Noam Chomsky and Joel Bakan on the Psychopathic Propaganda Machines We Call Corporations
The following is an excerpt from the new book I'm Right and You're an Idiot by James Hoggan (New Society Publishers, 2016).
Propaganda is a polluting and polarizing behavior that is arguably as vast and destructive as any other cultural or social forces. What’s more, in the case of modern corporations, deregulation has legitimized the use of unbridled propaganda and created a regulatory, legal and financial system that virtually demands it.
In his book The Corporation: The Pathological Pursuit of Profit and Power, author, filmmaker and law professor Joel Bakan traced the corporation’s rise to dominance, right back to its origins centuries ago. Bakan illuminated how these juggernauts are required by law to elevate their own interests above those of others and pursue their goals with rampant self-interest, sometimes without regard for moral limits.
After seeing the film Balkan made from his book, I was keen to speak with him. I was interested in his views on the role some corporations play in corrupting public discourse, something I had occasionally seen up close during my career in PR. I asked Bakan what inspired him to write The Corporation, and he explained the project was driven by a passion to inform people about an institution that increasingly governs their lives and poisons public discourse.
The law professor sees the contemporary corporation as a “very strange, potentially dangerous and destructive institution.” Back in the late 1990s he started to observe the power of corporations as they exploded into public awareness, spearheading the development of globalization, deregulation and privatization. Governments began to abdicate much of their regulatory oversight and free corporations from legal constraints. As a result, corporations emerged as self-governing institutions with the single goal of serving their own interests and those of their shareholders.
Bakan’s work does not seek to vilify or analyze the people who run corporations or work for them. He critiques the institutional nature of the corporation as legally created, saying it is an invention that has been imbued with characteristics that, if observed in a human being, would swiftly be diagnosed as psychopathic.
This view initially seemed a little extreme to me, as I built my business around representing successful corporations and never saw anything remotely like this in the companies I worked with. But then Bakan outlined the characteristics of a psychopath: including callous unconcern for the feelings of others; incapacity to maintain enduring relationships; reckless disregard for the safety of others; deceitfulness, repeated lying and cheating people for profit; incapacity to experience guilt; failure to conform to social norms with respect to lawful behavior. Looking at this list in relation to the excesses on Wall Street, the guiles and machinations of big banks, the environmental record of oil and gas companies, the misinformation campaigns surrounding climate change and the lies and lack of guilt in the tobacco industry, I began to see Bakan’s point.
“Not only have we created an institution in the image of a psychopathic human being, but we’ve actually conferred personhood on it . . . and as a society we’ve given it immense power to govern every aspect of our lives,” Bakan said. Increasingly, corporations have limited legal obligation to be concerned about the environment but are compelled to do what’s best for their shareholders, whether that means investing to ensure a favorable scientific environment, favorable public opinion environment or favorable political environment so that they can lower production costs and increase profits.
That’s not a conspiracy, Bakan stressed. “That’s just the logical dynamic of a particular institution.”
Corporations do an excellent job of churning out masses of marketing materials that suggest they are doing the right things, but when you look at the actual record, they are not being responsible to social interest, nor can they be expected to be. “How can you expect a psychopath to be self-regulating? The concept doesn’t make any sense,” said Bakan, who calls corporate social responsibility an oxymoron.
I found Bakan’s analysis more believable than the evil CEO explanation or any conspiracy theory. The current system makes it incredibly difficult for a corporation to behave any differently. These companies run on shares, return of stock options, and their whole structure demands they do nothing to jeopardize profits. It’s an oversimplification to turn this fact into a good guy, bad guy narrative because corporations are required by law to act this way.
Bakan noted that some of his best friends work in corporations, and many excellent employees are genuinely committed to social values such as the environment. They want to see their companies doing good things in the world, not causing harm. But when they walk into their offices they are “metaphorically and practically” bound by the institutional demands of their corporations, and that means “social responsibility to stakeholders can only be strategic.” Their critical path must be to serve shareholder profits—that’s been the unique nature of the institution and its legal obligations since corporations were first formed.
Corporations were first conceived in the late 19th century as immensely powerful tools to attract large sums of capital; they created massive projects such as railroads and more recently airlines and the Internet. They were mighty, effective investment capital vehicles, and they were constrained so they would not cause more harm than good. Beginning in the 1930s “there began to develop a robust regulatory system and regulatory state,” Bakan observed, but in the 1980s we began to see a dismantling of regulation, which continues today.
