The (not so) new corporation

Review of: The New Corporation: The Unfortunately Necessary Sequel (2020, documentary), directed by Jennifer Abbott and Joel Bakan, Grant Street Productions.

The New Corporation (2020), directed by Jennifer Abbott and Joel Bakan, is the ‘unfortunately necessary sequel’, as the subtitle puts it, to the acclaimed documentary The Corporation (2003). Both are based on books by Bakan (2004, 2020) that carry the same titles. The Corporation presented a powerful narrative about the origins of the corporation as a distinct legal entity, and showed how it had come to exert enormous influence over us. Rather than contesting the definition of a corporation as a legal ‘person’, the film took full advantage of this anthropomorphization to ask the question: ‘If the corporation is indeed some kind of human individual, then what kind of person are we talking about?’ Their diagnosis, drawing on the APA’s Diagnostic and Statistical Manual of Mental Disorders (DSM), is that the corporation is the institutional equivalent of a psychopath (on account of, amongst other factors, its ‘reckless disregard for the safety of others’ and its ‘incapacity to experience guilt’).

Like many others, over the years we both have used The Corporation when teaching courses on Corporate Social Responsibility (CSR), business ethics and sustainability. Despite being US-centric in its selection of speakers and examples, the film has proven to be a highly successful pedagogical tool for teachers in other geographical areas as well. Its positioning of the corporation within a historical context reminds students that the corporation as a legal entity, and the notion of limited liability that comes with it, has not always been with us. It further provides a powerful, and much-needed, counterbalance to mainstream CSR perspectives that seek to cure capitalism from within. In particular, the portrayal of the corporate legal entity as being intrinsically psychopathic poses a direct challenge to the idea that capitalism can be cured simply by a change of corporate mindset (e.g. by a shift from a shareholder to a stakeholder perspective, or from a single bottom line to a triple bottom line).

Another strength of the 2003 documentary is the diversity of original interviews on which it is based. The film includes interviews with high-profile business people, such as the former CEO of Shell, Sir Mark Moody-Stuart, celebrated journalists, including Naomi Klein, the environmental activist Vandana Shiva, business guru Peter Drucker and influential theorists, such as the economist Milton Friedman and the philosopher Noam Chomsky. There is never any doubt as to where the documentary makers stand in relation to the corporation, but different perspectives, even when they are ruthlessly mocked by the voice-over provided by the documentary makers, do receive space.

For instance, the original film included a memorable scene in which protesters arrived at the house of Shell CEO Mark Moody-Stuart to hang a sign on the roof reading ‘Murderers’. While the situation initially seemed likely to become confrontational, once Moody-Stuart and his wife began talking to the protestors what emerged was a friendly dialog in the family’s garden, with coffee served along with an apology for not being able to offer soya milk to those who preferred it. In the post-coffee interview, Moody-Stuart explains that they managed to find common ground: ‘All the things they were worried about, I was worried about as well . . . The big difference between us was that I feel I can actually make a contribution, [whereas] these people are frustrated because they felt they have nothing to do’. Needless to say, the protestors have a different point of view, one more aligned with the documentary makers, namely that those who seek to change the system from within become part of the system themselves. Nevertheless, these different perspectives invite students to ask, ‘But doesn’t Moody-Stuart have a point when he says that . . .?’ From a teaching perspective, the film thus manages to bring in a much-needed critique of corporations without the teachers having to take on the role of partisan agitators against corporations. At the same time, the material on screen provides students with resources that prompt and enable them to reflect on the role of corporations in society for themselves.

At 1 hour, 45 minutes long, The New Corporation is significantly shorter than its predecessor. The format nevertheless remains much the same, in that it features a similarly dense interweaving of interviews (some with the same people as in the film’s predecessor, such as Chomsky and Shiva), historical material and contemporary footage of corporate events and interactions. In a somewhat contrived manner, it seeks to continue the narrative of the first film by pointing out a new item added to the APA’s psychopath checklist in the latest version of the DSM, namely ‘the use of seduction, charm, glibness or ingratiation to achieve one’s ends’. The thesis is, essentially, that corporations are spinning a new story about themselves: one of social responsibility and being part of the solution to social and environmental problems. In doing so, the ‘new’ corporation claims to have broken decisively with the ‘old’ (irresponsible) corporation exemplified by businesses such as Enron and Monsanto. But the credo of the new corporation – ‘doing well by doing good’ – is in reality nothing more than a tool to support lobbying for deregulation, tax cuts and privatization. The adoption of this façade, the narrative continues, has led to a disturbing situation in which corporations have started to govern us in all spheres of life, with many people now putting more faith in corporations than in democratically elected institutions (see also Rhodes and Fleming, 2020).

