Joel Bakan on The Corporation

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Joel Bakan revealed the modern corporation’s legal standing as a pathological lover of power and profit, changing our view of it.

Image courtesy of interviewee. February 8, 2024

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This video video reflects on the impact of the film and book "The Corporation" and its follow-up, "The New Corporation." The original work gained global popularity, being translated into multiple languages and widely used in law courses. The central premise is that corporations, legally compelled to act in their own self-interest, can be viewed as psychopathic institutions, as evidenced by their potential to prioritize profit over ethical considerations.

The author, who has a background in psychology, draws parallels between corporate behavior and psychopathy, emphasizing that while corporations may occasionally act for good, they often do so only when it aligns with their self-interest. This video video creates a limitation on their capacity for genuine positive action, leading to situations like greenwashing.

Documentary filmmaking emerged as an accidental path for the author, who adapted their academic insights into more accessible narratives. Both the original film and its sequel interrogate the institutional structures that drive corporate behavior, questioning their role in exacerbating social and environmental issues.

The sequel, which was directed and co-written by the author, addresses the apparent contradiction of corporations claiming to be socially responsible while continuing harmful practices. It argues that the perception of "good corporations" undermines democracy by reducing the need for regulation and allowing corporations to take over essential public services.

Overall, the text critiques the notion that corporations can be trusted to govern themselves or act in the public interest, warning that the charm of seemingly benevolent corporations can mask their inherent self-serving nature.

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X-TIMESTAMP-MAP:LOCAL=00:00:00.000,MPEGTS=900000

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Film obviously did really well.

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It, it played across the world.

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It was translated in 25, 26 languages.

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Um, and it had a large popular response in terms of lawyers

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and law professors in particular.

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Um, it had a very positive response as well.

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I hear from, anecdotally, I hear from colleagues,

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'cause I'm a law professor, I hear from colleagues across,

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the world, different countries, different law schools

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that they use the book

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or they use the film in their classes.

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Um, it's, some of the leading

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textbooks on corporate law refer to the book.

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Um, and so, yeah, it,

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and the reason for that is I think it was probably one

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of the first times, that there was an attempt

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to ask the question, how is it

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that the central principles of corporate law,

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and particularly the idea that corporations always have

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to pursue their own self-interest, how does

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that legal principle land in the world?

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What are its impacts?

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Uh, and that seems to be something that a lot

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of lawyers and law professors, found,

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insightful and, and helpful.

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The central premise of both the film

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and the book, is

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that when you look at the fundamental principle

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of corporate law, in the US legal system,

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the UK legal system, to some extent, European legal systems,

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the fundamental principle is

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that corporations always have

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to act in their own best interests.

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So they're legally compelled to act in self-interest.

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And so what I did is I had done psychology

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as an undergrad before going to law school,

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and I had learned about psychopaths.

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And the fundamental principle of psychopaths was

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that they always act in their own self-interest,

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that they're incapable, constitutionally incapable

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of caring about other people.

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Um, and I thought, well, that's really interesting.

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Here we've created the corporation, we've

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imbued it with personhood.

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Legally it's deemed to be a person.

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It, we've given it a personality where it always has

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to act in its own self-interest,

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which is really the personality of a psychopath.

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Um, so the central premise is the corporation is a

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psychopathic institution.

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Now, does that mean that everything corporations do,

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are bad things?

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Not necessarily,

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sometimes it will be in the self-interest of a company

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to do good things or to at

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Least appear to do good things.

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And so we see the rise of corporate social responsibility,

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CSR, ESG, environmental, social

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and government governance, social capitalism,

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green capitalism, all these ideas

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that basically say that corporations, can

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and should do good things.

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Uh, but what I argue

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to some extent in the first book in film

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and what I pick up on, in my second book in film,

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the New Corporation, which are sequels

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and which came out in 2020, is

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that there's a fundamental problem here.

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And that is that if the corporation is legally compelled

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always to act in its own self-interest, then there are going

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to be real limits to how much good corporations can do.

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Uh, and basically when it's more profitable for them

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to do bad things and to do good things,

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they will do bad things.

