Authors / Joel Bakan: The Noam Chomsky of Kitsilano
April 02nd, 2008
During anti-APEC protests at UBC in 1997, a young law professor named Joel Bakan looked out his office window, grabbed his library card—to identify himself as a professor—and took his copy of the Constitution of Canada with him to monitor the Sgt. Pepper Spray demonstrations.
It proved to be a memorable day. The RCMP defined where protestors could respond. It was automatically impossible for leaders of China and Indonesia to witness the protestors, and vice versa. The mounting frustration of demonstrators as they tried to scale a fence made a strong impression on Bakan. Canadians protesting the presence of dictators in their own country were portrayed on the evening news as anti-social elements.
Having just begun to develop a film project with Tom Shandel and Mark Achbar, maker of Manufacturing Consent with Noam Chomsky, Bakan and Achbar roamed the campus with Achbar shooting proceedings with his video camera. That day became a turning point in their efforts to make The Corporation, the controversial documentary that has won the top documentary award at Robert Redford’s Sundance Film Festival.
“Most students in mid-1990s North America were building investment portfolios, not social movements,” writes Bakan in The Corporation: The Pathological Pursuit of Profit and Power (Penguin $37.00). “Yet here they were, thousands of them, braving pepper spray and police batons to fight for ideals. Even more unusual, the students were protesting against corporations—against their destruction of the environment, exploitation of workers, and abuses of human rights.”
In the wake of that APEC demonstration at UBC, anti-globalization protests followed in Seattle, Prague and Geneva. Then Wall Street scandals—at Enron, WorldCom and Tyco—confirmed suspicions that large corporations were often corrupt and largely out of control.
Bakan and Achbar, later joined by Jennifer Abbot, proceeded to gather interviews with CEOs, activists and philosophers—including Noam Chomksy and Michael Moore. They canvassed opinions across the corporate divide, from the likes of Michael Walker, head of the arch-conservative Fraser Institute, to Nobel Prize-winning economist Milton Friedman; from Oscar Olivera, who organized people’s protests to water privatization in Bolivia, to Ray Anderson, CEO of Interface, the world’s largest carpet manufacturer.
Now the film version of The Corporation has played to sold-out audiences across Canada. It won audience awards at the Vancouver, Toronto and Sundance festivals, along with the Joris Ivens Special Jury award at Amsterdam—the most prestigious documentary film festival in the world. It opens in U.S. and U.K. theatres in June.
Whereas Bakan’s first book called Just Words: Constitutional Rights and Social Wrongs was an academic work about the protection of free speech under the Canadian Charter of Rights and Freedoms, The Corporation is intended to be more provocative. As in the film, corporations are compared to Frankenstein, sharks and psychopaths.
To grab attention, Bakan has incorporated the work of Dr. Robert Hare, an expert on psychopathy, whose checklist to identify psychopathic behaviour is used around the world. By referencing that list, Bakan and Achbar have determined corporations are, by their nature, essentially psychopathic. They allege that corporations often exhibit a callous unconcern for the feelings of others, they lack the capacity to maintain enduring relationships, they often show a reckless disregard for the safety of others, they can be deceitful through repeated lying and conning others for profit, and they rarely have the capacity for guilt.
Bakan contends the legal structure of the corporation is to blame for bad behaviour in the corporate world. That is, when a business chooses to ‘incorporate,’ the people running the show get a benefit called ‘limited liability.’ It means a director of a corporation can’t get sued for wrongs committed on the job, so long as they’re done in the ‘best interests of the corporation.’ Those interests are defined, quite simply, as making profits for shareholders.
Bakan showcases the anti-social record of General Electric, a corporation with repeated environmental violations and hundreds of millions of dollars in fines. But even more telling is the example of Henry Ford. In 1916 the car-maker learned an important lesson. He had decided to return some of his company’s handsome profits to his workers, with the idea that they could use their higher wages to buy a Ford motorcar along with more wealthy Americans. Ford’s major shareholders, John and Horace Dodge, took Ford to court for this socialist concept and Ford was summarily rebuked by the judge for forgetting that a corporation could not be run “for the merely incidental benefit of shareholders and for the primary purpose of benefiting others.”
This case is still taught as an introduction to corporate law: students learn that it’s illegal for a corporation to do anything but make money for shareholders. Hence causing environmental damage or violating workers’ rights, can be justified in the interests of capitalism as a necessary part of doing business, particularly when profits can outweigh the costs of defending a lawsuit or paying a clean-up fine.
