, Thomist humanism, a philosophy rooted in free will, and in which there is little room for any form of determinism.
Slack, Communication technologies and society, Op. Cit., 58.
Ibid., 60.
Ibid., 58.

10. [10]  Ibid., 61.
11. [11]  Ibid., 62.
12. [12]  Ibid., 62.
13. [13]  Ibid., 81–2.
14. [14]  See Louis Althusser, Reading capital (Verso, 1979); Essays on ideology (Verso, 1984). Slack also consults related work of Althusser’s collaborators Nico Poulantzas and Etienne Balibar.
15. [15]  Slack, Communication Technologies and Society, Op. Cit. 82.

[16]
[16] Ibid., 86. [17]

18. [18]  Ibid., 89.
19. [19]  Ibid., 90.
20. [20]  Ibid., 90, 92.
21. [21]  See, for example, Noble, David F. 1977. America by design: Science, technology and the rise of corporate capitalism. New York: Oxford University Press, pp. 99–100 and passim.
22. [22]  “Rationalism” or “Rationalist thought” as I use the terms here refers to what is more properly called “scientific Rationalism” (also sometimes called “scientism”). This I would define as the position that science provides the unique path to knowledge, and that knowledge acquired in other ways is illegitimate. It is thus strongly characterized by reductionism. It is prominent in European thought from about the mid-seventeenth century through to the end of the Victo- rian era, though perhaps with waning effect in the late 1800s. But by then the ideology had been locked into major social institutions. Another key Rationalist idea—“progress”—is closely related to Utilitarianism. In the words of Northrop Frye, “under a theory of progress present means have constantly to be sacrificed to future ends, and we do not know the future well enough to know whether those ends will be achieved or not. All we actually know is that we are damaging the present … in history the continued sacrificing of a visible present to an invisible future becomes with increasing clarity a kind of Moloch-worship. Some of the most horrible notions that have ever entered the human mind have been “progressive” notions” … Frye, Northrop. 1967. The modern century. Toronto: Oxford University Press, p. 34.

[17] Ibid., 82.

23. [23]  A fact recognized in current rational-choice economic theory. See, for example, Frank, Robert H. 2000. Departures from rational choice: The challenge for public policy. In Unconventional wisdom: Alternative perspectives on the new economy, edited by Jeff Madrick. New York: The Century Foundation Press, pp. 9–29.
24. [24]  Adam Smith, as a moral philosopher, recognized and applauded altruistic behaviour. The Utilitarians, and most Classical economists, did not. In Utilitarianism and modern market theory altruism is reduced both for analytical convenience and as a matter of ideology to a form of self-interested or prudential behaviour.
25. [25]  Summary descriptions were routinely ignored by corporations, despite several court rulings that “object clauses” must be adhered to. In 1966 the courts abandoned this position when the Court of Appeal in “Bell Houses Limited v City Wall Properties Limited” approved an objects clause giving the Corporation power to: Carry on any other trade or business whatsoever which can, in the opinion of the board of directors, be advantageously carried on by the company in connection with or as ancillary to any of the above businesses or the general business of the company..”.. In 1989 a new Companies Act effectively eliminated the requirement to state the firm’s intended sphere of activity in its charter. The power to determine what activities a corporation might legally engage in was transferred from the courts to the corporation.
26. [26]  Similar laws were enacted in France in 1867 and in Germany in 1870. [Herbert Heaton, Economic History of Europe (Harper and Bros., 1936) 592.]
27. [27]  Fox, Dennis R. 1996. The law says corporations are persons, but psychology knows better. Behavioral Sciences and the Law 14: 343.
28. [28]  The definitive account of this transformation is Sklar, Martin J. 1988. The corporate reconstruction of American capitalism, 1890–1916. New York: Cambridge University Press,

Social Epistemology 307

308 W. Rowland

Ch. 1. See also Horowitz, David ed. 1969. Corporations and the Cold War. New York: Monthly Review Press, p. 77.

[29] Encyclopedia Britannica 1982, v5, 183. [30]

30. [30]  Melman, Seymour. 1987. Profits without production. Philadelphia, PA: University of Pennsyl- vania Press, p. 73.
31. [31]  I mean here ownership in the proprietary sense exemplified by company founders—to the degree that management theory has propounded something called “founders syndrome”. This is a corporate “pathology” characterized by a (founding) manager’s focus on product and customer, at the expense of profit. The late twentieth-century practice of incorporating share ownership in the pay package of senior corporate officers has given these managers a more direct interest in the company’s performance. However, the result has often been that corporate managers, increasingly nomadic in their employment, become interested in short- term goals designed to maximize share price (e.g., through layoffs and mergers), rather than goals that add genuine long-term value to the enterprise. It should also be noted that these managers exercise their power over corporate decision-making not through their stock hold- ings, which seldom amount to a significant percentage of total equity, but through their management positions.