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And there's also the problem that they will try to appear

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to be doing good things in order

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to serve their self-interest, when in fact they're not

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so greenwashing and all that kind of deception.

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So that fundamental contradiction in C-S-R-E-S-G

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is problematic, and it's even more problematic when

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corporations start being seen as good actors

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and thereby capable of doing things

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that governments normally do, like running schools

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or water systems.

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And so there's a way in which good corporations,

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or the idea of good corporations is problematic

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for democracy because it helps pave the way for corporations

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to take over roles

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that democratic government should be doing.

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I fell into documentary filmmaking completely accidentally.

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I was in the middle of,

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a scholarly piece on the nature of corporations.

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Uh, and I met at a social event, well,

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not really a social event.

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It was a funeral actually, of a mutual, mutual friend,

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the filmmaker, mark Akbar,

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whose documentary films I was aware of.

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And I liked a great deal.

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And we started talking

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and I was telling him about this book that I was writing,

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and he said that would make, a good film

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and one thing led to another.

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Um, and we were working on the corporation.

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Um, and you know, the,

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the thing about both documentary films

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and also writing for popular audiences, which the books

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that are the basis of my films are, are that they're not

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academic books strictly, is you're making compromises.

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You are, not able, as you are in the academic world

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to just deal with, ideas in a, in a very detailed,

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analytical way to go down rabbit holes and,

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and really flesh things out.

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When you're writing in a popular vein

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or making a film, it has to be entertaining.

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Uh, it has to be engaging

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and it's has

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to be story driven rather than analysis driven.

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So the analysis can be there,

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but typically in academic writing,

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the analysis are the first thing you do.

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And then maybe you illustrate with examples

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or empirical data when you're doing filmmaking

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or writing for popular audiences, you tell a story first,

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and then from the story you draw out analytical points.

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So that required some adjustment in terms of writing,

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popular trade books.

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It required more adjustment when moving to film.

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Um, because in film you're not just dealing with print,

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it's multis, sensorial, you're dealing with music,

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you're dealing with images, you're trying

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to engage the whole viewer, not just their mind,

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but, but their emotions, their hearts, their souls,

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and you're doing it through, through music,

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through visual tropes, through all of that.

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Um, and it was initially intimidating

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because I wasn't trained in these areas,

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though I am a trained musician, and that helped.

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Um, there were just

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so many different things happening in filmmaking,

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but I came to really enjoy it.

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And in the first film, the Corporation, I wrote that,

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documentary, I didn't direct it,

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but the sequel, the New Corporation, which came out in 2020

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and is available on major platforms.

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Um, I, I directed that as, as well as writing it.

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And so I kind of learned how to be a documentary filmmaker

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by being a documentary filmmaker.

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I didn't really have any training, before,

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but I really enjoy the combination of, of

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academic writing, popular writing,

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and then filmmaking as trying to get a set

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of ideas out into the world

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in all these different dimensions

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and appealing to different kinds of audiences.

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I think the film was successful

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because it approached corporations

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and the problems that they create

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in a different way than had been done.

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And it landed in a moment when people were really worried

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about corporate power

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and about the harm that corporations were causing.

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It landed in the early two thousands, by which time

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globalization had really gained ahead of steam,

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and was sort of, rapidly, increasing the power

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of corporations

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and decreasing in relative terms, the power

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of democratic governments to, to regulate corporations.

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Corporations were now operating on a global basis.

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They were outside the sort of legal, reach

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of, of nations sort of operating in this,

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deregulated, transnational space

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of the environment was an issue.

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Human rights was an issue.

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Exploitation of workers were issues.

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All of these issues were coming to a head.

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Um, we had people in the streets

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and the anti-globalization movements

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of the early two thousands.

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So it was a moment when the question was right, namely,

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why is all this happening?

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Why are these corporations doing these things?

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Why are they being allowed to do these things?

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And rather than simply saying,

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those big bad corporations run by evil people,

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what our project did was to say,

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let's look at the institution itself and,

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and ask about that.

