The Corporation: Institutions, Individuals, Ethics

The following review was posted earlier today on cinekklesia. To see a reader's comment (and my response), check out the original entry.

For a non-economist, I sure have a strong interest in economics. I even like watching documentaries about topics in the field. One that I highly recommend is Stopwatch: Frederick Winslow Taylor and the "Taylorization of America", which is about a turn-of-the-century efficiency expert who ended up affecting our everyday lives more than we know. Another excellent production is Thus Galbraith: The Life and Times of John Kenneth Galbraith, regarding the iconoclastic, left-wing economist (interestingly, this documentary was narrated very graciously by William F. Buckley, Jr., an icon of 20th Century American conservatism).

Now comes Jennifer Abbott and Mark Achbar's The Corporation (2003), a left-wing critique of what (by their telling) is the most dominant, pervasive institution of modern times. Those who know me and my libertarian views may wonder why I enjoy watching left-wing documentaries. Simply put, any well-crafted documentary about any interesting topic deserves recognition — even if I happen to disagree with some of its fundamental premises. (In fact, only by having our most deeply held views challenged do we grow intellectually and even spiritually.)

Regardless of one's political/ideological preferences, a viewer can learn a lot from The Corporation. For example, did you know that corporations exist in a nebulous linguistic space? They only officially "are" when the state grants them a license to do business. Theoretically, the state has the power to revoke the license of even the biggest players; doing so would cause such giants as Microsoft, GE, and Boeing to cease, well, existing. (Practically, this almost never happens.)

You already knew that? Okay, how about the fact that one of the biggest revolutions in jurisprudence occurred when US courts started to recognize corporations as "people." Corporations aren't just buildings and contracts and marketing departments; they legally share the same plane as individual human beings — this explains why they can buy, sell, and be treated as plaintiffs and defendants in court.

The Corporation's most interesting aspects center on its dissection of its subject. While many Americans accept the corporation as a given, its genesis and continued existence actually have a slightly artificial feel. In other words, corporations exist because we, as a society, allow them to exist; they do not arise ex nihilo.

Another interesting aspect of this documentary is its use of psychiatric metaphors. Since a corporation is legally a "person," Abbot and Achbar reason, then one should be able to diagnose it like any other individual. In addition, since the raison d'etre of most corporations is profit (a true statement: any ideologue—socialist, libertarian, or otherwise—should be able to acknowledge that), then our "corporate citizen" most likely would be diagnosed a psychopath, due to its narcissistic pursuit of self-interest without any regard for others' welfare. To bolster their diagnosis, Abbot and Achbar list a litany of corporate wrongdoing, which, if committed by an individual, would land that person in a prison or a psychiatric institution.

The Corporation's analysis starts to get fuzzy when it looks at the question of blame. While corporations are legally "people," we presume that they are not ontologically so. In other words, while I can sue Microsoft, I know that there is no Mr. Microsoft with whom I can relate on an interpersonal level. While I can have dinner with Microsoft's most famous representative, Bill Gates (on his dime, of course), I cannot do the same with a "Ms. Microsoft" (or her many offspring: Windows, Encarta, etc.). Such "people" do not exist.

This lends weight to the idea of corporations as amoral institutions. (If a corporation has any moral code, it boils down to this: make as much profit as possible for the shareholders by increasing revenue and lowering cost.) When we say that a corporation has no heart and soul, we don't just mean that metaphorically; it is literally true. How can one place moral blame on any entity that holds legal personhood and yet has no soul?

Abbot and Achbar fumble at this point because they get caught up in this ambiguous question without successfully resolving it. Some of the intellectuals and activists they interview note that executives who work for corporations may be very nice people themselves, people with whom we would want to interact on a personal level, but the structure of the corporation strips away those individual niceties; the soulless beast takes charge, turning even CEO's into mere cogs. (One of the most provocative moments in the film comes when a former CEO notes that the general public has a misperception about the power of corporate executives; more often than not, they are actually beholden to forces beyond their control — namely competitors and shareholders.)

So, if the corporation is not a "real" person and if its employees have no substantial agency, then is nobody to blame when something goes awry? The problem with such a view is that it ignores the moral responsibility of each individual employee. A corporation may not be a real person, but it is made up of people who can and do make choices. If a CEO believes that a particular course of action is morally correct but contradictory to shareholder interest, then he/she must decide between the morally correct choice and financial security (i.e., his/her job). Remember: corporations would not exist if we, as a society, did not allow them to exist, and corporate malfeasance would not exist if individual employees did not facilitate such behavior.

I am not saying that such choices are easy or that anyone can lay claim to a moral high ground. I hypothesize that most of the people reading this review have witnessed some morally questionable behavior in their schools or workplaces but have decided that it is not worth resigning in protest. Perhaps we think that the offense is relatively minor and not worth our jobs. Perhaps we tell ourselves that "we have to choose our battles" and that this particular battle is not worth waging.

In any case, once we become conscious of a morally problematic situation or structure, we then have to make a choice. While The Corporation's analysis may be overly simplistic (e.g., in its demonization of corporations, it downplays [1] the value of competition and consumer choice in restraining immoral behavior and [2] the negative effects of state actions, many of which cause even more harm than corporate malfeasance), the movie does raise the important issue of consciousness. We have a responsibility to be aware of the world around us, to avoid isolating ourselves in echo chambers that merely reinforce our pre-conceptions. While I would encourage Abbot and Achbar to take a more favorable view of the free market (could their critiques result from their own self-imposed echo chamber?), I applaud them for having made a fascinating and provocative film.