Joel Bakan - The New Corporation: How Good Corporations Are Bad for Democracy

ON APRIL 19, 2019, the Business Roundtable, led by JPMorgan Chases Jamie Dimon and composed of more than two hundred of Americas top CEOs, heralded the dawn of a new age of corporate capitalism. Henceforth, the CEOs proclaimed, the purpose of publicly traded corporations would be to serve the interests not only of shareholders but also of workers, communities, and the environment. The declaration capped a two-decade-long trend of corporations claiming to be different, to have changed into caring and conscientious actorsready to lead the way in solving societys problems. I call it the new corporation movement. And for those within it who occupy the rarefied heights of elite corporate boardrooms, life has been good. For a twenty-year run, productivity was up. Profits were up. Stock prices broke records. Innovation seemed boundless. New ways to make money were discovered each day. And the rich kept getting richer. No doubt the coronavirus pandemic has tamped down the rise, and it may be awhile before corporations regain their full swagger. But they almost certainly willespecially as governments shower them with bailouts and infusions of cash.

Less certain are the fates of the vast majority of people in the United States and around the world whose lives became increasingly precarious as Wall Street soared and who, as a result, now suffer inordinately from the pandemic. Over the last two decades, workers wages stagnated, inequality spiraled, public servicesincluding health serviceswere shredded, good jobs and unions disappeared, and people worked harder for less pay and with less security (if they worked at all). Today, half of Americans cannot pay an unexpected four-hundred-dollar bill without selling something or going into debt, and millennials are the first generation in U.S. history to be worse off than their parents. Proper health care and housing are beyond the reach of many, and for the first time, mortality rates in the United States began rising in 2014. Opioids destroy lives and communities, and deaths of despair, from suicide and drugs and alcohol, are at all-time highs. Growing social division fuels hate and xenophobia, corrodes democracy, and enables the rise of demagogues, while climate change ravages the planet with ever-deadlier wildfires, floods, droughts, and hurricanes, heightening the risk of future pandemics, among other things.

Despite their claims to be ready to help, the new corporations cannot solve these global ills. But more important than thatand this is my central argumentthey are a large part of the reason things have gotten worse so dramatically and quickly over the last two decades. Indeed, the publicly traded corporation (hereinafter the corporation) never really changed, at least not fundamentally. It is the same psychopathic institution I diagnosed twenty years ago (in a book and a film, both called The Corporation). But it is more charming now. And it uses that new charm to convince us that its benevolent, that we can drop our guard and let it take control.

Casting themselves as good actors, corporations cajole governments to free them from regulations designed to protect public interests and citizens well-being, claiming they can be trusted to regulate themselves. They take over public serviceslike schools, water systems, and social services provisionsaying they will run them better and more efficiently than governments, and they push for tax cuts with promises of jobs and other societal benefits. The result? Governments retreat from governing, corporations take greater control, and we become a society that no longer has corporations but that is corporatethe reason, I claim, good corporations are bad for democracy.

Fortunately, there is a counterforce. Global resistance to corporate power and rule has surged over the last decade, an antidote to both the false hope of the new corporation and the growing sense of hopelessness pervasive in society. More and more, through rising protest and political action, people refuse to accept the hollowing out of democracy and the severe threat corporations pose to people and planet. It may be that the coronavirus pandemic is weakening corporations hold on society, as it lays bare the injustices and inadequacies of the current system, and fosters newly robust senses of community and democracy. Thats cause for hope, no matter the many reasons for despair.