32. [32]  One further qualification is necessary here: in twenty-first-century America, ninety percent of all stock is held by ten percent of shareholders; the top one percent of shareholders own half of all stock. Almost all of these large shareholders are other corporations, such as pension funds, mutual funds and insurance companies. Only a very few are individuals. These institu- tional shareholders, which now “control” the stock market (according to Moody’s Invest- ments), will of course operate as “rational economic agents”, and have no interest in their holdings beyond the returns they produce. If those returns fall, the rational course of action is not to mount a shareholder revolt or attempt to exercise corporate control by some other means, but simply to revise the portfolio. The fact remains that, in general, it is a rare occur- rence for shareholders to interfere in the management of modern business corporations, a fact that is testified to by the lavish news coverage such events generate when they do happen. Furthermore, most shareholder revolts are provoked by a perceived inattention on the part of corporate managers to the interests of shareholders, that is, by a perceived inability to maximize profit as “rational” economic behaviour demands. (Statistics are from www.efmoody.com/investments/institutional.html and Dollars and Sense Magazine: www.dollarsandsense.org/archives/2001/0301maier.html).
33. [33]  Noble, America by design, Op. Cit., xxvi. See also Sklar, Martin J. 1988. The corporate recon- struction of American capitalism 1860–1916. Cambridge: Cambridge University Press: “The corporate reorganization of industry that crystallized in the merger movement of 1898–1904 and developed thereafter to World War 1 marked the passage of a relatively mature American industrial capitalism from its proprietary-competitive stage to an early phase of its corporate- administered state. It marked, that is, the emergence of the corporate reconstruction of American capitalism”. p. 4.
34. [34]  It would continue to evolve beyond shareholder control and management domination to be deeply influenced by Wall Street rentiers.

[35] Bauman, Zygmunt. 1998. Postmodern ethics. Oxford: Blackwell Publishers, p. 139. [36]
[36] Nov. 21, 1864 letter to Col. William F. Eakins.

[37] Both quoted in Wasserman, Harvey. 1983. America born and reborn. New York: Collier Books, pp. 89–90, 291.

38. [38]  Beitzinger, Alfons J. 1960. Edward G. Ryan: Lion of the law. Madison: The State Historical Society of Wisconsin, pp. 115–6.From an 1873 address to the graduating class of the University of Wisconsin Law School.
39. [39]  Grover Cleveland, “Fourth Annual Message to Congress, 3 Dec. 1888”, Richardson, James D. ed. 1989. Messages and papers of the Presidents, Vol. 8, pp. 773–4.
40. [40]  Brandeis, in Liggett v. Lee, 288 U.S. 517 (1933).

Social Epistemology 309

[41] In Leviathan.

[42] Mayer, Carl J. 1990. Personalizing the impersonal: Corporations and the Bill of Rights. The

Hastings Law Journal 41; Flynn, J. J. 1987. The jurisprudence of corporate personhood: The misuse of a legal concept. In Corporations and society: Power and responsibility, edited by W. J. Samuels and A. S. Miller (eds.), Westport, CT: Greenwood Press; Fox, Dennis R. The law says corporations are persons, but psychology knows better, Op. Cit.; Benjamin, M., and D. A. Bronstein. 1987. Moral and criminal responsibility and corporate persons. In Corporations and society: Power and responsibility, edited by W. J. Samuels and A. S. Miller. Westport, CT: Greenwood Press.

43. [43]  Mayer, Personalizing the Impersonal, Op. Cit.
44. [44]  Corporate personhood and most of the Bill of Rights freedoms have been granted to corpora- tions in most other industrial jurisdictions, world-wide, often as provisions of international trade agreements. For the Canadian experience, see Mandel, Michael. 1994. The Charter of Rights and the Legalization of Politics in Canada. 2nd ed. esp. Chap. 5. Toronto: Thompson Educational Publishing Inc.
45. [45]  436 U.S. 307. See also Colonnade Catering Corp. v. United States, 397 U.S. 72 (1969) (exception for the liquor industry); United States v. Biswell, 406 U.S. 311 (1977) (exception for firearms industry); Donovan v. Dewey 452 U.S. 594 (1981) (exception for mining industry). Exceptions in these cases were based on the long prior history of government regulation.
46. [46]  447 U.S. 765 (1976)
47. [47]  Corporations thus achieved, “precisely what the Bill of Rights was intended to prevent: domi- nation of pubic thought and discourse”. Hawken, Paul. 1993. The ecology of commerce. New York: Harper Business, p. 109.
48. [48]  First National Bank of Boston v. Bellotti, quoted in Mayer, Op. Cit., 633.
50. [49] First Amendment right to commercial speech, Central Hudson Gas and Electric Corp. v.Public Utilities Commission 1980 (corporations’ right to commercial speech protected); first amendment negative free speech right, Pacific Gas and Electric Co., v. Public Utilities Commission 1986 (corporations have a negative free speech right not to be associated with the speech of others); fourth amendment freedom from regulatory searches without warrants, Marshall v. Barlow’s Inc. 1978; fifth amendment freedom from double jeopardy, United States v. Martin Linen Supply Co. (1977); United States v. Polk and Co., in 1971 asserted the “fundamental principle” that corporations enjoy the same seventh amendment rights as human individuals to trial by jury; seventh amendment right to trial by jury in a civil case, Ross v. Bernhard, 1970.

