This book review by Malini Chidambaram dives into Joel Bakan’s critique of modern corporations, especially those that cloak themselves in social responsibility.
TWAILR: Reflections ~ 66/2024
Introduction: Thesis and Trajectory
The New Corporation: How “Good” Corporations Are Bad for Democracy by Joel Bakan is a sequel to his earlier book and documentary, The Corporation: The Pathological Pursuit of Profit and Power. In this new book, Bakan continues to critique the corporation as an institution as being anti-democratic. However, his renewed focus is on ‘capitalism’s doves and lambs, not its lions and tigers and bears.’ This refers to the book’s shift in focus from overtly pathological corporations to those that present themselves as socially responsible or “good” actors. He asserts that these corporations, while engaging in philanthropy and espousing corporate social responsibility initiatives, ultimately prioritise their own pathological pursuitofprofit-driven interests over the welfare of society at large. It highlights how these seemingly benign corporations are still bad for democracy. This is, indeed, the central thesis of the book.
This book review critically engages with Bakan’s thesis and its progression, examining its relevance to the Global South and its postcolonial contexts. By contextualising the book within this framework, I aim to present a holistic assessment that acknowledges both the merits of his analysis and the necessity of interrogating its broader implications. I argue that the inflection of a postcolonial methodology to Bakan’s work highlights an alternative experience of law, democracy, and development, necessitating an unpacking of how this experience speaks to Bakan’s analysis. In concluding this introductory section, I will briefly outline the structure of this book review, providing a roadmap for its trajectory. It entails a three-part structure. First, I will provide descriptive insights concerning the first five analytical chapters of the book, exploring its methodology, style, and their intersection with key factors. These factors include the author’s background, the book’s limited geographical setting and the suitability of its methodology. This analysis aims to elucidate the significant contributions of Bakan’s work while providing the necessary context for understanding its fault lines, which will be further elaborated upon in the next section. Second, I will critically analyse Bakan’s sixth and final chapter, where the postcolonial lacunae become prominent. Drawing on specific examples from the Indian experience of law and democracy, I offer an alternative to Bakan’s views, exemplifying the divergence between his call for action and the nuanced realities of the Global South. This broader examination will allow for a more nuanced understanding of the relevance and potential limitations of the book. Third, I will conclude the book review by revisiting Bakan’s medicalised metaphor of pathological corporations and discuss pathways towards remedies.
Context: Understanding Author, Book, Method and Style
In The New Corporation, Bakan employs a multifaceted approach that combines storytelling, real-life examples, and structural analysis to convey his arguments and insights. This method is strongly connected to his background as a legal academic, documentary filmmaker, writer, and jazz musician. As a legal academic, Bakan brings a deep understanding of the legal framework surrounding corporations and their impact on society. His expertise allows him to provide detailed analyses of laws, regulations, and corporate practices, highlighting their implications for democracy and social justice. He argues that while the law creates corporations to pursue profit and growth, it also regulates them to protect people, communities, and the environment from their potentially harmful actions. However, Bakan criticises the concept of ‘self-regulation and collaboration,’ often championed as liberating for corporations, as being fundamentally anti-democratic. By freeing corporations from regulation, we allow them to operate without accountability to society, undermining democratic principles. Here, Bakan undertakes a knowledge and power analysis to examine the relationship between law, particularly corporate law, and development.
While Bakan primarily focuses on U.S. Corporate Law, considering TWAIL’s commentary on the simultaneous inability of domestic and international law to regulate corporations adds valuable context. This perspective sheds light on the asymmetrical balance between creation for profit and regulation for social good, which Bakan also emphasises. The notion of balancing creation and regulation presupposes a certain level of efficacy in legal oversight. However, as highlighted by international law scholars, the reality is far more complex. Attempts to regulate corporate behaviour have often been built upon idealised assumptions about both corporations’ susceptibility to legal control and states’ capacity to enforce such control. However, these assumptions are unsustainable, as they mark rival practices of world-making, each travelling with rival accounts of international law.
Bakan’s background as a filmmaker, writer and musician influences his writing style, as he effectively employs storytelling techniques to engage readers and bring complex concepts to life. His writing style incorporates onomatopoeia and vivid descriptions that evoke sound and imagery. Words like ‘sounded the alarm,’ ‘champagne flowing and music booming’, and ‘music to corporate’s ears,’ among others, evoke the soundscape of the narrative. These acoustic descriptions transport readers into scenes like the World Economic Forum in Davos, creating an engaging and immersive reading experience. By utilising these literary techniques, Bakan not only engages the reader’s intellect but also appeals to their senses and imagination. This enhances the accessibility of his arguments to a wide readership, allowing them to easily grasp the impact of corporate behaviour and the implications for democracy.
