Tuesday, July 25, 2006

The Corporation

Just finished watching the brilliant Canadian documentary The Corporation. It is brilliant, sharp, funny, entertaining and ultimately grim examination of what the film calls, "the most dominant institution of our times." And for someone like me, who has never looked up inside any law book in my whole life, it was also very educational and enlightening. For example, I didn't know that in the legal parlance the corporation is viewed just as a normal person with the same rights as any other real person would have. But since it is only a legal abstraction it has no moral responsibilities and is not bound by any moral law. It is this insight that the filmmakers use to compare it to a typical psychopath and find that it indeed displays all the symptoms of a psychopath.

The film is full of facts and is exhaustively researched. It goes into the history of the origins of private ownership and property rights and the origins of the concept of "limited liability." The film has an interesting historical anecdote to tell about the origins of corporate law. There was something called the 14th amendment of the US constitution which was meant to protect the rights of the black slaves who were freed but instead it was used by the clever corporate lawyers to ask protection for corporations. It all sounds slightly bizarre and kafkaesque but thats what it is.

Anyway, the movie then goes on to compile a laundry list of corporate abuses, all done in an extremely entertaining fashion, using vintage advertising, instructional videos and lots of talking heads. Most notably Noam Chomsky (of course) and Milton Friedman, who rubbishes (rightly I think) the idea of corporate social responsibility by saying, "can a building have a social responsibility?" and then says that any kind of social responsibility is against the very idea of why corporation came into existence in the first place, that is to make as much profit as possible for the shareholders. There are also academics and heads of industry giving their views. Most interesting was the CEO of Shell who recounts his experience with a small group of protesters who came to his house with banners proclaiming him a "murderer." He and his wife greet the protesters with a cup of tea and then he says that he is interested in the same things as they are as a person but as a CEO he feels helpless. There is also the head of a company which is the world's largest carpet maker telling how he turned green.

The main point that the filmmakers make is that it is not the persons running the corporation who do the evil deeds but it is rather in the DNA of the corporation itself. It is like a fascist bureaucracy, even a person with a normal moral impulse will feel helpless before the logic of profit making. Of course the classical economics says that the pursuit of profit ultimately results in overall social good, the invisible hand of Adam Smith being responsible for it. But it is applicable only under strict and theoretical assumptions involving well defined property rights. It basically means privatize river, sky, ocean, forests, basically assign ownership to everything and then the "externalities" will disappear automatically. What is interesting is the way corporations relentlessly find ways to "externalise" their costs in newer and newer ways, opening sweatshops in third world companies for example; by employing children and giving them starvation wages. And if you protest you will get a lecture on free trade and "comparative advantage" or by claiming that "it could be worse." -- people would die of starvation if Nike wouldn't have opened its sweatshops there!

Personally the most disturbing part of the documentary was where an advertising executive explains the research that her firm did on what she called "the nag factor" of children. These guys went on to hire professional psychologists and behavioral experts to find better ways to manipulate children's minds so that they could nag their parents into buying their products in a much more effective manner. Also the way it explains how the tyranny of consumerist culture forces us to equate our self-worth to the number of artificially created wants that can be satisfied is just brilliant.

There is lots more in the documentary, about water privatization, seed patenting, media muzzling, military-industrial complex, callous stock-brokers and war profiteers and much much more. It is a fantastic summary of lots of very important debates happening all across the world. In short it is just imperative viewing for everybody.

Some links: Official site here. This looks like a good website about how to protect children from advertising. An article on the film from The Economist magazine here. Finally, the wikipedia entry on Corporation and lots of reading stuff on this organization's website.


nevermind said...

Nice review. Found the movie depressing. Nag factor is called pester power in European corporatespeak and here's a brilliantly subversive attempt to use it for a worthwhile social cause http://arts.guardian.co.uk/features/story/0,,1794607,00.html

nevermind said...

Sorry about the bad link. It's actually right here

anurag said...

I think these types of documentaries are must-see. Its always comforting to know the source of shit, its the smell which is disturbing and that we cant do anything is depressing. Whether we, being part of all this, can do anything or not, the first step should be the spread the knowledge of shit-source. Thanks Alok.

km said...

Heard good things about this one and if you are recommending it, I am sure it is a good film (and it's not a sex-is-hell film!)

Anonymous said...

good post alok.

i agree with anurag about spreading the word.

will definitely see it.


Alok said...

nevermind: thanks for that link. it was quite interesting though it looks to me quite a long shot !!:)

anurag: understanding and knowing the facts is, I think, a part of solving the problem itself. And I think in this sense it is quite a "feel-good" movie... It gives you a perspective and shows you ways to look at things which are more informed and critical.

km: yeah, it was nice change from all those dark movies about sex :) It is quite good actually. Whatever be your political persuasions, left or right, or whether you are an expert or a layman it will entertain and inform...

estibin: thanks!

ventilatorblues said...

This is indeed a great film. I think economists dont really understand human behavior. If we did, we would not be maximizing "profits" in the first place.

Vidya said...

Will watch this one soon.
Corporate Social responsibility and namesake Ethics courses are the biggest farces at B-Schools..Forget B-School folks how many of us would like to work for an entity that gets dissolved once a project gets done? Not me. And other than controls and regulation all other solutions are impractical..

Forget corporations,eve n the so-called Not for Profit entities are no different either.I was recently learnt that churches and religious institutions, because as per US law churches are not required to be 501c(3) organizations.The makers of the constitution felt that "God" should not be subjected to human laws.So much more scope for misuse..

Also this commercial free childhood reminds me of parents who are advocates of "homeschooling" citing moral reasons.Organized Control and censorship (as against parental) are bad whether they are against evil corporations or noble bloggers or innocent kids :)

Alok said...

Vidya: You are such a liberal mom :)) I wasn't asking for censorship or any kind of official control or something. Just that parents should know that there are people out there, many of them experts in their field, who manipulate the impressionable minds of young children for their own private interests. Now it is up to the parents to do whatever they think is right.

vb: :) yeah and it will remain so till people realize that mathematical abstractions can not model the real world in its entirety.

tom said...

your posts about the corporation and eichmann in jerusalem resonate with interesting parallels: "The state as the arbiter of good and evil...the snuffing of human individuality and spirit" is not that different from the corporation acting soley in the interests of its shareholders. The CEO and Eichmann as bureaucrats, as 'cogs' in the machine, illustrate that the spirit of fascism and the spirit of capital are very much aligned.

As always, your excellent writing and interesting perspectives make your blog one of my favorite reading stops!


Alok said...

thanks a lot Tom for the kind words. Yes reading about Eichmann did make me aware of this parallel that you point out, the way corporations and many aspects of consumer culture are so hostile to any inward-looking life and how everything works in favour of mindless and shallow conformity. It is a profoundly disturbing insight in many ways.

Abhay S said...