[50] Mandel, The Charter of Rights, Op. Cit., 231 ff.

[51] The concept of corporate personhood was written into Canadian business law with the passage of the Canadian Business Corporations Act of 1981.

[52] Mandel, The Charter of Rights, Op. Cit., 328–9.
[53]
[53] SCOC, Committee for the Commonwealth of Canada, 1991. In Mandel, The Charter of Rights,

Op. Cit., 295.

[54] Toronto Star, Nov. 15, 2003, A13.

[55] SCOC, Black, 1989. In Mandel, 285. [56]

[56] The Globe and Mail , July 17, 2004, B4.

[57] Mandel, The Charter of Rights, Op. Cit., 234. [58]
[58] Ibid., 239.

[59] For a detailed chronology and analysis see Mayer, Personalizing the impersonal: Corporations and the Bill of Rights, Op. Cit.

[60] These companies tend, in the long term, to go public and adopt professional management, as founders and scions die, lose interest or engage in internecine warfare. Although a minority among large companies, they tend to attract more than their share of media attention due to the personalities involved.

[60]

310 W. Rowland [61]

61. [61]  Melman, Seymour. 1987. Profits without production. Philadelphia, PA: University of Pennsyl- vania Press, p. 20.
62. [62]  Melman, ibid., 18.
63. [63]  Melman, ibid., 20.
64. [64]  Melman, ibid., 52.
65. [65]  In Adam Smith’s view, pursuit of self-interest beyond the bounds of propriety and decency— the control of “our mutinous and turbulent passions”—was ultimately restrained by conscience, a phenomenon he relates to the interaction of two psychological factors: our egoistic need for the approval (or “sympathy”) of others and our ability to imagine ourselves in the place of others. These are the elements of social psychology that make it possible for the market and other social institutions to guide us to self-control, the exercise of virtue and even altruism.
66. [66]  Thanks in large measure to the introduction into the workplace of information technologies, which make possible the employment of unskilled workers. Early optimism about IT producing workplaces populated by skilled, empowered workers (see, for example, William H. Davidow and Michael S. Malone, The Virtual Corporation (1992) has proved largely unfounded.
67. [67]  Bauman, Zygmunt. 1998. Work, Consumption and the new poor. Buckingham: Open University Press, p. 53. See also Henwood, Doug. 2003. After the new economy. New York: The New Press; and Head, Simon. 2003. The new ruthless economy. Oxford: Oxford Univer- sity Press which together document the sustained influence of traditional Taylorist corpo- rate management values throughout the transition from manufacturing to service economy and the widespread adoption of computer-based business management technologies.
68. [68]  Corporations value only the appearance of virtue, insofar as it can improve profit and reduce the likelihood of regulatory penalty. Authentic virtue may go completely unknown and unheralded, and therefore serves no corporate purpose.
69. [69]  Choosing “to kill several people [was] something that [Ford executives] would … not choose to do in their private capacities”. Thus, “an organizational rationality…need not be the simple sum of its members’ or leaders’ rationalities”. Paul Brietzke, “A Law and Economics of Coercion”, paper presented at a symposium on “Law and the Legitimation of Violence”, held at State University of New York, Buffalo, March 6, 1988, quoted in Wolgast, Elizabeth. 1992. Ethics of an artificial person: Lost responsibility in professions and organizations. Stanford, CA: Stanford University Press, p. 87.
70. [70]  General Motors has recently been successfully sued for $4.9 million (reduced on appeal) by six passengers in a Chevrolet Malibu that exploded in a collision. The case closely paralleled that of the Ford Pinto in that the company knew from its own testing that the placement of the gasoline tank exposed occupants to danger but, after a cost–benefit analysis, decided not to alter the car. Michael White, “Verdict finds GM at fault for burns”, (Associated Press July 10, 1999).
71. [71]  Employment law in many jurisdictions explicitly states that employers are entitled to the expectation that employees will exhibit corporate loyalty and not work against their employer’s goals and interests.
72. [72]  Coleman, J. S. 1982. The asymmetrical society. Syracuse, New York: Syracuse University Press.