Bakan’s experience as a documentary filmmaker and his previous work on The Corporation not only shaped his analytical and stylistic approaches but also provided him with access to a wide range of interviewees for his book, The New Corporation. Among these individuals was Bibop Gresta, the co-founder of Hyperloop Transportation Technologies, based in Silicon Valley. Gresta’s insights and perspectives serve as a springboard for Bakan’s antepenultimate chapter titled ‘California (Bad) Dreaming.’
In this chapter, Bakan delves into the practices and ideologies of big-tech companies, using them as an example that exemplifies his central thesis. During their conversation, Gresta envisions ‘a new generation of companies that can solve all the problems of humanity ’. He emphasises the role of corporations, including Hyperloop, in addressing societal challenges. Here, Gresta suggests that democratic governments have no place in this vision, dismissing democracy as a mere ‘meme’ and advocating for replacing government actions with business-driven solutions. However, Bakan’s incorporation of Gresta’s perspectives contributes to the richness and depth of his analysis. The book offers insight into prevailing attitudes within influential corporate circles by including such interviews. Such perspectives align with the belief of many elites in Silicon Valley who view democratic governments as outdated and propose a technocratic future. It highlights the urgency of critically examining the relationship between corporations, democracy, and societal well-being. Consequently, Bakan’s strength lies in his ability to uncover these structural dynamics and shed light on the existence and implications of such ideologies, drawing a clear connection to his thesis.
Bakan’s exploration in The New Corporation leads him to a perceptive observation: the notion of being a “good” corporate often entails to ‘do well by doing good.’ In this context, Bakan exposes the paradoxical rhetoric of concern and benevolence employed by corporations, while they simultaneously work to dismantle the social state. This dichotomy highlights a phenomenon that Bakan terms ‘corporate socialism’, where corporations benefit from deregulation and subsidies. At the same time, the working class and the poor face the harsh realities of unfettered capitalism. During a discussion on the podcast Countersign, hosted by Stewart Motha, Bakan elucidates this point by drawing upon the historical context of Nazi Germany and their (mis)use of the term ‘national socialism.’ Through this example, Bakan draws attention to the appropriation and distortion of socialist ideals by authoritarian regimes and the dangers of manipulation of language and ideology for self-serving purposes. He invites readers to scrutinise the motives and strategies employed by corporations, cautioning against the uncritical acceptance of corporations co-opting similar rhetoric to further their self-interest.
This work closely resonates with books such as Linsey McCoy’s No Such Thing As A Free Gift: The Gates Foundation and the Price of Philanthropy and Anand Giridharadas’s Winner Takes All: The Elite Charade of Changing the World. While both are noteworthy contributions, the scope of their analysis differs from Bakan’s in two key ways. Firstly, Bakan’s workplaces central emphasis on themes of law and democracy as crucial avenues for understanding corporate behaviour. Secondly, Bakan’s work has a broader scope compared to McCoy’s focus on the Gates Foundation and Giridharadas’s insider perspective into corporate circles. Bakan’s analysis encompasses various stakeholders and institutions within a broader landscape. These distinctions make it both possible and necessary to extend a postcolonial methodology to Bakan’s work, exploring the insights that emerge from integrating these perspectives.
Postcolonial Methodology: Beyond Orthodoxy of Law and Democracy
In his final chapter, titled ‘Democracy Unbound,’ Bakan acknowledges his intent to move beyond analysing the realities of the new corporation and explore solutions. He proposes that activists engaging in electoral politics can be a viable alternative to corporate power. While Bakan briefly acknowledges the need for activism alongside electoral politics, his overwhelming emphasis remains on the electoral sphere. He provides instances, primarily from the Global North — United States of America (USA) and Spain — to support his argument. One example he highlights is the case of Chokwe Lumumba in Jackson, USA. Lumumba was elected as the mayor of Jackson, Mississippi, and his administration pursued an agenda focused on community empowerment and economic justice. Bakan views Lumumba’s election and his subsequent efforts to create cooperative enterprises and challenge corporate power as a demonstration of the potential for electoral politics to bring about meaningful change.