“Now the notion is, Let’s let the powerful vehicle do its own thing and hope it constrains itself...Somehow everything will trickle down and play out, and the market will take care of it so everything will be fine. Well, everything isn’t fine,” said Bakan.
Today’s corporation, as an institution, lacks any intrinsic or internal ability to constrain itself morally or ethically, and Bakan sees this as very dangerous: “If you put blinders on a donkey, that donkey is going to do a much better job of going straight down the street and pulling the cart. But it will not see what’s happening at the sides, and it won’t have any responsibility for that.”
Over the past 30 years or so,“there has basically been a deal, and the deal is that government would become less involved in demanding that corporations be socially responsible, providing corporations would take on the task of regulating themselves and becoming more socially responsible.” It used to be that public laws demanded that corporations toe the line, but now we rely on the private choices of individual companies. Many corporations talk the talk of social and environmental responsibility, but Bakan sees a huge gap between words and action, and said the deal has not been a good one for the people, for the environment or for stakeholders.
Chief Justice Leo E. Strine Jr. of the state of Delaware has written that corporate sustainability misunderstands Delaware law and that it “is not only hollow but also injurious to social welfare to declare that directors can and should do the right thing by promoting interests other than stockholder interests.”
Corporations are invested in creating a scientific domain that is favorable to them and hostile to those who criticize them. For instance, a pharmaceutical company is legally bound to act in ways that serve its shareholders, and it will naturally seek to shape public perception about science,“to control science for its own ends.”
Bakan observed that public relations machines have worked hard to repress the true nature of corporations and convey the notion they “are just like you and me...warm and fuzzy, like a good neighbor. They are [the] Michelin Man and Ronald McDonald.” Massive amounts of money have been poured into efforts to paint a caring human public face on corporations, to present them as benevolent servants of humanity. “The extent to which this has been successful has been a disaster for democracy and for various values like the environment,” Bakan said flatly. A good example of how companies edit information to promote their point of view was an Enbridge Northern Gateway Pipeline’s campaign that showed a map that erased about 1,000 square kilometers of islands from the Douglas Channel, in an attempt to make the company’s proposed oil tanker route look less treacherous. This campaign also included the slogan, “It’s a path to world class safety standards and low environmental impact.” In another Enbridge ad, accompanying an emerald-green underwater scene, was a poem that included the lines: “A limitless pool of life/A playground for the tiny and giant things that live within it/And a gateway to the other side.” Bakan commented, while corporate social responsibility in some instances does some good, it is most often merely a token gesture that serves to mask the corporation’s true purpose.
Bakan stressed that because the corporation as an institution lacks any moral or ethical constraints, it is necessary to impose constraints externally through regulation “and find a balance between what it can do well and the harm it will inevitably cause if not constrained.”
I asked Bakan why the public has failed to demand more regulation. “That’s the $64,000 question,” he said, and it has to do with the manufacture of ideology, with the manufacture of public opinion, with the role that for-profit, advertising-driven media plays in forming public opinion, the lack of critical-thinking training in our education system—and all the various ways in which knowledge is constructed in our society. “We citizens have been asleep at the switch.”
Public awareness is seen as a danger by governments and ruling elites, said linguist and cognitive scientist Noam Chomsky, one of this continent’s leading political commentators and a professor emeritus at MIT. That’s because it can interfere with the primary concern of business, which is the enrichment of the very rich in the short term. Chomsky explained that an oil company executive, for instance, may be personally concerned about greenhouse gases or habitat loss, but in their institutional world they cannot express that worry or step out of their corporate role. “These are very deep problems; they are institutional, not individual.”
Chomsky wasted no time telling me exactly what he believes is at the root of the problem: “The government is not our government. It is not a government of the people. It’s a government of the overwhelmingly rich, of the corporations and the wealthy. . . . And so it does what they want.” He explained that big business is interested in short-term gain and cares little about what are called, in the economics literature, externalities (consequences that are not part of market transactions). In other words large corporations are self-interested and unconcerned with making a deal that’s good for everyone. For example, a company that manufactures or sells cars is not worried about pollution, traffic congestion, accidents and injuries, said Chomsky.
He noted the financial crisis of 2008 is a prime example of people ignoring externalities. “This [economic collapse] is what happened when Goldman Sachs, JP Morgan Chase, Barclays Bank and the rest of them made fraudulent or semi-fraudulent [transactions] in the housing market to try to maximize short term gain.”
