Dissecting The Corporation: A Conversation with Joel Bakan

Joel Bakan is co-creator, writer and associate producer of THE CORPORATION and the author of a bestseller book upon which the documentary film is rooted, "The Corporation: The Pathological Pursuit of Profit and Power". Joel Bakan, a former Rhodes Scholar, a graduate of Oxford and Harvard and a law professor at UBC shared common concerns about the impact of corporations with his fellow filmmakers Mark Achbar and Jen Abbott. Katherine Brodsky met with Prof. Joel Bakan to discuss the film and the issues within it:

Katherine Brodsky: Do think that personally it was the timing that ended up playing out in getting this movie made?

Joel Bakan: When we began making the film, it was before Enron, Worldcom and all of that was happening. We started to make it because of the fact that the corporation was kind of changing. It was moving from being an economic institution that was governed by governments to almost like a governing institution that was governing governments. So it seemed in need of under-the-cold-light-of-day look and that is what motivated us to this at first. But over the course of shooting, Enron collapses, Worldcom, all this stuff is happening, to the point that when "The Corporation" is released, the issue is on everyone's minds. Not to mention the environmental and human rights concerns, so timing was definitely helpful. Had we brought out the film in 1997, when we first started work on it, I am not sure that it would have been as successful. But timing isn't enough in itself. If you don't have good film, people are not going to come see it, no matter how good the timing is. So I think it is a strong film and it created a lot of buzz because of that, but I think it was also definitely aided by timing – and continues to be.

KB: How did you start out seeing the concept on The Corporation?

JB: Well I am a Law Professor and I teach about corporations to my students, and I also did psychology as a degree. So early on in my psychology classes I learned what the definition of a psychopath is, in terms of what he is or isn't capable of doing. And as a law student, when you learn about the corporation, you learn two fundamental things: You learn that the corporation is a person and deemed a person by the law, and you also learn that the fundamental operating principle of the corporation is that it has to serve its own self's interests. So it is kind of an obvious connection that a person that is incapable of being concerned about other people, that's a psychopath, so that's where that idea came from. I guess the other thing about being a lawyer is that you learn to look at the corporation as a legal institution, in other words, you understand that it's created by the law, so it is an artifact – it's not a part of nature. It's not the building and the plants, but what it is really is a charter sitting in a corporate registry somewhere that's authorized by legislation. It's just sitting in a law book somewhere, so it is all kind of artificial.

KB: OK, So did, going through these interviews, and the whole process of the production, did your perception of the corporation change at all?

JB: I guess what changed for me and what was really the kind of revealing thing for me was that the people who grind nuts [CEOs], both personally and in watching them on videos and in thinking of the interviews and reading the transcripts, all seem to me to have humanity. They weren't these big bad capitalist. I think that one of the things that became pretty clear to me at the beginning was that it was both inaccurate and probably wrong to say that you know the problem here is about all these nasty people in corporations. But there was something about what the institute did to people when they were in corporations. This is where the interesting sort of "look" lay. And so you could have people who seem really sort of engaging and nice, that I believed that they are. I don't believe they are acting, or putting on a show, but at the same time, when they are in their role of being executives in a company, they take on the sort of moral egos of the company.

It's sort of like when you go to play hockey, when you hit the ice, you enter a moral world that is different from the other moral world that you inhabit. So, when you are on the ice, you can do things to people that would give you two minutes in the penalty box. If I did do that to you, right now, it would get me two years in prison. So I was thinking, the business world is kind of like that. You've got one set of vetoes and norms and morals in your life and then another, which is the corporate one, so it is like going around the ice when you go to work. It is like you are in a different moral world and you can make decisions that from the perspective of your "nice guy" persona you might think are appalling, but when you are in that role [of corporate decision maker], you are fine. So, I guess, that was the big revelation for me. This wasn't about vilifying the people. True, they made choices and they are morally responsible and we are not saying they are just innocent bystanders, but there is something really interesting and important in that we as a society have created an institution that is like an ice rink, that enables people to go in and be subject to this very different set of morals.

KB: I was watching a Gene Hackman movie, it was just on TV the other day...

JB: Legal Eagles, is that the name? He played a lawyer in that?

KB: I am not sure of the name. It's the one where a company makes cars that blow up...

JB: I had that story in my book.

KB: O.K., wow, what a coincidence. Was that a true story?

JB: Yeah.

KB: As you were talking, I was thinking about it. That is a perfect connection with what you were saying...

JB: Totally.

KB: ...And it is in the book

JB: I mean this one was General Motors and they would make cars that would blow up and I just want to show you the memo where they justified... [Shuffles through The Corporation book]

KB: Oh, it was General Motors! In the movie they did not mention that...

