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.