An effect of this is what’s called systemic risk, meaning the danger that one company getting into trouble can spread and destroy the whole system. In the financial world, systemic risk is not lethal because the public can bail a company out. “So AIG didn’t go bust as it should have, and Goldman Sachs didn’t collapse as it should have,” Chomsky observed. In the case of Earth’s natural environment, however, the risk of destruction is high but an executive with Exxon Mobil or an official at the Chamber of Commerce is focused on short-term gains so externalities are ignored. “And there’s nobody to bail you out.”
“Market systems are designed to create lethal catastrophes,” Chomsky warned. These market systems and structures can be overcome with regulation, government control and popular pressure, in theory, but all of these require a political democracy, and one of the effects of a high concentration of capital inequality is that democracy is weakened.
Chomsky pointed out that the American public favors higher expenditures and efforts to deal with climate change, but that doesn’t matter. “What matters is what the rich and powerful think.” And they are quite transparent in their opposition to such expenditures.
“The American Chamber of Commerce, the business lobby, the petroleum lobbies have openly proclaimed they are carrying out efforts to undermine popular beliefs in anthropogenic climate change.” He referred to the organization called ALEC—American Legislative Exchange Council—that creates legislative programs for states in the US and recently rolled out a school program they call balanced teaching. The name may sound nice, but it means in practice that if a Grade 6 class is given “information” about climate change, that information has to be balanced by “information” about climate denial, which comes out of Exxon Mobil. “It’s like a totalitarian state,” said Chomsky, “It’s a way of ensuring that the public is as stupid and ignorant as possible, and it makes perfect sense from the business lobby point of view.”
I described the Canadian oil industry’s appeal to Americans to buy Canadian oil because it’s more ethical. I explained how this campaign surprised me because it is the message we are used to hearing from the American Petroleum Institute or the US Chamber of Commerce, not something we normally hear in Canada. Chomsky responded that in recent years Canada has abandoned many of its more decent characteristics. “Canada used to be a relatively tolerant, open society and less violent than the US. There’s plenty of crime, but was much more moderate and humane than in the South.... But that’s changed in recent years.”
He believes this change happened, in part, because of the North America Free Trade Agreement, which has brought Canadian and American societies closer at an economic level and increased the power of the corporate sector in both countries at the expense of the general population. “It’s also due to policies which are quite openly driving Canada to the right. Canada has changed in international affairs and many other things.”
When it comes to rancorous debate, Chomsky sees the same pollution of the public square on both sides of the border. “If you can’t answer an argument, shriek. That’s true in corporate relations, true in international relations. Just rant. Call people names. Slander them. Anything to undermine an argument you can’t respond to.” He said there are no magic keys, no simple ways out of such issues, whether it’s slavery, women’s rights or the environment. “It’s going to be a long, hard struggle.”
Despite the structural failings of corporations, Joel Bakan believes change is possible, but the solution ultimately has to come from us: “We need to feel we have the right and the obligation as citizens in the public domain of democracy to do something about this.”
This is critically important. People need to become savvier about the systems we’re creating, more aware of how propaganda works and how public discourse gets polluted.
It occurred to me how wrong-headed the demonization of corporate leaders is. We invented corporations for good reasons—to raise immense amounts of capital to build infrastructure such as bridges, railways and air transportation systems. But we also made them furiously focused on creating shareholder value, and in the wake of the anti-regulation movement that started with Thatcher and Reagan we removed many balancing mechanisms and constraining regulations. Corporate CEOs are required to make money for their shareholders, and if they fail to do so they can be in serious trouble, even legally.
No doubt there are some greedy psychopaths at the helm of a few large companies, but there is a much deeper, systemic problem here. Increasing deregulation and unchecked corporate independence, combined with legal constructs that encourage the pathological nature of these institutions, means they can and must act in the interest of shareholders, sometimes to the detriment of communities and the environment. When things go wrong with products—when it’s found that tobacco causes cancer, or oil and gas are changing the climate, when their license to operate is threatened—they are of course motivated to become skilled at propaganda.
The result is a more corrupted debate, more misleading PR and advertising being pumped into the public square. It can be relentless, not because corporate leaders are bad guys but because it’s systemic, and large companies have deep pockets. By allowing corporations to self-regulate we place them in a position where they may actually have a corporate responsibility to their shareholders to pollute the public sphere. Corporations are motivated to manipulate public opinion and perception because when things go wrong, if they don’t, shareholders may be outraged by poor stock prices or the companies might lose their licenses to operate.