Introduction
“We have created a great money making machine and it is now out of control” (Bakan, 2005). Bakan was referring to corporations when he said this in his book. Corporations have had adverse effects on our environment and various other sectors of the social life. Bakan talks of the history of the complications and problems that develop from excess corporate power, defines some of its consequences, and suggests ways of bringing corporations back in line with decency.
The corporation is a film by Joel Bakan which expresses corporations in a negative light. The corporation sheds light on the development of a corporation from legal entities carry out specific public functions to commercial institutions entitled to other people’s legal rights. The film has criticized various corporation practices. The film compares psychopathy and the behavior of corporations. Corporations tend to disregard people’s feelings and safety, lie in order to make profits, unable to maintain relationships, fail to respect to the law and social norms and have incapacity to experience guilt.
The arguments put forward in the documentary
Hilary sheds light on the ills corporations commit as they strive to make their profits. Capitalist growth is broadly shown as the lone answer to the predicament still sweeping the global economy. Yet the age of corporate globalization is distinguished by unprecedented levels of environmental degradation and inequality (Hilary, 2013).
Bakan accuses corporations of being psychopathic. Psychopathic in that they are only interested in themselves. Corporations are only interested in generating profits from their customers (Bakan, 2005 p.56-69). Bakan says that corporations have a ‘built-in compulsion’ to reduce costs, and any care for human safety or the environment quickly disintegrates when big companies are confronted with the end result profits. Hilary claims that “in country after country, government elites redesigned social and economic systems in order to create new market opportunities for capitalat the international level, a new generation of trade agreements negotiated in multilateral, regional and bilateral forums secured the foundations of a globalization that prioritized the interests of transnational corporations over the needs of labor, society [and] the environment” (Hilary, 2013). Bakan gives an example with general motors company. The company assessed the safest place to place the gas tanks in order to minimize fire in case of a crash. It then compared the price of upgrading the design with the price of price of paying off families in case of a fire. It found the cost of paying off families was cheaper and thus ignored the improvement of the design. The case above shows disregard for human life.
Hilary asserts that the age of corporate globalization has led to the polarization of the poor and the rich. The gap between the rich and the poor has widened greatly making the society more unequal. One percent of the world’s richest increased to 46% in 2012 while the poor own less than 1%. Corporate globalization has led to what we may term as the rich getting richer and the poor getting poorer. Hilary argues that the drive for growth of capitalism cannot be sustained since it leads to depletion of natural resources and destroys communities.
Corporations lack moral decency. Bakan gives the example of General Electric which has had over 40 major legal environmental breaches in the past decade. General electric does not follow environmental laws and pays fines while financing clean ups when caught on the wrong side of the law. Through its lack of moral decency, the company endangers the lives of others and pollutes the environment. Bakan emphasizes that for companies like General Electric and General Motors “compliance with the law is a matter of cost and benefits” (Bakan, 2005 p.79). It is often more lucrative for stakeholders if corporations defile water bodies, risk human life, take part in fraud, and pay penalties and make settlements if they are caught, than it is to conform to the law.
Corporations the influence they have on the government for their own good e.g. to remove restrictions. Corporations now fuel political campaigns and influence the governments through their donations (Bakan, 2005). It is difficult to reign in the midst of corporations as expressed by Roosevelt. There has been an attempt to overthrow Roosevelt in order to change a new business deal by some businessmen in the past. Bakan reminds us that “democracy is government by the people for the people, not by corporations and for corporations” (Bakan, 2005 p. 90-99). Using the influence they have over the government, corporations have managed to go around the restrictions placed on them. Mines and slaughterhouse have managed to function with minimal restrictions. U.S has been bought by large companies, which are supported by “all the power and assets of the state, while voters only have the nongovernmental organizations and the market’s obscure hand. Socialism for the rich and capitalism for the poor” (Bakan, 2005 p.151).
Bakan paints a disturbing picture of the extensive negative effects of company power which include destruction of the environment. His opinion on capitalist nations is that they are run by short-sighted corporations performing in the monetary benefits of the few. Bakan offers direct solutions. The consumers have governments that are accountable to the people and not to corporations. In the present rule of corporate power, codes of practice have been assigned a bad name, but codes of practice or regulations “are intended to force corporations to pay for expenses they would else externalize onto the environment and society” (Bakan, 2005 p.150) Regulations need to be enforced and reinstated.
Right-wing defense of corporate globalization
Economics professor, Jagdish Bagwhati creates all the accurate economic arguments, but without the fuss of statistical links often used to develop the case. He talks of how corporate globalization has provided an improved standard of living in developing countries, and how research with protective "import substitution" strategies have failed. Jagdish Bhagwati's book offers a good chance to influence those readers not blinded by anti-market dogma.