[73]

73. [73]  Kelman, H. C., and Hamilton, V. L. 1989. Crimes of obedience: Toward a social psychology of authority and obedience. New Haven, CT: Yale University Press.
74. [74]  Mitchell, L. E. 1995. Cooperation and constraint in the modern corporation: An inquiry into the causes of corporate immorality. Texas Law Review, 73: 477–538, 523–4.
75. [75]  Tomkins, J., B. Victor, and R. Adler. 1992. Psycholegal aspects of organizational behaviour: Assessing and controlling risk. In Handbook of psychology and law, edited by D. K. Kagehiro and W. S. Laufer, New York: Springer, pp. 523–41.
76. [76]  Luban, David. 1989. Lawyers and justice. Princeton, NJ: Princeton University Press, p. 123. In a similar vein, the judge in the Dalkon Shield intra-uterine birth-control device lawsuit (itcaused widespread sterility among its users) found responsibility often impossible to pin down: “The project manager for Dalkon Shield explains that a particular question should have gone to the medical department, the medical representative explains that the question was really in the bailiwick of the quality control department, and the quality control depart- ment representative explains that the project manager was the one with the authority to make a decision on that question … It is not at all unusual for the hard questions … to be unanswerable by anyone from Robins [the manufacturer]”. Quoted in Luban, Lawyers and justice, Op. Cit., 124.

77. [77]  I would argue, with Karl Polanyi, Zygmunt Bauman, Charles Taylor and others, that people, to the extent that they are ethical egoists and materialists, are not born that way but must undergo years of training to mask or unlearn more natural inclinations, and that morality precedes (and is generative of) society. Corporate employees increasingly are required to undergo extensive ideological conditioning using such techniques as “team-building” exercises and “management retreats”. Some corporations have their own “universities”. At Motorola University, for example, the program “stresses team-building skills and the inculca- tion of the Motorola corporate culture”. Intel, the chip manufacturing giant, “spends more than $2000 per employee each year on skill development and inculcating both worker s and managers in the company’s basic values…”. [Davidow and Malone. 1992. The virtual corpora- tion. New York: Harper Business, p. 192.] But this is perhaps a separate issue. The lavish salaries and other rewards that accrue to CEOs, CFOs and their senior minions should in any case not be taken as evidence of their managerial potency, much less as a reflection of their value to society at large. The remuneration of senior corporate executives frequently bears no relation- ship to corporate performance, an anomaly alluded to almost daily in newspaper financial sections, with increasing bitterness. What, then, do these huge rewards represent? I would offer the tentative suggestion that they are what in other settings would be called “conscience money”. What is the price, one may ask, of complicity in the frequently immoral and inhumane actions and policies dictated by the corporate obsession with profit? What is the selling price of one’s humanity?
78. [78]  That is, which ones will best serve shareholders by maximizing return on their investment.
79. [79]  Noble, America by design, Op. Cit., Chap. 6.

[80]
[80] Notably, Stewart Ewan All consuming images: The politics of style in contemporary culture

(1976) and Captains of consciousness: Advertising and the social roots of consumer culture (1988); Zygmunt Bauman, Work, consumption and the new poor (1998); Neil Postman, Amus- ing ourselves to death: public discourse in the age of show business (1985).

81. [81]  This is of course the “consumerism” model. I have argued elsewhere that consumerism is a creation of the modern business corporation, evidence of which (beyond historical contigu- ity) is that as an ideology it so poorly reflects human needs and interests, and so admirably reflects those of the corporation. (Ethics and Artificial Persons, doctoral dissertation, Toronto, York University, 2004.)
82. [82]  Comstock, G. A., and H. Paik. 1994. The effects of television violence on antisocial behavior: A meta-analysis. Communication Research 21: 516–46, remains authoritative.
83. [83]  Williams, Raymond. 1990. Television: Technology and cultural form. London: Routledge, pp. 123–4.
84. [84]  Ibid., 31.
85. [85]  This is a fallacy indulged in even by leading critics of the corporation itself. One recent and widely-read book on the subject characterizes the central problem of corporate-sponsored globalization as one of “profligate greed” resulting in a transformation of human institutions worldwide, (as) a result of the sophisticated, well-funded, and intentional interventions of a small élite whose money enables them to live in a world of illusion apart from the rest of humanity…. The related market forces are deepening our dependence on socially and environmentally destructive technologies that sacrifice our physical, social, environmental, and mental health

[81]

[82]

[83]

[84]

[85]

312 W. Rowland

to corporate profits…. The problem is not business or the market per se but a badly corrupted global economic system that is gyrating far beyond human control. The dynamics of this system have become so powerful and perverse that it is becoming increasingly difficult for corporate managers to manage in the public interest, no matter how strong their moral values and commitment. (Emphasis added.) Korten, David. 1995. When corporations rule the world. West Hartford: Kumerian Press.

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