ILLUSTRATION BY TIM ROBINSONW
hat are corporations for? In
his 1962 book Capitalism and
Freedom, Milton Friedman gave
a blunt answer: profit. “Few
trends could so thoroughly
under mine the very foundations of our
free society,” he argued, “as the accep-
tance by corporate officials of a social re-
sponsibility other than to make as much
money for their stockholders as possible.”
Almost two decades earlier, Karl Polanyi
had a different answer. As he wrote in
his 1944 book The Great Transformation,
allowing profitto be the sole director of the fate
of human beings and their natural
environment would result in the
demolition of society.... Nature
would be reduced to its elements,
neighborhoods and landscapes
defiled, rivers polluted, military
safety jeopardized.... No society
could stand the effects of such a
system of crude fictions even for
the shortest stretch of time unlessits human and natural substance
as well as its business organization
was protected against the ravages
of this satanic mill.So who was right? Polanyi asked us
to look all around us for the answer, at
the innumerable laws, norms, and in-
stitutions that limit markets and at the
destruction an economy without such
limits caused in the past. His main ex-
amples were World War I, the Great
Depression, and World War II, a chain of
events that happened, he argued, because
society had failed to contain the demonsBooks & the Arts
PROPHETS OF INSTABILITY
How finance broke the modern corporation
by RICK PERLSTEIN
Rick Perlstein is the author of Before the
Storm, Nixonland, The Invisible Bridge,
and the forthcoming Reaganland.