corporation 1-3

I did a little background research on the author, Joel Bakan and sources told me that he is a Professor of Law at University of British Columbia in Canada. He used to serve as a Law Clerk, which is apparently an assistant to an experienced attorney, for a Supreme Court Judge in Canada. Reading this book, I would have guessed the author to be a professor of economics or sociology, and not of law since the chapters that I read concentrated more on the structure, function, and misbehaviours of corporations along with some laws. Economics is actually my weakest subject, and I can never understand the system of stock market or and exchange rates. It took me a long time to read these 3 chapters as there were many terms and events that I wasn’t too familiar with or had never understood such as shares, joint-stock, stockholding, capital, Bubble Act, Enron scandal etc, and I had to search them all up as they came along.  But eventually I got through. I feel that investing in a company is like gambling. If the company is prosperous, then investors gain substantial amount of money, but if it is the opposite they suffer from huge debts. There seems to be a great amount of risk, so if it were me, I wouldn’t invest in any company because I would feel more assured if I raised my own money by working. Considering the consequences of investors if companies went bankrupt, I can understand why governments used to ban corporations, and personally I think it should have stayed that way. Bakan expresses a view that since the appearance of joint-stock, governments became subordinate to corporations as joint-stock also allowed the middle class to invest in a particular company. He raises the example of railways. Since they needed huge amounts of money, they started to involve not only the upper class but also the middle class. As more people are involved, corporations need to gain money that will bring profit all, so corporations become more ambitious and disregard social responsibilities such as environmental damage, and investors also encourage this. This join-stock also brings more damage as more people are involved in it, and if the corporation falls, they all fall down as well.

The scene in the film where Tom Kline from Pfizer cheerfully talks to passer-bys near the train station was quite ridiculous to me. His actions, words, and smile all seemed fictitious, a temporary face that is discarded once camera people turn off their cameras. I think that it is great that he made the neighbourhood a much safer place. However, it seems as if Pfizer is implying that engaging in social well-being as a company exempts it from selling and spreading some of their harmful products. Chapter 2 told me that philanthropy displayed by corporations is just another image to raise the reputation of the corporation to INCREASE PROFIT. John Browne of BP seems even worse. He sends out a message to the public that he is an eccentric kind, one that believes fuel emissions of corporations contribute to the global warming, and this makes him famous, thus bringing fame to his company. I guessed before Bakan mentions half a page later that Browne supported the Kyoto protocol because it was the social responsibility that cost him the least. As Bakan mentions in the book, if Browne truly cared about the environmental damage his company brings about, he would stop his workers from digging in the Yukon village. So I guess if someone suggested electricity as a more eco-friendly alternative energy source to him, he would disagree as saving the environment from potential corporate harm is in his least interest. Borrowing Friedmann’s words, Browne is one figure “who tries to act morally which is in fact immoral”. I think it is better if the heads of corporations frankly stated that their only purpose is to raise profit. Acting as if they value social and environmental issues and discarding them once they become too costly is irresponsible; it is an act done by the worst kind.

Bakan states that corporations came to be viewed as one individual in society. A person who only pursues profit, who acts like a philanthropist but realistically isn’t, who neglects harm done to individual human beings or the environment seems like the worst kind of human being to exist. To me, it seems dangerous to grant these “individuals” equal rights as a normal flesh-and-blood human being.

I thought that the relationship between CEOs and shareholders was feudalistic. As long as the shareholders provide money for the company, the corporation has to act in the best interests of the shareholders. In a way, I felt a little sorry for the CEOs because they are restrained from doing certain things; everything that they decide to do must directly lead to profit. If the CEOs go against the shareholders, they will simply be removed from their positions and replaced by another. Can’t shareholders be less greedy? Although I don’t know much about the laws that involve corporations, I think the current laws side with the shareholders’ side too much. It is made so investors can get richer and richer, and that seems hardly fair. If there is “limited liability” for stockholders, maybe the amount of profit they earn should be limited as well.