Notes from the "The Corporation" presentation, part 3

Here are the last of my notes from the presentation for The Corporation. I’m going to gather them all into a single entry and post that entry next week.

You might want to see part one and part two of the notes.

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The Hockey Allegory

• The general feeling in professional

  hockey is “What happens on the ice, happens on the ice”. In the rink,

  you can commit all kinds of acts that would get you charged with

  assault in the real world.

• You end up with two selves: on the ice / off the ice
• A

  similar rule applies to corporations. Outside working hours, you’re a

  citizen with moral values and views. During working hours, however,

  it’s okay to do wrong things:

  • Use sweatshop or slave labour
  • Pollute
  • Break laws bercause the fines are inconsequential relative to the profits
• Under such circumstances, you live in a “bifurcated world, morally”
• In one extreme case, the CEO of Shell Oil managed to convince the Nigerian Government to have people hanged
• Distinction

  between corporate behaviour “off the ice” and “on the ice” is blurring:

  CEOs are taking favouring a “Howie Meeker” approach over the “Don

  Cherry” approach: Tom Klein (Pfizer) made an effort to refurbish the

  Brooklyn neighbourhood in which a Pfizer branch was located, the CEO of

  BP supports the Kyoto accord and BP even has solar-powered gas stations

Social Responsibility vs. The Coprporation’s Legal Mandate

• The

  problem with social responsibility is that it comes up against the

  legal mandate of the corporation. How does a corporation justify

  actions it takes to be socially responsible?

• The

  answer: Any “socially responsible” initiative has to be good for the

  company. All corporate acts must be in the corporation’s best interest

• The

  law demands that when companies do good, they must justify it in terms

  of self-interest. This is the “Best Interest Principle”: the head of

  the corporation has to act in the best interests of the company. The

  courts have interpreted “acting the best interests” as “maxmizing

  profit”.

• Example: Although BP’s CEO supports the Kyoto accord,

  he is also pro ANWR drilling. The reason? Supporting Kyoto costs BP

  nothing. They found efficiencies that allow them to follow the accord

  without losing money. At the same time, there is an opportunity cost in

  forgoing drilling in ANWR, and it cannot be conclusively proven that

  the porcupine caribou herd in ANWR will be wiped out or that the way of

  life for native people who depend on this herd will be altered

  irrevocably.

• Example: the Steven James story. James, a

  reporter, does a story on hormones given to dairy cattle, which end up

  appearing in their milk. He filed the story for FOX News. Monsanto came

  down very hard on FOX for allowing such a story to enter the queue, and

  threatened to pull all their advertising. FOX news killed the story and

  fired James.

Why did people who “ought to have known better” consent to be interviewed for the film?

• The

  people who consented to be interviewed are proud of what they do. They

  were, according to Bakan, “intrigued by the project, and were

  intelligent and thoughtful people” who wanted to engage in the

  discussion.

• Most notable case — the one that got the most laughter from the audience was Lucy Hughes.
• Hughes was trying to solve the main problem with marketing children’s goods: children don’t buy things, their parents do.
• Her

  solution: “The Nag Factor”. She realized that there were two levels of

  vulnerability: parents are easily manipulated by their children, and

  children in turn are easily manipulated by television. The trick was to

  turn kids into a live-in marketing department targeting their parents.

• Hughes

  looked at effective nagging habits: 20% to 40% of purchases were the

  result of successful nagging on the part of the child. According to

  Bakan, “entire coporate empires” live and die by the nag. Hughes was

  trying to answer the question “How do you create the ad that creates

  the right kind of nag?”

• “You have to admire the brilliance” of this, Bakan said.
• Lucy

  took this common-sense knowledge and turned it into a science. She got

  behavioural scientists to do research for her, and based on that

  research classified nags. For example, there are simple “I want it! I

  want it!” nags, and there are more complex “reasoning” nags, such as:

  “I want the Barbie Dream House so that Barbie and Ken can have a

  family” — these nags get an “Oh, how clever!” reaction. The best

  results are obtained when kids use both style of nags.

• She also classified 4 types of parents:
  • Deniers: Upper-middle class. Kids have to make good arguments in order to convince their parents to purchase.
  • Kid’s

    Pals: These are typically younger parents. They actually, if

    subconsciously, want the toys for themselves, and will look for any

    excuse to purchase.

