"The Corporation" -- Joel Bakan, Innis College Town Hall, University of Toronto, March 16, 2004

Joel Bakan, "This is Not a Reading Series", interviewed

These participant's notes were created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. These should not be viewed as official transcripts of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. These notes have been contributed by David Ing (daviding@systemicbusiness.org) at the Systemic Business Community ( http://www.systemicbusiness.org ).

Ian Brown who was supposed to do the interview is on assignment abroad

• Pages bookstore series with Now Toronto -- the process behind the book.

First, some clips from the movie/video series.

[Joel Bakan]

• Professor at UBC
• Previous book on constitutions

Came on January 16 to open the film at the Bloor Cinema, and the roof caved in.

• Cousins from the Bakan family, fiancee Rebecca Jenkins, ...

How did the corporation start up?

• 1997, had published on constitutions and rights.
• Reason that change not happening was rights in non-governmental organizations.
• Now with globalization, corporations are acting as governing entities, dictating political and social conditions.
• Had to start thinking about the constitution like the governing institutions.
• Was thinking of writing an academic book.
  • Activist intellectual, where work is published in places obscure to most people.
• Then coincidentally met Mark Ackbar:  had made the film Manufacturing Consent, about Noam Chomsky.
  • Idea to make a film about the book, but the book didn't exist, yet.
  • Seven years ago.
• Planned it, and it worked out.
• During most of the seven years, seemed like the film wouldn't happen.
• Took 3.5 years to get funding for the book.

Have to be of the world to make a comment about the world.  Thus, how did the pitch go?

• Did a lot of pitches
  • Trained as a lawyer, thus learned how to persuade.
  • Pitching in tv is not dissimilar to making cases in court.
  • A lot unsuccessful.
• Couldn't walk into Sony or Mirimax and say "want to make a film that says your institution is psychopathic"
• Tried public institutions
  • Turned down by CBC
  • Turned down by BBC
• Two reasons:
  • Film would be too edgy.
  • The other is that the film isn't edgy enough
• Want to look at the institution, but then they would ask, what would we see on screen?
  • Hadn't fleshed out the stories and metaphors.
  • Thus, people didn't see it as a tv show or film.
• Response as too controversial, calling the corporation a psychopath
• Vision Tv was the first broadcaster to come onboard, then TVOntario, then Telefilm Canada
  • Have to get broadcast license first, then can get funding.
  • Raised $1.4M.
• Need to treasure public broadcasting.
  • Wouldn't have been funded in the U.S., through telethons, etc.
  • Importance of the public sphere, that can deal with things that aren't commercial

The idea of bad apples?

• Core theme:  it's not just about bad executives.
• Looking at the institutions.
• Mark Ackbar is good at this, taking ideas and running with it.
• Got a satellite dish, and recorded everything with Enron.
• Tip of the large iceberg of people using this metaphor
  • 80% saying that is just some bad apples, 20% saying not

Learning curve to create something that would have an audience.

• Steep learning curve both on book and film.
• Jennifer Abbott did a brilliant job in editing the film, to give it an emotional resonance, with music.
• In the book, have tried to write a nonfiction book about economic issues.
  • Driven less by dry analysis, and more on metaphorical stories.
  • Relied more on interviews, story-driven.
  • Tried to draw the points out of stories.
  • Some stories in the book are the same, but some are different, because the media have different demands.

Ray Anderson, major in the film, is not strong in the book.

• Ray Anderson is CEO of Interface Corporation, carpet tile company.
  • On screen, he's compelling.
  • Good example of how media are different.
  • Could make the point about Ray Anderson in 2 to 3 pages -- had an epiphany.
  • In the film, he comes in and out.
  • Film is an emotional medium, and he's emotionally compelling.
  • In the book, to use him that much would have seemed strange.
  • Rebecca helped in editing the book, because wanted it to read well.
  • Treating Ray Anderson in a more substantial way didn't work.
  • He sounds like Jimmy Carter, he's from Georgia.

The idea of the psychopathology of the corporation.  How did you get to that?

• Did psychology as an undergraduate, and both parents are psychologists, and uncle is a psychologist.
• Psych 101, you learn about anti-social personality disorder: person who is pathologically self-interested, incapable of feeling for others, uses other people, feels no moral obligation.
• When going to law school, learned that a fundamental operating principle of a corporation is that it has to serve its own interests.
• Also in law school, learned that corporations are people.
• Thus, what kind of person is it?  It's programmed to be self-interested.
  • It's inbued with these characteristics.
• It's an analytical point that we've created this artificial person, and required it to be self-interested.

