Corporate Crime and Corporate Power

The question of corporate criminal liability is a question of corporate power.

That’s according to Charles R.P. Pouncy, a professor of law at Florida International School of Law in Miami.

Pouncy is author of, most recently, Reevaluating Corporate Criminal Responsibility: It’s All About Corporate Power (Stetson Law Review, 2012).

Pouncy tackles head on the increasingly popular idea that we should eliminate corporate criminal liability.

“The notion that corporations, and derivatively, capital, should be exempt from punishment under the criminal law — which expresses societal standards and expectations — is inconsistent with the expectations of most members of the communities that corporations inhabit,” he writes.

“This challenge against using the criminal law to control corporate behavior is a component of a larger struggle . . .to determine which forces will control the shape of future society,” he writes.  “It is a struggle about which institutions will structure the nature of the world we live in.”

“Will human societies be controlled by the institutions that have structured their existence for the last few thousand years —  kinship, community, religion/philosophy, and social provisioning?” Pouncy asks.

“Or will economic institutions, specifically the institutions of the corporation and capital, dominate society and subordinate its human members to the interests of its artificial citizens and their advocates?”

“The question of the corporation’s and capital’s accountability to the criminal law is one of the frontlines in determining whether the . . . principles organizing human societies are designed to serve the interest of corporations or of people. Therefore, this question is central to whether human power will be supplanted by the power of artificial entities.”

Pouncy says that before the modern age, “no society ever permitted itself to be controlled by markets” and citing Karl Polanyi, says that “markets have always been incidental to human life.”

It was not until the end of the eighteenth century that the possibility of the self-regulating market came into existence and with it “a complete transformation in the structure of society,” Pouncy writes.

The corporation has become the dominant institution in society, Pouncy says.

“It did not, however, obtain this position because of societal recognition of the corporation’s value. Instead, it has usurped the roles of other societal institutions to suit its needs and increase its institutional power. The corporation has colonized other institutional sectors such as education, whose institutional goal has shifted from pursuing and disseminating knowledge to producing workers and pursuing research with commercial applications. These sectors have become means to the ends of the corporation. Religion has been infected with the corporate-growth imperative, with churches the size of towns and profitability — prosperity serving as a proxy for spirituality. Politicians campaign on platforms to bring business practices to government affairs, or they use their wealth to buy political office as they would any other investment. Families view themselves as in need of business managers. And corporations, using what institutional economics refers to as mystification, have distorted our traditional symbols so ‘free enterprise’ becomes the corporation’s right to operate without regard to social values, ‘private property’ becomes a talisman to ward off socialism or other attempts to coordinate the economy, and ‘individual initiative’ becomes an excuse for union busting.”

Pouncy says that acquiring power using these institutional processes to distort and corrupt society’s symbols, and the redeployment of this power to further increase the corporate stranglehold on societal institutions, is consistent with what C. Wright Mills characterized as “higher immorality,” which is the “systemic violation of laws and ethics of business and politics.”

Pouncy says that over time, dramatic changes begin to be thought of simply “as the way things are.”

“Although society may not recognize the changes as they occur, the corporations who instigate these changes are consciously using technology, psychology, and even neurology to reconfigure institutional structure to reinforce their institutional dominance,” he writes.

“So it is to be expected that this higher immorality would also view criminal sanctions as an institution to be obviated in its efforts to increase corporate power. The symbolic messages sent by the concept of corporate criminality are one of the few institutional forces in place to confront these processes.”

He concludes that “the existence or nonexistence of corporate criminal liability ultimately is a proxy for corporate power.”

“The criminal law sends strong signals about societal values, and the concept of corporate crime symbolically supports the perspective that society controls corporations,” he writes. “Eliminating corporate criminal responsibility, like deregulation, privatization, dismantling the welfare state, and unrestrained capital mobility, takes power (or at least the perception of power) away from ordinary people and places it in the hands of the rich — whether natural or artificial beings. It further unbalances society’s institutional structure by removing official condemnation from the range of constraints on corporate power and subverting the public’s view of the appropriate reach of the criminal law. It further exceptionalizes the corporation and leaves the corporation free to test the limits of its power. Events like the Gulf of Mexico Oil Spill, Enron, and WorldCom have forcefully demonstrated how corporate amorality can devastate the lives of thousands. It is difficult to imagine how eliminating corporate criminal responsibility will benefit anyone other than the corporate criminals.”

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