Joel Bakan: Creating a monster

Joel Bakan, professor of law at the University of British Columbia, has written a polemic about what he calls the "pathology" of the modern corporation. A film, also called "The Corporation", made with Mark Achbar (of "Manufacturing Consent" fame) won the audience award in the documentary category at the Sundance Film Festival, and will be released in the UK together with the book.

"I did psychology at university, and I learned that the fundamental definition of a psychopath is a person who is not able to be concerned about anybody but him or herself. When I went to law school and studied the corporation, I learned that the fundamental operating principle of the corporation was that it always has to serve its own self-interest, under a legal principle called the 'best interest principle'. So the connection was clear.

"We've created legally an institution that has only one objective, to create wealth for its shareholders. The pathology lies in the fact that it is unable--and the people who operate it are unable--to balance that against anything else, such as the public interest or concerns about the environment.

"Companies can do good, and say, 'We're going to be nice to the environment or to our workers', but they always have to justify their good deeds as strategies for promoting the wealth of their shareholders. Just as a psychopath can act in a quite charming way, but it is always for his own ultimate gain. This is true to the point where a director of a petrochemical company who said, 'I'm going to refrain from drilling for oil because I don't want to hurt the environment', would be acting illegally. His or her shareholders could sue that person.

"The corporation is a very successful tool for creating wealth, and creating wealth is an important part of what we do in society. The problem is that we have now given such great powers to this tool that we're becoming its tool rather than the other way around.

"In order to create wealth, other things have to be destroyed--the corporation has to try to get the highest prices it can from consumers for the lowest production costs, so it necessarily involves exploiting working people. What a corporation is designed to do is to externalise as many costs as it possibly can, because the more it can put its costs onto somebody else, the more money it saves. The incentives are to find the cheapest labour it can and to cut corners in terms of the safety of its products, because paying workers a decent wage and being respectful of the environment cost money.

"We also have a whole legal apparatus called the regulatory system designed to protect public interest from this machine, the corporation. We have trade union legislation, consumer protection legislation, human rights legislation. The trouble is that since the early 1980s, in both the US and the UK, governments have been reducing the effectiveness and strength of that regulatory scheme.

"The book--and the film--are really a call for some balance between creating wealth and all of the various public interests that are potentially harmed in the creation of wealth, in a context where we are constantly being told we need to accept deregulation and privatisation."

Joel Bakan The Corporation: The Pathological Pursuit of Profit and Power (Constable, 29th October, C p/b, £10.99, 1845290798)