Tom Klein at Pfizer:  how could you say he's a psychopath?

• Not saying that he's a psychopath, the institution is a psychopath.
• Hockey:  what happens on the ice, happens on the ice, and they're normal people on the ice, but when on the ice, different rules apply.
  • You would be arrested off the ice.
  • Checking would give you 2 minutes on the ice, 2 years, off the ice.
• Same with the corporation, and Tom Klein.
  • Out of the corporation, you're a normal citizen:  normal life, moral, there's more to life.
  • As an executive, however, it's okay to contract with sweatshots, spew pollution into the environment.
• Thus, we have a bifurcated world.
  • In the book, more stories.
  • In the film, CEO of Shell:  seems like a nice guy, but under him, some people in Nicaraugua were executed.
• Over the past 10 years, the on-the-ice versus off-the-ice distinction is blurring.
  • Howie Meeker versus Don Cherry
  • Okay to check, but not too hard.
  • Era of more compassionate CEOs
• Tom Klein, at Pfizer, has made an effort to refurbish a neighbourhood, in Pfizer's original neighbourhood.
• Tom Brown, Shell, committed to the environment
  • Believesin supporting Kyoto accord.
  • Their gas stations are run on solar energy!
• The problem with social responsibility is that it comes up with the legal mandate that the corporation make a profit
• e.g. how to justify money for social activities?
  • Reason: it's good for the country
  • It's justifed in terms of self-interest
  • The law requires this.
• It's good that they made the neighbourhood better, and having solar-powered gas stations
• BP has eyes set on Alaska coastal plain, have been lobbying to have the plain opened to drilling
  • Porcupine caribou herd will be destroyed if drilling happens.
  • People who straddle the Canadian/U.S. border depend on caribou, and their life will be destroyed if drilling.
  • Say, let's exercise the precautionary principle:  let's not drill
  • John Brown is a leader in the precautionary principle:  don't know that Kyoto will work, but should do it.
  • Why not apply precaution to Alaska?
  • John Brown says that complying with Kyoto costs BP nothing.
  • However, foregoing the Alaska opportunity would cost BP a lot.
• If was precautionary, would be working against law.
  • Would be breaching the "best interest" principle:  maximizing the wealth of the shareholders, could be sued by shareholders

Profit versus truth:

• Steve and Jane story:  two reporters who wanted to break the story of enhanced drugs on cow.
• Pressure by Fox News
• Ultimately fired.
• Monsanto came on heavy, threatened to pull advertising for Nutrasweet.

Why is the film so successful?

• There's a lot of angst.
• People are looking at their world, and seeing the encroachment of commercial value in schools that children go to; jobs less secure; fewer protections for safety at work; social deregulation; the world is becoming more dangerous
  • The world is becoming more dangerous because governments are giving more authority to entities that generate profits.
• People feel this, in a real way.
• In the book and film, have dealt with this problem head-on.
  • Not only giving people some understanding, but some hope that they can change.
  • All of these things aren't inevitable, not natural law (although economists would lead you to believe this).
  • We can change this.
• Provide a sense of understanding, and a sense of hope.

Surprised to get some people participating in the film, that should have known better.

• e.g. Lucy Hughes, who knows how to nag, the creative energy behind the Nag Factor.
• Problem with marketers dealing with children is that children don't buy, it's their parents that buy.
  • This is a problem that she helped solve.
  • Have demand manifest itself in purchases.
• Have to admire the brilliance -- even though it's diabolical.
• Two levels of vulnerability:
  • Children by tv
  • Parents by children.
• Lucy turned this into a science
  • Understood what kinds of nag work in what situations.
• There are different kinds of parents:  four types
  • Deniers:  upper middle class, don't give their kids much, tight.
    • Kids have to create a good argument
  • Kids' pals
    • Buy for the kid, so that the parent can use it.
  • Indulgers:
    • Often single parents who feel guilty.
  • Conflicted parents
    • Resent that their kids are manipulated by commercials, but kids watch tv, and parents buy.
• Then, look at the effect of nagging:
  • In empirical studies, 20% to 40% of purchases (Chucky Cheese, theme parks) were the result of nagging.
  • Thus, some entire corporate empires are based on children nagging.
• Thus, for advertisers, how can you create the right nags.
• How to get her to talk?  She's proud of what she does.
• How to get Milton Friedman?  Wrote him, saying that he's done some work on corporate economics.  He wrote back that he didn't do that type of research.  Rewrote.
• Wrote to a lot of CEOs, but some busy.
• The ones that said yes were intrigued by the project
  • Intelligent people that wanted to engage

Mark Berry:  corporate spy, how could you show up on the screen?