  • Indulgers: These people — often single

    parents — feel guilty about not spending enough time with their

    children and purchase to compensate.

  • Conflicted (Bakan puts

    himself in this category): These parents resent the fact that their

    children are the targets of such intense marketing, but buy the toys

    anyway.
• Another interviewee: Milton Friedman. His assistant said: “If he’s bored with your question, he’ll walk out of the room”.
• Many CEOs said “no”, but not out of any explicit objection to the concept of the film, but because they said were too busy
• The

  corporate spy who was interviewed in the film has not ended his career

  by appearing in it. He is, in Bakan’s own words, “a master of disguise”.

Anti-globalization

• “Anti-globalization”

  is an imprecise term. A more correct term is “anti-a-particular-kind of

  globalization”. It’s against the neo-liberal kind of globalization that

  we’re experiencing.

• First signs of this movement: the

  APEC meeting in Vancouver in 1997. By this time, they’d already started

  making the film. The APEC demonstration was the first major mass

  demonstration of this sort, and arose from concern about the complicity

  of nation-states and corporations.

• “Deregulation” is a misleading term: it’s really just a shifting of control from government to corporation.

Government: Antidote to Corporate Malfeasance?

• You can’t have property rights and contracts without the state
• In the “Anti-globalization” movement, there is a sense that you can’t confront government anymore.
• Bakan

  says that still have to work with governments and even with political

  parties and “build more democracy around the shell of democracy we

  already have”.

• Corporations can still be influenced by

  governments; after all, there are no porperty rights nor contract law

  without government.

• The idea that we can somehow rely on

  socially responsible consumers, CEOs and shareholders to

  “self-regulate” is a myth — we still need some other mechanism, and

  that is government.

On Non-Fiction Book and Documentary Filmmaking

• Documentaries are likely to become a more popular type of film, considering the attention it’s been receiving lately. Cites:
  • The interest in SuperSize Me
  • Errol Morris’ recent Oscar
  • Mark Achbar being invited to a Vanity Fair party
• Documentaries can have influence: in the wake of SuperSize Me, McDonald’s announced that it will remove the SuperSize items from its menu. Its rationale: they want to “simplify their menu”.
• There

  seems to be an appetite for non-fiction books and documentary films.

  Bakan suggests that this appetite is driven by people’s opinion that

  that the world is veering onto a dangerous path and their need to

  understand the “why” and “how” behind things. They try to reckon what’s

  going on with the world. They come with their own point of view, but

  you know what that point of view is. Their format must be entertaining,

  moving, inspiring and humourous.

• Even if what the non-fiction

  book or documentary film’s content is dpressing, they are successful if

  their audiences walk out feeling hopeful, inspired, becuase they have

  new knowledge.

• Many good non-fiction books and documentary

  films take what their audiences intuitively sense, and build around

  them with evidence.

The Success of the Book

• There’s a lot of angst out there, and that has contributed to the book’s success. It’s angst over:
  • Encroachment of commercial values in the schools that their kids go to
  • The environment
  • Less job security
  • The lowering of safety standards
• A lot of this comes from governments’ giving more leeway to corporations.
• One

  very important part of Bakan’s message: this state of affairs isn’t

  part of natural law. Corporations are not forces of nature; they are

  creatings of our own making: we have somehow allowed our governments to

  hand over power to them, and we can take it back.

• Trying to provide “a sense of understanding and a sense of hope”.

What You Can Do

• In book, Bakan proposes what can be done in the near future
• “The fact that we can’t do everything doesn’t mean that we shouldn’t do something.”
• Start acting:
  • Join a political party
  • Join your school board
  • Do something
• We’re losing that sense of being citizens — if we lose that, we’ve lost the possibility of democracy
• See The Corporation web site for more discussion/ideas/ongoing dialogue

Q&A Session

People

I know fall into vicious cycle of avoidance and denial — things are

bad, and instead of changing the situation, they’re retreating and

avoiding it. How do you motiviate such people?

This is a

hard question to answer at such a general level. You have to talk to

your friends.  “If we care about issues, we should to talk about

them to people who something to us” — it’s part of being a family

member / community member.