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So let's not just fall into the, it's just bad people

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who are sort of greedy and trying to make money,

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but let's ask about the institution.

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And so that's what the corporation did.

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Uh, it, it said, what, how is this institution put together

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that leads it to do these things?

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Uh, namely to cause problems for the environment

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and the planet and people,

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and to keep trying to amass more and more power and control

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and more freedom from regulation.

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And the answer that we

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provided is, it's right there on paper,

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namely in the law.

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The law actually says it has to do that.

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The law says that corporations must

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prioritize their own interests, meaning creating

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wealth for their shareholders.

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And they're not allowed to say, Hey,

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we wanna fix the environment,

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or We wanna be nice to our workers.

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They're actually legally prohibited from doing that.

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They always have to say what's best for our shareholders.

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And so I think that argument was, was new, especially

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for a popular audience that wasn't familiar with the sort

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of arcane corners of corporate law.

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Um, it was like, we've created

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a Frankenstein monster as a society.

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We've created this thing in a very dangerous way,

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and that was new.

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And then when you combine that with the idea of the,

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the psychopath metaphor, I think that that really

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made sense to a lot of people.

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It, you know, works have influence

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when they provide a good answer to a question

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that people have.

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And I think that's what happened

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with our film and with the book.

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It was actually at the 10th anniversary

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of this film back in 2014, where

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I had a kind of epiphany.

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I was sitting, we, we actually rented a theater downtown.

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Uh, you know, we had drinks and hor d'oeuvres

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and a big party celebrating Wow.

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10 years of, of this film.

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And it's done so well and everything.

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And, and about halfway through watching the film sitting

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there with this audience,

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it hit me like a ton of bricks.

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I I thought, wow, this film was a total failure.

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And it was a total failure

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because every issue that we looked at in the film

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has only gotten worse.

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Corporations have become bigger, they become more powerful.

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The environment is in more trouble,

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workers are more exploited.

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Human rights are more subject to corporate transgressions.

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And at the same time that all of this was getting worse,

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corporations were saying

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as they had been since about 2005, 2006,

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that they had radically changed

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that they were now good actors,

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that they were socially responsible and,

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and they were gonna save the world

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rather than ruin the world.

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I mean, this was, this was

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and is continues to be

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a very powerful narrative coming from the corporate world.

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And, and so I thought this contradiction

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between things getting worse in terms of corporate harms

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and corporations saying they've gotten better

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needs to be looked at.

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And so I started thinking about a new book and a new film.

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Um, it was released in 2020.

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It's called The New Corporation.

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Uh, the book is available in, in a number

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of languages in the United States.

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Uh, it's Penguin Random House

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and films available in all major streamers, Amazon Prime,

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apple tv, all of that.

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And basically it looks at this contradiction.

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And, I went to,

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the World Economic Forum meeting in Davos with a film crew,

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and we interview all kinds of people

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and we basically make the argument in the book and film,

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and this is the subtitle of the book,

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that good corporations are bad for democracy.

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And the reason for that is that this new sort of sense

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that corporations are

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and can be good is twinned with another idea.

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And that is, therefore since we're

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good, you should trust us.

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We can be good on our own.

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You don't need to regulate us,

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and you should hand over services that used to be public

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services like schools or like water systems.

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Uh, hand them over to us

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because we're now publicly minded, we're now good actors,

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we're now trustworthy, and we can do that.

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And I think that the problem is that for all the reasons

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noted in the first book,

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corporations are still the psychopaths they were,

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then they've simply found their charm.

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And that charm, as in human psychopaths,

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can be quite dangerous.

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So that's what I look at in,

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in the new corporation work, which as I noted,

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came out just a few years ago.

