By Richard Eriksson on June 21, 2004 - 4:34pm
On June 1st, I conducted an interview with Joel Bakan, author of The Corporation: The Pathological Pursuit of Profit and Power. The book is the selection for the One Book, One Vancouver city-wide book club. In it, he argues that publicly-traded corporations, in their Anglo-American form, are effectively psychopathic organizations, and that we need to redemocratize government in order to constrain the destructive behaviour of corporations.
Google famously has as one of its internal models "Don't Be Evil". In your book, especially with the case of the Body Shop, you suggest that any privately-held corporation inevitably faces pressures to act amorally when it goes public. Can you comment on how this might affect one of the most anticipated public offerings ever?
I think Google's founders are both a couple of guys with some high ideals which have been to some degree reflected in the way the company has been run in terms of its having a very good workplace and good employee programs, and now that they're going public they want in some ways to be able to ensure that that kind of approach continues. So they've effectively put in place this notion of "Don't Be Evil".
Now I think there are number of problems with that. The first one is: what is evil and who is going to be deciding what evil is? You can go a long way in terms of putting in various kinds of relatively normal employment practices without it being evil. Obviously if you're paying people slave wages and whatnot that would be evil, so that's the first question, but the second and I think the more profound question is: how is that idea of "Don't Be Evil" going to fit with the legally-compelled mandate of the directors and of the managers of that company to serve the best interest of the shareholders of that company? And that I think is where the problem lies. "Don't Be Evil" is a nice kind of phrase, kind of mission statement, kind of notion. But ultimately there's a legal duty and a legal obligation on the part of the company's directors and managers to do whatever needs to be done to ensure that the best interest of the shareholders are served, and that means the best financial interest of the shareholders.
You are skeptical in both the book and the film about corporate social responsibility.
Why does a company engage in environmental programs and environmntal advertising? I guess the point I'm trying to make in my book is that they do it and they have to do it because it's in the best interest of the company, because it somehow creates a better market share and competitive advantage for the company. Now that doesn't mean that it's something we shouldn't support or that it's not a good thing. The question is how far can you go with that, because the company is always going to have to be calculating whether doing good for the environment will in fact do good for itself, and I think there will be many instances where it doesn't, and in the book I talk about one example example of that with British Petroleum. This is a company that has taken the lead in enivro-marketing. It's a company that the CEO has embraced the Kyoto Accord unlike other petrochemical companies, and he considers himself to be an environmentalist, and they have many wonderful programs in place. But at the same time, when it comes to the question of whether they will drill in the environmentally sensitive National Wildlife Refuge in the Arctic, John Browne, the CEO of the company is not willing to say "No, we won't drill." Basically, if he refrains from drilling out of his environmental convictions, even if drilling would be a benefit to the company and its shareholders, he'd be acting illegally. His shareholders could sue him for that. He doesn't have that authority. So he can only take environmental action that that ultimately will serve the best interests of the company and that means maybe he can support some sort of clean air program in a city or the Kyoto Accord, but he can't refrain from drilling that ultimately will be potentilally very profitable, even if it might have very harmful effects on the environment which this kind of drilling is expected.
The Economist review of the film—which did not talk about the book—was generaly positive. It did have this to say, however: "The film has nothing to say about the immense damage that can also flow from state ownership. Instead, there is a misty-eyed alignment of the state with the public interest. Run that one past the people of, say, North Korea." How do you respond to the critics that say "Yes, but government is also capable of bad things"?
Nowhere in the book or the film do we say that government is some kind of a benign entity. Quite to the contrary, we have the examples of Nazi Germany, which is clearly a case of a government that was up to evil. We also made the point—and it's a point that has to be remembered—that the corporation itself is the product of government, and that policy concerning restraining the corporation is a product of government. What I say in the book is that democracy is something that we have to reconsider and reconceive and revitalize. Nowhere do I suggest that North Korea is some kind of panacea and a better alternative than corporate America. What I suggest is that government, when it is democratically-run and democratically accountable—and I mean democratic in a much deeper and broader way than we experience in our current so-called democracy—has a substantial role to play in constraining and channeling the actions of the entity that it creates, namely the corporation. So my feeling is that the Economist piece was trying to be a little bit inflammatory, but it's not a criticism of the arguments that in any way, I believe, addresses the actual arguments that I make in the book or that we make in the film.
Lawrence Lessig has written quite a bit on how copyright and how corporations use it to control culture. You don't seem to comment a lot about that in the book.
It's an issue that I'm very interested in and concerned about. We talk about patenting in the film which is an issue concerning intellectual proprty much the same way as copyright does, because it takes things that you might want to keep in the public domain and actually puts them into the private domain.
In the book I had to make choices in terms of space requirements, in terms of time. I was really interested in getting at the general issue of the institutional dynamics of the corporation, choosing examples and stories that would help illustrate those. There was a world of possibility to choose from and I made the choices partly on the basis of what stories worked and partly on the opportunistic basis of who we had access too, what interviews we were able to do. But obviously there are many issues that could have been dealt with that I didn't deal with. Writing a book like that, a book called The Corporation could just as easily be called The World: it's an endless subject so you do have to make choices what best illustrates your points and your premeses.
Related to that, how would you charactize using the Internet for positive activism?
I think the Internet becomes a very, very important tool for activists in terms of revealing the kinds of things what corporations are getting up to that citizens should know about, whether it be environmental harms or worker harm. It's a fabulous mechanism for that. And it's a fabulous mechanism for organizing non-governmental organizations, demonstrations, for creating communities both virtual and real.
However, I don't believe in the end that it's a substitute for effective governmental control. The whole difficulty I think that that we're facing now is the question of who is going to ensure that corporations are accountable. The problem with leaving it to activists and non-governmental organizations—even with the tool of the Internet at their disposal—is that those organizations and those people don't have the legal right to compel corporations to disclose information, and that is something that governments can do. Governments can can send inspectors to companies. Governments can put legal requirements in place to disclose information that consumers and workers and other interested people need. Non-governmental organizations don't have that legal power and to me, that's what imposes substantial limitiations on how far we can go with trying to keep corporations accountable though non-governmental measures.