Wolf, a right wing defender of corporate globalization says that the things that push the world towards corporate globalization include; technological advances that have lessened communication barriers and made transportation over long distances possible and cheaper (Wolf, 2004). Wolf's belief is that "The problem today is not an excess of globalization but rather too little of it" (Wolf, 2004). Wolf notes that it is the poor countries that suffer from protectionism and the burden of attempting to achieve self-sufficiency. Corporate globalization will be of much help to the poor countries. The importance of legal protection and good governance in corporate globalization cannot be ignored as can be learnt from a country such as Nigeria. The country is rich in oil supplies yet the wealth generated is continually looted by its rulers (Hilary, 2013). Wolf also sees corporate globalization as a leeway for democratization in many countries (Wolf, 2004). Bhagwati emphasizes that corporate globalization should be developed at optimal speed and not maximum speed. In defense of rightwing defense of corporate globalization, he says that governments should adopt policies that enable efficient functioning of corporate globalization since corporate globalization will reduce poverty (Allin, 2010).
The supporters of corporate globalization claim that the advantages of corporate globalization evidently overshadow the costs (Dignam & Galanis, 2009). Bhagwati maintains that the issue is not corporate globalization, but the lack of implementation of policies that are in conjunction with globalization that are to be blamed if things go bad. He claims that domestic policies which can be altered are the cause of the problem (Bhagwati, 2004). Reasonableness can order improved policies, and the NGO’s can pressure the governments to introduce the required safeguards to avert the effects of liberation of trade from affecting the individuals and the economy too harshly. It is unfortunate that not all governments are as open to reason and the appropriate safeguards and policies are not always agreed upon by professionals. Bhagwati opinion is that free trade is "an often powerful weapon in the policies we can deploy to fight poverty." Corporate globalization will improve living standards, and could enable produce incredible gains a chance that a protectionist economy or an economy that struggles for self-sufficiency can't offer (Bhagwati, 2004). However, too often, Bhagwati relies on the solution of corporate globalization functioning effectively as the implementation of policies yet these policies are difficult to implement.
Comparison of both defenses
Bhagwati admits the flaws of corporate globalization. Environmental hazards increase, exploitation of workers and disruption of the economy by free capital flows. However, Wolf and Bhagwati don't take corporate globalization past morality to viability. Corporate globalization is a good thing and its benefits do indeed overpower those of the left wing defense. Corporate globalization will bring much needed development in less developed countries. However, supporters of the right wing defense fail to make a clear argument. The left wing defense on the other hand has a clear basis for opposing corporations. The left wing defense can clearly convince someone of the evils of corporations especially because in the long term everyone is affected by them. Joel Bakan in his documentary the corporation addresses the ills of corporations in a straight forward manner.
The issue of environmental degradation is a major setback for corporations (Dignam & Galanis, 2009). I would, however, term this as a self-instilled set back since the corporations have the ability to avoid harming the environment yet they put their interests above preservation of the environment. Environmental degradation is a major issue facing the world today and has led to a lot of negative changes in the environment, global warming, being one of them. Regardless of this, pollution of the environment by the environment can be controlled through implementation of appropriate policies. The right wing defense raises the issue of importance of corporate globalization in less developed countries. Corporate globalization in less developed countries will be of great assistance as this countries lack the capacity to be self-sufficient. The left wing defense makes a more persuasive argument yet in my opinion, corporate globalization is of great importance in our society.
Conclusion
Corporations are a necessary ill in our society. Nevertheless, the negative part of corporations can be dealt with through good governance and establishment of the required policies. Corporate globalization may have its negative effects but with good strategies they can be dealt with. I, therefore, advocate for corporate globalization under good policies as it will be of great benefit. The world is constantly changing and corporate globalization is one of those changes that are almost inevitable. If it doesn’t happen now it will happen later.
References
Allin, D. (2010). Balancing Act. Basingstoke: Taylor and Francis Publishers.
Bakan, J. (2005). The Corporation. New York: Robinson Publishing.
Bhagwati, J. (2004). In defense of Globalization. Retrieved from <http://www.complete-
review.com/reviews/economic/bhagwj.htm>
Dignam, A. J. & Galanis, M. (2009). The globalization of corporate governance. London:
Ashgate.
Hilary, J. (2013). The poverty of capitalism: economic meltdown and the struggle for what comes
next. London: Pluto Press.
Wolf, M. (2004). Why Globalization Works. Retrieved from <http://www.complete-
review.com/reviews/economic/wolfm.htm>