Exploring Corporate Law's Global Impact

00:00:00 - Film obviously did really well. It, it played across the world. It was translated in 25, 26 languages. and it had a large popular response in terms of lawyers and law professors in particular. it had a very positive response as well. I hear from, anecdotally, I hear from colleagues, 'cause I'm a law professor, I hear from colleagues across, the world, different countries, different law schools
00:00:33 - or they use the film in their classes. it's, some of the leading textbooks on corporate law refer to the book. and so, yeah, it, and the reason for that is I think it was probably one of the first times, that there was an attempt to ask the question, how is it that the central principles of corporate law, and particularly the idea that corporations always have
00:01:08 - that legal principle land in the world? What are its impacts? and that seems to be something that a lot of lawyers and law professors, found, insightful and, and helpful. The central premise of both the film and the book, is that when you look at the fundamental principle of corporate law, in the US legal system,
00:01:41 - the fundamental principle is that corporations always have to act in their own best interests. So they're legally compelled to act in self-interest. And so what I did is I had done psychology as an undergrad before going to law school, and I had learned about psychopaths. And the fundamental principle of psychopaths was
00:02:09 - that they're incapable, constitutionally incapable of caring about other people. and I thought, well, that's really interesting. Here we've created the corporation, we've imbued it with personhood. Legally it's deemed to be a person. It, we've given it a personality where it always has to act in its own self-interest, which is really the personality of a psychopath. so the central premise is the corporation is a
00:02:43 - Now, does that mean that everything corporations do, are bad things? Not necessarily, sometimes it will be in the self-interest of a company to do good things or to at Least appear to do good things. And so we see the rise of corporate social responsibility, CSR, ESG, environmental, social and government governance, social capitalism,

Challenges of Corporate Goodness and Democracy

00:03:15 - that basically say that corporations, can and should do good things. but what I argue to some extent in the first book in film and what I pick up on, in my second book in film, the New Corporation, which are sequels and which came out in 2020, is that there's a fundamental problem here. And that is that if the corporation is legally compelled
00:03:47 - to be real limits to how much good corporations can do. and basically when it's more profitable for them to do bad things and to do good things, they will do bad things. And there's also the problem that they will try to appear to be doing good things in order to serve their self-interest, when in fact they're not so greenwashing and all that kind of deception.
00:04:19 - is problematic, and it's even more problematic when corporations start being seen as good actors and thereby capable of doing things that governments normally do, like running schools or water systems. And so there's a way in which good corporations, or the idea of good corporations is problematic for democracy because it helps pave the way for corporations
00:04:47 - that democratic government should be doing. I fell into documentary filmmaking completely accidentally. I was in the middle of, a scholarly piece on the nature of corporations. and I met at a social event, well, not really a social event. It was a funeral actually, of a mutual, mutual friend, the filmmaker, mark Akbar, whose documentary films I was aware of. And I liked a great deal.
00:05:18 - and I was telling him about this book that I was writing, and he said that would make, a good film and one thing led to another. and we were working on the corporation. and you know, the, the thing about both documentary films and also writing for popular audiences, which the books that are the basis of my films are, are that they're not academic books strictly, is you're making compromises.
00:05:53 - to just deal with, ideas in a, in a very detailed, analytical way to go down rabbit holes and, and really flesh things out. When you're writing in a popular vein or making a film, it has to be entertaining. it has to be engaging and it's has to be story driven rather than analysis driven.

Navigating Film and Academic Writing Differences

00:06:21 - but typically in academic writing, the analysis are the first thing you do. And then maybe you illustrate with examples or empirical data when you're doing filmmaking or writing for popular audiences, you tell a story first, and then from the story you draw out analytical points. So that required some adjustment in terms of writing, popular trade books.
00:06:53 - because in film you're not just dealing with print, it's multis, sensorial, you're dealing with music, you're dealing with images, you're trying to engage the whole viewer, not just their mind, but, but their emotions, their hearts, their souls, and you're doing it through, through music, through visual tropes, through all of that. and it was initially intimidating
00:07:24 - though I am a trained musician, and that helped. there were just so many different things happening in filmmaking, but I came to really enjoy it. And in the first film, the Corporation, I wrote that, documentary, I didn't direct it, but the sequel, the New Corporation, which came out in 2020 and is available on major platforms. I, I directed that as, as well as writing it.
00:07:57 - by being a documentary filmmaker. I didn't really have any training, before, but I really enjoy the combination of, of academic writing, popular writing, and then filmmaking as trying to get a set of ideas out into the world in all these different dimensions and appealing to different kinds of audiences.
00:08:23 - because it approached corporations and the problems that they create in a different way than had been done. And it landed in a moment when people were really worried about corporate power and about the harm that corporations were causing. It landed in the early two thousands, by which time globalization had really gained ahead of steam, and was sort of, rapidly, increasing the power
00:08:56 - and decreasing in relative terms, the power of democratic governments to, to regulate corporations. Corporations were now operating on a global basis. They were outside the sort of legal, reach of, of nations sort of operating in this, deregulated, transnational space of the environment was an issue. Human rights was an issue. Exploitation of workers were issues. All of these issues were coming to a head.