You talk about the corporation

as a monolithic entity. They have different forms depending on where in

the world they are. Why didn’t you analyse the corporation in its many

forms?

The focus is different in the book and in the

film. In the film, we were looking at the US transnational for-profit,

publicly traded company, the institution having the greatest impact. We

tend to think of corporations in terms of difference — company X,

company Y, company Z, industry 1, industry 2, industry 3 — but I

wanted to convey the sense that corporations share the same

institutional structure. Once you abstract away the industry they’re in

or what they produce, the actual underlying institution doesn’t vary

much from corporation to corporation. Underneath it all, they are

entities whose reason for existence is to generate wealth for their

owners.

What about the relationship of the filmmaker to

the corporation? In some way you have to play into the corporation to

get published or your film shown.

True. The US book

publisher is Simon and Schuster, and they in turn are owned by Viacom.

The film was shot on Panasonic cameras, and distributed bycorporations

in the US, Canada, UK, Italy. They were shown in theatres owned by

corporations. This is proof that the corporation is the dominant entity

in our society: you can’t make anything without them. To try and make

something outside the sphere of their influence is “like saying you’ll

operate outside the monarchy in 13th-century England”.

It

seemed silly and ironic, but they thanked their corporate sponsors at

the awards ceremonies at Sundance. American filmmakers said of them:

“Well, those guys can joke about corporate sponsorships; they have a

whole public infrastructure supporting them.”

The problem: Public

broadcasters are under attack and privatization is a holy grail. We

should be concerned about the demise of public cultural institutions.

Certain people such as Michael Moore are stars, and have the appeal to

do what he wants, but most of us don’t have that luxury.

When you look at the success of corps in China, India — outsourcing — is this the beginning of reform?

Appeared

on a talk radio in the US. Heard from a truck driver: “I only buy

American, and I make wife buy American too. I’m a conservative

anarchist, but I don’t like the way things are goin’.”

We’re

losing jobs to the developing world: self-interested concern. This will

probably shape up to a major issue in the election and could be an

election winner for the Democrats.

Of course, there are

those such as Michael Walker of the Fraser Institute, who say that by

outsourcing jobs, we’re doing people in developing countries a big

favour. They’ll do slightly better than without us. Alturism isn’t the

goal, though, cheaper rpices are. The high-mindedness is over an

“incidental benefit” to these people. It’s the old “in a slave system,

the slaves are materially better off” argument. It’s “a morally

specious argument, and it’s always suprising to me when people make it

with a straight face.”

We need to twin policies to both protect

local jobs and support aid programs and redistribution of wealth [The

“R” word! I just felt a great disturbance in the Libertarian Force —

Joey]. We have to be willing to pay more so that people in the

developing world can have decent lives.

What do mean that corporations are required by law to act in these ways?

It’s

meant to safeguard investors, to guarantee that their money will be

used for the prupose they intended rather than to pay for some

manager’s vacation. It’s the Best Interest Principle.

How did you go about balancing appeal to emotion and appeal to reason?

There

is a difference between appealing to emotion and being manipulative.

Not all appeals to emotion are manipulative, and not all are for

profit. There is a difference between art for advertising and art for

creativity. In writing the book and film at same time, they influenced

each other: the film had more intellectual rigor, and the book had more

narrative and emotion.

How do you pose a political challenge to corporations, if they’re so powerful and pervasive?

If

you look at history, you’ll see that it’s often at the time that the

dominant forces seem most omnipotent that they are actually the most

vulnerable, whether it was the Church, the monarchy, or the Communist

Party. In the end, it was people’s willingness to stand up to these

forces that caused the chnage to happen.

Bakan: “I don’t know

what choice we have” other than to believe that we, as citizens, can

change for the better. Ultimately, we are the ones who empower the

corporation. We in essence created corproate law and property rights.

The institutions that we’re up against are institutions that we’ve

made. “Perhaps I’m an optimist, and perhaps I being naive, but

corporations aren’t forces of nature. We can change them.”

Other notes

• Other

  Bakan comment: Advertising encourages us to think in terms of our own

  self-interest solely, and tries to paint corporations as “good

  neighbours”.

• My

  personal rant: Will you people at this sort of Q&A session stop

  prefacing your questions with mini-manifestos? Just ask the damned

  question!