The first half of the film is well-structured and comes close to the quality of its predecessor. The documentary presents an assumed ‘playbook’ for corporations that features ten themes (e.g. ‘avoid taxes’, ‘manipulate people’ and ‘take control through deregulation’). Each theme is then followed up with examples, images, media headlines and interviews. For instance, focussing on JP Morgan Chase’s claim to have rescued Detroit, the film makes a powerful argument that this company had been one of those that bankrupted Detroit in the first place. It serves as an example of corporations that have hollowed out the state by tax avoidance and lobbying for deregulation, only to then claim the role of saviour when the government does not have the financial and regulatory means to provide housing, infrastructure and education. This well-argued point is illustrated with captivating footage of political lobbying in action at the World Economic Forum in Davos.

The second part of the documentary, which begins an hour into the film, is less structured. Under broad headings such as ‘Planet in Crisis’ and ‘Democracy in Crisis’, it presents brief depictions of various ‘crises’, from environmental catastrophes, the Covid-19 pandemic, the lack of labour protections, to the rising popularity of right-wing ideologies. As a potential remedy, the film then highlights activities of a range of grassroots movements, from the ‘occupy’ movements and the fight for an improved minimum wage in the US, to demonstrations against housing evictions in Spain, the activism of Greta Thunberg, and the (successful) battle of protesters against a big coal mining project in Australia. As a final point, the film makers include footage of the Black Lives Matters protests which erupted after the killing of George Floyd. However, the overall narrative is quickly lost in this wide-ranging engagement with broader social issues. What remains, despite the somewhat loose connections between all these crises, is the notion of a struggle of ‘the people’ against ‘the corporation’, ending on a hopeful note that the people might be able to gain political influence to ward off the greatest corporate dangers.

While greenwashing and other forms of deception are without question a contemporary trend, there are two obvious objections to the claim that this trend separates the ‘old’ from the ‘new’ corporation. The first is the rather unconvincing dating. Indeed, the original documentary already complained vociferously about the deception of companies in 2003, and Milton Friedman had much earlier remarked on the ‘hypocritical window dressing’ of companies in his (in)famous 1970 article in the New York Times (his point, of course, being that corporations ought to pursue profit without feeling the need to dress it up as ‘social responsibility’). Bakan’s (2004) book accompanying the first documentary even looks as far back as the early 20th century, when a company like AT&T might attempt to create a humane image for itself in order to ‘overcome people’s suspicions of it as a soulless and inhuman entity’ (p. 17). Even the claims that CSR has become a way of governing society and that corporations have made ‘good deeds’ part of their core business, both of which are central to the new film and its accompanying book, can be found in the first documentary and the first book. Rather than a new departure, then, it might have been better to speak of current trends as an intensification of developments already identified in the first documentary.

The second objection is that it is a little too easy to simply dismiss everything that has happened under the label of sustainable and ‘good’ business as seductive talk aimed at masking the ruthless maximization of profit. One might convincingly argue that what is now taking place under the heading of social responsibility is a case of ‘too little, too late’, but a little more engagement with the arguments advanced in the name of CSR would have been appropriate here. In The Corporation, at least one business executive survived the film in relatively good shape: Interface CEO (and company founder) Ray Andersson, who, after an epiphanic reading experience, had decided to try to make his carpet manufacturing company more sustainable. He has been celebrated as a good example of responsible leadership ever since. There is no such complicating example in The New Corporation, perhaps because it would taint the overall thesis that any talk about CSR is really no more than a farce at best.

The New Corporation is unleavened with any potentially muddy middle ground between the evil corporation and ‘the people’ who resist its pernicious influence by reclaiming their democratic power from the grasp of corporate oppression. By closing down the voices of the opposition, the audience is left with few tools that might allow them to come to agree with the film’s central premises in a critical way and under their own steam. From the perspective of teaching CSR and related courses, this is a missed opportunity: Business students are looking for a dialog about many of the issues that are addressed in the film, but the film offers something that is rather closer to a sermon. Like its predecessor, The New Corporation seeks to convert the viewer to a certain viewpoint but, unlike the first film, it attempts to do so without challenging viewers to think for themselves by allowing for complex and ambiguous scenes or examples. This is a shame, because positive change does require meetings between different perspectives, perhaps of the type exemplified by the ad-hoc coffee gathering in Moody-Stuart’s garden.

On a final, more positive note, we should also mention that the accompanying book (Bakan, 2020) provides a much more solid motivation for some of the claims that are made in the film. Important points that are merely asserted on screen, for instance, the claim that shareholder capitalism is still very much alive, are presented in a more substantial and well-motivated form in the book. Overall, the book does a great deal of work that the documentary stops short of, either by accident or design. When using the documentary in teaching, then, we would recommend making the book part of the readings.