Crisis of the Corporation: 6

The greater the spiritual importance of human institutions, the greater their potential for corruption and misuse. (See here.) The theological analysis of the corporation gives us a clue as to what has gone wrong – the reason why the corporation is in crisis today. The corporation has always presented an enormous temptation. Its legal form should always correspond to the essential relationship that determines its distinctive meaning. Once stripped of this reality, however, the corporation becomes an uncontrollable beast, a sociological mutant capable only of destruction. As it was with the Israel addressed by Isaiah and Jeremiah, and with the obstinate Corinthians who proved so problematic to Paul and Clement, and with the empty legalisms of the medieval kings and lawyers who used the institution of the Church for personal aggrandizement, so it is with the “robber barons” of the 19th century and the hedge fund managers of the 21st, who used the corporation as a smoke-screen to hide fraudulent financial dealings.

Corporate sin, however, is not corrigible by human action. It is a sin of wrong relationship. The only solution to wrong relationship is to be in right relationship; but no individual, nor even any group, can achieve this unilaterally. In the terms of the modern philosophy of the self (and the corporate self), a solution is impossible. This philosophy opposes the

Crisis of the Corporation: 5

Our series by Dr Michael Black and Stratford Caldecott nears its end.

It may be a hard thing to say in the modern boardroom, but the corporate relation we have been discussing is a theological concept. (Similarly, the notion of the human person started in Christian theology and has come to be universally accepted by the “secular” world. It began in the Jewish notion of an evolving Covenant between God and his People. In the later Christian understanding, both sides of this Covenant, divine and human, had come together in the one person, and the union between the two had been extended outwards through the mystery of baptism to create a “people of God” no longer confined to the descendants of Abraham – the people of the New Covenant (or New Testament). The relationship of mutual submission that binds God and humanity together in this Covenant – symbolized by the flaming torch that passes between the two parts of the sacrifice in the O.T. paradigm – is now understood to be none other than a divine Person, the “Holy Spirit”, who is the “soul of the Church”.

Modern corporate law emerges directly from the idea of this “supernatural” relationship of mutual service and commitment. In a very real sense the institution of the corporation is

Crisis of the Corporation: 4

Dr Michael Black continues our series on the Corporate Relation and its implications for the theory of business management.

In the Spring of 2010 the investigation of the mid-Staffordshire hospital was published. Its findings were remarkable. It found that

– Overstretched and poorly trained nurses turned off life-supporting equipment because they did not know how to work it.
– Newly qualified doctors were inappropriately left to care for critically ill patients recovering from surgery.
– Patients were routinely left for hours in soiled bedclothes and with no real hygienic much less medical attention.
– Non-medical reception staff were expected to judge the seriousness of the condition of patients arriving at Accident and Emergency.
–Doctors were commonly diverted from seriously ill patients to treat ones with minor problems to make the trust look better because it was in danger of breaching the Government’s four-hour waiting-time target.

In summary, the report said, the Mid-Staffordshire Hospital Trust had “lost sight” of its

Crisis of the Corporation: 3

Dr Michael Black continues our series.

The British Library has in the last few weeks exhibited its collection of Royal Manuscripts, which includes illuminated documents associated with many medieval English and continental sovereigns. Among these are several depicting the so-called “two swords” of secular and ecclesiastical power.

One of the most recent of these, from the sixteenth century, shows Henry VIII usurping the throne of King David – claiming the power of both swords, representing his absolute dominion over both State and Church. Henry, of course, was not the first monarch to claim such universal control. Another illumination from fourteenth-century France, Le Songe du Vergier, shows

Crisis of the Corporation: 2

Dr Michael Black and Stratford Caldecott continue a series of reflections on the corporate relation in crisis.

Concerns about the relationship of ethics to economics, and the moral dimensions and responsibilities involved in economic life, have been intensified by the modern experience of globalization, and the various cultural, economic and environmental crises associated with it. Great wealth has been generated, but also great poverty; great advances but also great social instability – suggesting to many that economic growth and progress, in the sense commonly understood, may be unsustainable in the long term. These questions are too huge to be dealt with in a single project or by a single group. Rather than focus on globalization, the market, the role of the State or the impact of our way of life on the environment, we have chosen to look at a topic seemingly narrower but equally fundamental, namely the unit of economic life known as the corporation, understood as a “projection” and instrument of the human person.

The rise of the modern global corporation dates from the mid-Victorian codification of limited liability, but corporate life has existed for much longer than this. The corporation

Crisis of the Corporation: 1

Dr Michael Black introduces a series of articles on the mystery and crisis of the corporate relation.

The Occupy movement has gone global over the last several months, spreading from New York City to London, to every developed country on the planet. Despite the cultural diversity in which it is taking place and the variety of objectives expressed by the participants, every location seems to have the same focus: mitigation or destruction of the power of the corporation. Whether the language is that of economic equality, environmental sanity, political freedom, or personal fulfilment, the object of ire, fear, and reform always includes the institution of the corporation, not merely as a symbolic element in global destruction but as the primary instrument of individual repression and social division in modern life.

But what is a “corporation”? There is something mysterious at the heart of the corporation that eludes purely secular analysis. There are many forms of human organization we understand relatively well: partnerships, clubs, nation states, and so on. The distinguishing feature of a corporation – a limited liability company, for example – is that it somehow possesses an identity, a life, independent of its members. It can act through its members, whereas in the other cases it is the members who act through the association, either individually or collectively. This is expressed in law in a variety of ways, but the most important is the rule that the corporation has its own interests, values, or criteria of choice, which are not those of its members. This is universally accepted without

Is this the moment?

With a mood of fear pervading the markets, the likelihood of another round of economic collapse, the traumas afflicting the eurozone, the resignation of governments, and a spreading protest movement seemingly directed against capitalism itself – not to mention the "Arab Awakening" in the Middle East, the weakness of American leadership, and a possible increase in climate instability – it seems we are living in another interesting time for Catholic social teaching. It may be that even secular economic institutions are prepared to listen. But what are we to say, without falling into the obvious traps? The principles of Catholic teaching are clear enough; the applications less so. This blog will continue to highlight interesting developments, but my main interest is to delve into something more fundamental, namely the fact that economic and political instability have a spiritual dimension. Our mistake is to think of these structures as mechanistic, neutral, implacable, entirely "secular". This way of thinking is part of the divorce between nature and the supernatural in our civilization. Our economic and political woes are all part of the spiritual struggle of our times.

Picture by Neil Cummins licensed through Wikimedia Commons.

A global Authority?

The document issued by the Pontifical Council for Justice and Peace (PCJP) under Cardinal Turkson on the global economy and the reform of monetary and financial systems in October 2011 generated a storm of controversy, and has since been roundly repudiated by the Vatican Secretary of State and pulled to pieces in L'Osservatore Romano. Presented as merely a “reflection” and not an authoritative statement binding on the conscience of Catholics, it may still be helpful to look and see what was asserted here.