Notes on Chapter Three of The Corporation by Joel Bakan: The Externalizing Machine
By Richard Eriksson on May 16, 2004 - 2:53pm
Bakan continues the theme of the corporation as having a psychopathic character and discusses how corporations prefer to externalize costs, making unconnected third-parties pay for (or benefit from) the corporations transactions. The most obvious externality is the negative effect corporations have on the environment, but Bakan focusses instead on specific examples on non-environmental externalities, such the logic of General Motors pricing in lawsuits for motor vehicle accidents rather than making them safer, since it costs less per-vehicle-produced to pay legal penalties and fees than it does to, say, ensure that gas tanks do not explode in an impact. Other externalities include the driving down of labour costs in third-world companies and effectively making prisoners out of the workers.
Ray Anderson makes another appearance, this time to acknowledge that corporations have external costs on people, and—in a repeat of the most remarkable part of the movie—tells the story of how he came about his company's environmental vision when he was to give on the subject.
The difficulty, Anderson quickly realized, was that "I didn't have an environmental vision. ... I began to sweat," he recalls. "Oh my, what to say?" Desperate for material and inspiration, he began to read a book about ecology. There he came across the phrase "the death of birth," a description of species extinction. "It was a point of a spear into my chest," he now recalls," and I read on, and the spear went deeper, and it became an epiphnal experience, a total change of mind-set for myself and a change of paradigm." "We're all sinners, we're all sinnerrs," says Anderson today of his position as a corporate chief. "Someday people like me will end up in jail." But he now rejects as dangerously miguided the beliefs he once shared with the large majority of business leader—"that nature is unlimited, the earth...a limiltless source for raw material, a limitless sink into which we can send our poisins and waste"; "that the relevant timeframe is my lifetime, maybe my working life, but certainly not more than my lifetime"; and the market's invisible hand will take care of everything. The market alone cannot provide sufficient constraints on corporations' penchant to cause harm, Anderson now believes, because it is "blind to ... externalities, those costs that can be externalized and foisted off on somebody else."
In the footnote for that lengthy quote (I always read footnotes), Bakan mentions that the book Anderson read The Ecology of Commerce: A Declaration of Sustainability by Paul Hawkens. Three other corporations' misdeeds are listed: Kathy Lee Gifford's clothing line use (and misuse) of third-world labour, General Electric (with a laundry list of its environmental and other legal violations), and BP, which failed (and evidently still fails) to properly maintain its oil fields, causing explosions which harm its workers and the environment.