Examining Corporate Institutions and Accountability

00:09:28 - and the anti-globalization movements of the early two thousands. So it was a moment when the question was right, namely, why is all this happening? Why are these corporations doing these things? Why are they being allowed to do these things? And rather than simply saying, those big bad corporations run by evil people, what our project did was to say, let's look at the institution itself and,
00:10:00 - So let's not just fall into the, it's just bad people who are sort of greedy and trying to make money, but let's ask about the institution. And so that's what the corporation did. it, it said, what, how is this institution put together that leads it to do these things? namely to cause problems for the environment and the planet and people,
00:10:33 - and more freedom from regulation. And the answer that we provided is, it's right there on paper, namely in the law. The law actually says it has to do that. The law says that corporations must prioritize their own interests, meaning creating wealth for their shareholders. And they're not allowed to say, Hey,
00:11:00 - or We wanna be nice to our workers. They're actually legally prohibited from doing that. They always have to say what's best for our shareholders. And so I think that argument was, was new, especially for a popular audience that wasn't familiar with the sort of arcane corners of corporate law. it was like, we've created a Frankenstein monster as a society. We've created this thing in a very dangerous way,
00:11:33 - And then when you combine that with the idea of the, the psychopath metaphor, I think that that really made sense to a lot of people. It, you know, works have influence when they provide a good answer to a question that people have. And I think that's what happened with our film and with the book. It was actually at the 10th anniversary of this film back in 2014, where
00:12:07 - I was sitting, we, we actually rented a theater downtown. you know, we had drinks and hor d'oeuvres and a big party celebrating Wow. 10 years of, of this film. And it's done so well and everything. And, and about halfway through watching the film sitting there with this audience, it hit me like a ton of bricks. I I thought, wow, this film was a total failure. And it was a total failure because every issue that we looked at in the film

Corporate Power and the Illusion of Goodness

00:12:40 - Corporations have become bigger, they become more powerful. The environment is in more trouble, workers are more exploited. Human rights are more subject to corporate transgressions. And at the same time that all of this was getting worse, corporations were saying as they had been since about 2005, 2006, that they had radically changed that they were now good actors, that they were socially responsible and,
00:13:13 - rather than ruin the world. I mean, this was, this was and is continues to be a very powerful narrative coming from the corporate world. And, and so I thought this contradiction between things getting worse in terms of corporate harms and corporations saying they've gotten better needs to be looked at. And so I started thinking about a new book and a new film. it was released in 2020. It's called The New Corporation.
00:13:46 - of languages in the United States. it's Penguin Random House and films available in all major streamers, Amazon Prime, apple tv, all of that. And basically it looks at this contradiction. And, I went to, the World Economic Forum meeting in Davos with a film crew, and we interview all kinds of people and we basically make the argument in the book and film, and this is the subtitle of the book, that good corporations are bad for democracy.
00:14:20 - that corporations are and can be good is twinned with another idea. And that is, therefore since we're good, you should trust us. We can be good on our own. You don't need to regulate us, and you should hand over services that used to be public services like schools or like water systems. hand them over to us because we're now publicly minded, we're now good actors,
00:15:13 - And I think that the problem is that for all the reasons noted in the first book, corporations are still the psychopaths they were, then they've simply found their charm. And that charm, as in human psychopaths, can be quite dangerous. So that's what I look at in, in the new corporation work, which as I noted, came out just a few years ago.

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