• He's a master of disguise.
• There's more in the TVO version.

Antiglobalization movement?  Tap into this late in the film and in the book.  Education process.

• Antiglobalization movement is an unprecise term.
  • Anti- a particular kind of economics
  • Some activists are internationalists.
• Anti-neo-liberal globalization
  • Seemed the first time in North America, getting these mass meetings
  • 1997:  APEC meeting at UBC, Vancouver
  • First one on complicity between corporations and nation states
• In the book, take on some ideas of the people in the movement
  • That we should give up on government.
  • But the corporation is a creation of government, and the market is a creation of government.
  • Deregulation
  • Can't have corporations without the state.
  • Thus, the state is a progressive place for creative struggle.
  • In some antiglobalization movements, think that the governments are past hope, thus should be on the streets directly against corporation.
  • But this isn't sufficient, still need to work with governments, and even political parties, e.g. the NDP.
  • Have to try to deepen the democratic nature, around the shell of democracy we already have.
• In the book, the basic idea that we can rely on socially responsible consumers, benevolent CEOs, and socially responsible shareholders is a myth.
  • We still need other mechanisms.
  • Common view among activists that corporations can self-regulate.
    • This is a dangerous myth.

The rise of documentaries:  Mark Ackbar at the Vanity Fare Oscar party; Super size me, McDonald's will remove the supers.

• An example of how documentary film making can change the world!
• The filmmaker, as a result of eating at McDonald's for a month, had serious liver problems.
• Documentary films -- at Toronto, Sundance, Amsterdam -- may be in renaissance.
• Something to do with angst, that the world is careering off on a different path, and they're not getting the informatoin they need from the media.
  • On the news, good things and bad things randomly happen.
• Renaissance for this type of non-fiction book, too.
  • Try to reckon what's going on in the world.
• A deep analysis of what is going on, sometimes moving, sometimes entertaining and moving.
• Getting it all in a documentary film:  wonderful educational experience, and getting a grasp of what's going on.
• People feel empowered by the knowledge.

The Internet:  a place where people's voices can be heard.

• Yes, internet for disseminating
• Uneven, but a font of information
• The Corporation project on the web allows ongoing discussion:  iCorp.
  • In development

Grassroots political level, what should we be doing now?

• The most difficult question.
• At a general level, have to realize that the fact that we can't do everything doesn't mean that we shouldn't do something.
• Seems like we're paralyzed, but this is wrong.
• Just need to start acting
  • Schools to get pop machines out, ...
• Need to reactivate citizenship
  • We are the governors ourselves in a democracy.
• In the book, propose some things that can be done.
  • The general theme:  at the end of the film, Michael Moore say "just do something"
  • We're losing the sense of being citizens, and thus will lose the sense of democracy.

[Questions from the audience]

Some enjoying what we can, being cynical.  How do you motivate people?  (To get off their duffs).

• People have to talk to their friends.
• If we care about issues, we should talk to people about those issues, and inspire them.
• This is what it is to be a member of community, a workplace, ... to have these dialogues, and inspire others

Talk about "The Corporation" as a monolith, but around the world, the corporation takes different forms, with different rights and limits.  Why not a comparative analysis?  Varieties.

• In the book, more explicit about this.
• Looking primarily at American, transnational, publicly-traded institution.
  • In the distribution of corporate wealth, this is the institution that is having the greatest impact.
• Also, when we think of corporations, tend to think of differences (some corporations are good, and some are bad).
  • Wanted to convey the sense that the corporation isn't a sum total of these characteristics, but that they all share the same structure.
  • Created by law, without much variation.
  • Japanese corporate law, European corporate law, American/Canadian, but all have the same operating principle of maximizing wealth for shareholders.
• This model is one of the major exports of the U.S.
  • The American model of the corporation is being adopted worldwide.

Have to play into the corporation for publication and distribution?