JB: No, they didn't. So this is the memo that they did [shows off the memo]. It had to do with where the position of the fuel tank and whether they had a metal brace. So if they made cars without a metal brace, where the fuel tank was too close to the... they anticipated they would have 500 fatalities a year. This is actually from an internal memo. It was estimated that it would cost $200,000 for each fatality, but there are 41,000 General Motors automobiles. So you divide that by $2.40 per automobile, to deal with the fact that people would be killed, it would have cost $859 per automobile, in order to correct the problem so people would not killed. They saved $8.59 cents per unit to continue to make the vehicle where they knew it would lead to 500 people dying a year.

KB: What do you consider to be a corporation?

JB: That's a good question. I think that there are many different kinds of corporations and some of them are not for profit corporations and the problem is not so much with the device of incorporating, but rather attaching the profit principle with incorporating. And I think as long as you have a legal set-up where the profit principle has to override everything else, the corporation can't be ideal. You can, however, have an economic organization that might be incorporated. It might operate along the lines of a cooperative that actually has various kinds of principles that will stop it from causing the kinds of harms that corporations generally cause. But I think ultimately, that's not where the solution lies. The solution probably lies with more stringent and more effective legal constraints on what corporations can do. I don't think you can play around with the internal structure or the corporation, but ultimately our goal should be...

KB: Regulation

JB: Yes, democratically controlling what corporations do to insure that they do what they do well, which is to deliver goods and services but they do it not at a great price to the environment, human rights, human health and all these other things. So it is really a question of finding a balance, I think, between what corporations do well and how much harm they cause in doing them.

KB: What can people do?

JB: Yes, well I talk a lot about this in the book, but primarily, what people can do is we still live in a democracy, we still have the power of citizens to get our government to do what is in the interest of the people and of the public and I think people should be demanding this. They should be joining political parties and being active in them. They should be active in environmental organizations, they should be active in dealing with these issues, and in trying to get government to be more democratic and get government to ensure that corporations are more accountable, and less harmful in what they do.

KB: Do you really think that a corporation is a psychopath?

JB: Yes. And I think not out of any kind of rhetorical or inflammatory kind of motivation. As human beings, if a person can only serve its own self-interest, we diagnose that person as a psychopath, a metaphorical illustration of the fact that the corporation is an institution that is legally mandated to serve its own self-interest. So to that extent the psychopath metaphor apart from being sort of a rhetorical or inflammatory device, was really meant to be an analytical metaphor and to reveal this truth about the institutional nature of the corporation.

We are looking at an increasing role of corporations in governing society because of an increase in privatization of various aspects of society. We hand power from governments over to corporations, we give corporations more freedom, more power, as we make it easier for corporations to merge and acquire one another, we enable corporations to get larger. So all of these tendencies are moving in the direction where democratic government is eclipsed by corporate government. What that means is that we, I think for the first time in human history, will be governed by institutions that are required to be self-interested. What makes the corporation different from other institutions throughout history, is that it does not have a mandate to serve the public interest, only itself. And I think the consequences of that could be, and likely will be, devastating. Whether it is in terms of human health and welfare, or in terms of quality or environmental and ecological destruction, I think in all those places, corporations do not have the capacity to look after interests that are other than their own.

KB: Do you think that without any regulations people within those corporations can push for other interests to be looked after other than their own? Because it appears as though the CEO does have some power, and the shareholders themselves can decide to support a corporate decision that helps society or the environment, despite lesser profits? The shareholders can also decide to protest actions that are damaging to our world... Don't they still have this power, without introducing regulations?

JB: I think that there is no question that if you take away regulations, if you rely just on markets, there will be some gains to benevolent CEO's like Ray Anderson in the film, and through shareholders requiring their companies to act socially responsibly to consumers. Boycotting this or that product, I mean all of that is good and all of that is welcome, but none of it is a substitute in my view for a democratic regulation. Because the problem with all of those things is that they are hit and miss and also are not democratic.

KB: What do you mean by ‘democratic regulation'?

JB: Democratic regulation is legal requirements, whether it is environmental standards or labor standards, which are ultimately made through the people by the government. In other words, we elect government and they make laws. Laws tell corporations they are not allowed to pollute streets. That is a democratic regulation. And it is enforced by enforcement officers, by agencies, and that whole system is designed in order to make sure corporations don't run up shop over public interest. Now if we could take those away, and rely on just shareholders and consumers and benevolent CEOs, I don't think we are going to get very far.

KB: Do you think there are any positive aspects to a corporation?

JB: Well I think corporations do a very good job at creating wealth for shareholders, so if you are a shareholder in a corporation, that is a positive. And corporations do a good job in providing certain goods and services, so no doubt that there is some benefit to that. We all depend on them for lots of things in our daily lives. The question is, at what cost are these things being done. They create a lot of harms and I guess our suggestion in the film is that right now, the harms and the benefits are out of balance.

Check out http://www.thecorporation.com to learn more about the film, where it’s playing, and even how to get involved in changing the world.

Comments? Email: [email protected]

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