These days sophisticated marketing departments understand that people are disenchanted by companies that destroy the environment and exploit child-workers. The resultant new phenomenon of the socially responsible corporation is central to Bakan’s scrutiny. The likes of Kathie Lee Gifford and Puff Daddy have recently scrambled to press conferences to denounce their involvement with foreign sweatshops. Shell Oil currently has a series of television commercials portraying employees who look more like foreign aid workers than oil executives. The message about these bright and compassionate people is clear: “they don’t fight the oil company, they are the oil company.”
“There’s a sense out there today that because corporations can be socially responsible,” says Bakan, “they can regulate themselves, and we no longer need regulation from the government in the form of laws. There’s a real pairing of deregulation on the one hand and the appearance of social responsibility on the other, and that’s the point to which I object. It’s fine if CEO guys and gals want to be decent, but corporate benevolence is not a replacement for legal standards that constrain what corporations can and should do.”
Or, as Noam Chomsky has pointed out, “it is better to ask why we have tyranny than whether it can be benevolent.”
The Enron scandal shows what can happen when legal standards are eroded. In Bakan’s book, the Enron story isn’t just about worthless stock and lost pensions. Bakan traces how Enron began as a pipeline company, but soon moved into the more lucrative energy trade business. In the 1990s, Enron officials led by former CEO Kenneth Lay focused on political lobbying efforts to deregulate the trading of energy futures. Bakan describes a remarkable process of political fumbles as Enron succeeded in getting rid of government supervision of its business, by way of the Commodity Future Modernization Act. Once that law was passed, Enron used its newfound freedom to begin manipulating the California energy market.
Over the next six months, there were 38 blackouts in California. “The company helped manufacture an artificial energy shortage that drove the price of electricity, and consequently its profits, sky high,” says Bakan. Ultimately on December 7, 2000, millions of Californians were suddenly without power. California residents had to pay outrageous power bills for what power they could get. In June, 19, 2001 the Federal Energy Regulatory Commission finally responded by imposing price controls on California’s energy market. Enron was caught by surprise, left with billions of dollars of contracts worth way less than what they had paid. Enron filed for bankruptcy four months later.
Naomi Klein, author of No Logo, points out that modern-day activists protest in front of Nike Town instead of Parliament. Bakan maintains it’s time to return to government, and that the answer lies in changing the laws that regulate corporations. He cites Franklin D. Roosevelt’s depression-era New Deal as the first package of regulatory reforms aimed at “curbing the powers and freedoms of corporations.” That era came to an end with Ronald Reagan, and for the next 20 years the mantra of privatization and deregulation took over.
Since then, corporations have been vying with government to take over public services. Claims for greater ‘efficiency’ abound, but the privatization of essential public services is riddled with problems. Bakan looks at the example of Edison Schools, a U.S. business with 133 schools under its control. When Edison’s stock price fell it cut back on staff – 600 students in each school would make up for it with one hour of office work per day. When its Philadelphia schools weren’t making enough money, the company sold off textbooks, computers, supplies and musical instruments.
Michael Walker of the Fraser Institute has advocated for more private control of the planet and its resources on the theory that when you own something you take better care of it. “What about when the most profitable way to exercise your ownership might be to exploit your property?” Bakan asks. “Or when taking care of the things you own means causing harm to those around you?”
The guy who carried a copy of the Constitution of Canada into a public demonstration is not a radical Bakan is a former Rhodes Scholar and law clerk to Chief Justice Brian Dickson of the Supreme Court of Canada. He doesn’t advocate the destruction of the corporate structure, nor does he seek to vilify the business men and women who spend their working lives in the service of a profit-seeking enterprise. His work simply sheds light on the motives of corporations, in order to instigate public awareness about the need for regulated industries.
But the huge success of The Corporation – a three-hour documentary that has sold far more tickets than most Canadian movies – has put Bakan and Achbar into the spotlight, and spotlight has brought them some heat. The Vancouver Sun’s Katherine Monk was among those who criticized Bakan and Achbar for their acceptance speech at Sundance, a speech in which they noted moviegoers had voted for their film on a Coca-Cola-sponsored ballot. They thanked Coca-Cola, sponsors of their prize, for a taste of the future, when corporations sponsor everything including elections.
Bakan thought the crowd at Sundance appreciated the irony of the situation and they “took it in the spirit in which it was given, a bit of light-hearted ribbing from a couple of filmmakers who were standing there receiving an award for a film called The Corporation which was critical of the corporation in a context that was totally overwhelmed by corporate sponsors.”
But some commentators have accused Bakan and Achbar of impudence. Such a response reaffirms to Bakan a major treatise in their film, and his book—soon to be published in the U.S. and beyond. When corporations show their benevolent side, critical voices are expected to fall silent.
Essay Date: 2004