• Simon and Schuster, Penguin, shot on Panasonic cameras, showed film in corporate-owned theatres.
• One of the theses of the project is that the corporation is dominant, and you can't operate outside of it.
• In the 13th century, couldn't operate outside monarchy.
• Michael Moore makes the comment that he shows on tv, thus giving the rope to hang himself.
• See it more as a necessity, to get distribution.
• At Sundance, when won the award for best world documentary, seems strange to have to thank the corporation, so made some jokes.
  • One person said can make jokes, because in Canada have a public infrastructure for documentaries.
  • Have to rely on public  broadcasters and agencies in Canada.
  • The problem is that public broadcasters and agencies are under attack.
  • Far from expanding Telecine, Access, TVO, ... all these institutions are under attack.
  • This is another area that is ripe for activism:  should be concerned about the demise of public institutions
• Even to write the book, needed the money to go to interview people.
  • Relied on the film budget, based on public institution.
• Michael Moore is exceptional.
  • Makes films where he's at the center, and he's compelling as the star.
  • He has a market appeal as a star, can go to broadcasters, etc.
• If you're doing documentaries without this star appeal, are dependent on the public system (and friends and parents who throw in money).

Success of corporations, economic boom in China and India; prospects of jobs; could this be the beginning of reform?

• The book came out in the U.S. a week ago.
• Did talk radio, nationally syndicated.
• Hearing from a truck driver, "I only buy American, I'm a conservative anarachist, but don't like how things are happening"
  • Strong middle America concern on losing jobs to the third world.
  • Kerry is talking about this, Edwards is talking about this, and it could be an issue in the election, it could be an election-winner for democrats.
• The problem is deeper than that.
  • Michael Walker, Fraser Institute:  we're doing a big favour to people in developing worlds by exploiting them, because they're doing better than otherwise.
  • Says that low wages are good for the developing world, "good as slavery", materially better off than if free.
  • This isn't an argument that we'd like to make.
• Have to think about:  when trying to create policies that ensure jobs don't go offshore, have to have an idea of a plan to deal with the radical inequalities of wealth in the world.
  • Have to be lobbying for better labour standards; aid programs
  • Have to say as consumers that are willing to pay more, so that people in the developing world can live better.
  • In the U.S., people don't deal with this latter issue.
• The solution of getting Nike and others to pay slightly better is morally specious argument.
• Always surprising when people make this argument with a straight face.

When did this philosophy of maximizing profit take place?  Companies used to build areans. golf courses.  When did the corporation change?

• Over the last 30 years, the ideas that used to percolate -- loyalty to community -- is gone.
• Actual stucture of the corporation as self-interested can be traced to the middle of the 19th century.
• With industrialization, needed large pools of capital to create railroads, etc.
• Investors were wary of corporations, with risks
  • Thus, limited liability.
• Also, the self-interest principle:
  • How do I know that the managers will use the money for the shareholder's benefit.
  • Then unblinkerly, legal interest.

Preparation of book and film are two processes:  intellectual and emotional; how to appeal to both of those levels.

• Difference between doing emotional appeal and emotional content, and being manipulative.
• Not all appeals to emotion are manipulative.
• e.g. difference between creative process in advertising, and that in creating documentaries.
• Fascinating process, because film is an emotional medium, sensorial.
  • Believe that haven't manipulated, but educated hearts and minds.
  • Ended up with a film that was intellectually more rigourous, because it was made in the context of a book.
  • In addition, the book was more emotional, more narrative, than otherwise.
• Two projects work nicely together.

A picture of corporations as so dominant, where a few wealthy people control people and government.  How can you propose a challenge?  What force can take them on, to take on a whole society?  Is is possible for the NDP to influence this?  Can they counteract the forces of management?

• When you look at history, you see that dominant orders come and go.
  • When you're in the middle of them, they seem inviolable.
  • Church, communism -- not immune to history.
• When they're most omnipotent that they're the most vulnerable:  people get sloppy, and there's a feeling of need to legitimate themselves.
• Don't have other choices.
  • We have the power to change things, and need to become citizens again.
  • Technically, corporations are nothing more than papers that sit in Delaware and New York.
  • We create these through laws.
  • We made these institutions.
• We're not up against forces of nature, we can be political and challenge these.

Alternative reality.  Advertising as manipulation of the dominant fantasy.

• Advertising has many effects
  • Makes us think as self-interested
  • Makes corporations seem like neighbours (e.g. State Farm is there)
• Can't ignore pervasive and corporate landscapes, such as buildings and private spaces.