Why the ‘New Corporation’ is bad news for democracy

Joel Bakan begins his latest book, The New Corporation, by noting that, in 2019, “…the Business Roundtable, led by JPMorgan Chase’s Jamie Dimon and composed of more than two hundred of America’s top CEOs, heralded the dawn of a new age of corporate capitalism. Henceforth, the CEOs proclaimed, the purpose of publicly traded corporations would be to serve the interests not only of shareholders but also of workers, communities, and the environment.”

Bakan, a Professor of Law at the University of British Columbia (and a Rhodes Scholar), is skeptical.

For instance, he points out that, “over the last two decades, workers’ wages stagnated,” poverty and inequality skyrocketed, while good jobs disappeared and worker’s security decreased, along with the decline of unions. In the United States, mortality rates actually increased starting in 2014, thanks in large measure to “deaths of despair” from alcohol, opiates, and suicides. Racism, xenophobia, and toxic “masculinity” (sic) also increased, however—contributing to the rise of demagogues around the world, including Jair Bolsonaro in Brazil, Recep Tayyip Erdoğan in Turkey, and, of course, former President Donald Trump.

At the same time, the climate crisis has moved even closer to the point of no return.

Bakan argues that, rather than being a force for good, the truth is that corporations, “are a large part of the reason things have gotten worse so dramatically and quickly over the last two decades.”

He first explored this troubling concept in his 2004 book and documentary film, The Corporation: The Pathological Pursuit of Profit and Power, in which he explained that, legally, a corporation is considered a “person.” He then applied psychologist Robert Hare’s, “Psychopathy Checklist” to corporate behaviour—and guess what? There is an almost perfect match between a number of psychopathic traits, such as: lying and deception, lack of empathy, a parasitic lifestyle, and failure to accept responsibility for the consequences of their actions.

Bakan explains that a corporation’s legally defined mandate is to pursue its own economic self-interest, and that of its shareholders, while any harmful consequences are secondary considerations at best.

This last point is related to the idea of “externalities:” when profit-driven corporate activities cause harm to people or the natural world but they are not held responsible for the damage they cause in the pursuit of profit. For instance, the World Health Organization reports that, “Air pollution kills an estimated seven million people worldwide every year.” Moreover, the health risk is not confined to those who live near polluting industries. “WHO data shows that 9 out of 10 people breathe air that exceeds” safe guidelines, due to “high levels of pollutants.”

Worse, air pollution also includes microplastics, which invade our lungs when we simply breathe.

To put this crisis into perspective, about three million people have died of COVID-19 in the past 15 months. In roughly the same period, however, more than twice as many people died from air pollution.

The opioid crisis, which has killed at least half a million people in the US alone, was, in many cases, pushed by pharmaceutical companies which knowingly downplayed the dangers while hyping its efficacy. A review in the New York Times, of Empire of Pain: The Secret History of the Sackler Dynasty explained that:

By aggressively promoting OxyContin, their company, Purdue Pharma, ushered in a new paradigm under which doctors began routinely prescribing the potent and dangerously addictive narcotics. In the process, the Sacklers became fabulously rich, reaping, according to one expert’s court testimony, some $13 billion.

Similar criminal actions were described in a previous work by Bakan, Childhood Under Siege, where he presented a devastating account of how corporations target children in order to sell drugs, video games, and other potentially harmful products in pursuit of the almighty dollar.

The corporation’s unbridled self-interest victimizes individuals, society, and the living nature on which we all depend, in Bakan’s view. The problem has only grown worse as governments have freed the corporation from legal constraints through deregulation and granted it ever greater authority over society through privatization.

Moreover, when people’s lives get more difficult and stressful as a result of deteriorating economic and social conditions, “some of that blame and rage gets tragically aimed in the wrong direction”—towards immigrants, the homeless, people of colour, and other minorities. “Divide and conquer” is not a new technique, but it is effective.

So, if corporations are the problem, what is the solution?

Bakan puts his hopes on “a new and deeper kind of democracy… participatory, inclusive, and social,” rooted in community building and practising mutual aid. While such social movements are essential to building a truly democratic and healthy society, they are not, by themselves, sufficient. In the words of BC Grand Chief Stewart Phillip: “We need more direct engagement in formal political processes.”

Bakan argues convincingly that broad, democratic political movements are needed to effectively win electoral power in order to initiate and carry out necessary reforms such as those embodied in the Green New Deal. “The GND,” Bakan notes, “includes, among other things, rights to high-quality health care; affordable, safe, and adequate housing; economic security; clean water and clean air; healthy and affordable food; access to nature; and quality education.”

The climate crisis is probably the single greatest challenge that we face.

Progress won’t be easy, it won’t happen overnight, and one can’t know when the tipping point is reached. But it is vital to our survival.

As Bakan concludes: “No doubt creating a just and sustainable world is going to take a lot of work. But that’s what being a citizen demands.”

Ultimately, creating such a world is not possible in a corporate-dominated system, one that pretends to be progressive by, for example, being more inclusive regarding gender and people of colour. But that approach is often mere tokenism. Were the majority of people in the United Kingdom really better off with a woman, Margaret Thatcher, as prime minister? Or how about an African American four-star general, Colin Powell, lying to the United Nations about “weapons of mass destruction” in Iraq?

The deeper problem is one of class, and only a truly democratic socialist movement—one that takes on the system of corporate rule as a whole—has any chance to avoid an apocalypse.

The New Corporation: The Unfortunately Necessary Sequel, a documentary film based on Bakan’s book, was released on September 13, 2020. The movie is now streaming in Canada. Click here for more information.

Peter G. Prontzos is a writer and Professor Emeritus of Political Science and Interdisciplinary Studies at Langara College, Vancouver.