Bakan’s transition to the solution-oriented chapter is notably abrupt and disconnected from his preceding analysis. While the previous five chapters meticulously describe and analyse the pathologically self-interested nature of corporations, the final chapter’s proposed solutions appear hasty presented and lacking in contextualisation. The examples given predominantly focus on political movements and figures in the Global North, making it difficult to draw a direct connection between these examples and Bakan’s thesis on the pathologies of global corporate power. The limited geographic scope of the examples may also hinder their applicability to the complex challenges faced by communities and societies in the Global South, where the dynamics of corporate power and political systems differ significantly.
Yogendra Yadav is an Indian activist-turned-politician. He positions his political ideology within an Indian tradition of democratic socialism. He is also an academic and researcher, theorising on the specificity of the Indian democracy. I will leverage his work as a case study to illustrate an alternative experience of law and democracy in the Global South. This viewpoint diverges significantly from Bakan’s examples drawn from the Global North. In his 2020 book, Making Sense of Indian Democracy: Theory as Practice, Yadav delves into his activism, politics and the Indian democracy. He discusses the pervasive phenomenon of democratic capture and the erosion of democratic institutions in India, which has been particularly notable since 2019. This observation serves as a challenge to the prevailing notion in the Global North that neatly categorises nations into democratic and non-democratic – an oversimplification that fails to encapsulate the complexities of India’s post-2019 democracy. Yadav argues that the intricate interplay of the political logic of the Indian democracy, the economic logic of neo-liberalism, the social logic of a transitioning caste system and the cultural logic of Indian modernity collectively influence the ways in which law, democracy and development play out in Indian circumstances. This renders endeavours akin to Lumumba’s unlikely, if not unfeasible, in the Indian context. However, the crux of the matter lies not merely in the improbability of winning elections under current circumstances, but also in the inability of such victories to actuate meaningful change. This becomes evident as Yadav underscores the hollow nature of democracy in India, where political parties collude with entrenched vested interests, particularly crony capitalists, to fundamentally undermine democratic processes, including elections. Hence, within the dynamics of law, democracy, and the crisis of late capitalism in India, activists engaging in electoral politics are hardly an alternative to corporate power.
Furthermore, a critical examination of Bakan’s view of electoral politics as a site of struggle and ‘capacity to resist’ reveals that such a perspective is not devoid of underlying assumptions. By reinforcing the primacy of the nation-state as a category of collective identity, Bakan’s analysis overlooks the complexities of legal pluralism and the necessity for a postcolonial analytical framework. Although the book does not explicitly adopt a postcolonial methodology, it is imperative to address this aspect given the close interconnection between colonialism, neo-colonialism and the law and development project. Bakan himself acknowledges the role of capitalism in fueling a new form of colonialism, underscoring the significance of incorporating such an analysis into the discourse on pathological corporations. The centrality of the concept of nation-state to our understanding of collective identities, along with development’s influence on constructing and perpetuating contemporary global orderings, often supported by legal frameworks, challenges the optimism expressed by Bakan regarding electoral politics.
Moreover, Bakan’s examples of activist-turned-politicians shed light on the nuanced realities of occupying political offices. While these examples showcase the potential benefits of such positions, they also underscore their inherent challenges and limitations. Lumumba and others who have transitioned into governance acknowledge the complex nature of their roles, requiring them to navigate diverse interests and priorities. This is evident in the experiences of Ada Colau, the Mayor of Barcelona, who recognises that the responsibilities of political office extend beyond advancing the specific agendas of the movements that helped secure her election. Colau’s awareness of these broader responsibilities is a euphemism for the underlying tensions that arise when working within a framework that accommodates colonial and capitalist interests. As one can imagine, these tensions are further exacerbated in postcolonial experiences of law and democracy, as evidenced by Yadav’s case study and numerous other instances from the Global South.
Conclusion: Hope as Reparative and Generative
In conclusion, while Bakan diagnoses corporations as ‘psychopaths’, what he proposes as a solution can, at best, be seen as first aid. Here, I borrow and expand on the useful metaphor of medication and therapy, which Manish originally introduced during a question he posed in our International Law and Development class on Bakan’s book at Melbourne Law School. The recurring themes of sickness and healing are present throughout this conclusion.
A holistic approach, including medication and therapy, requires more consideration of postcolonial realities and looking beyond the Global North and nation-state framework. Central to Bakan’s argument is the emphasis on hope, which he deems as a revolutionary act in the contemporary world. Importantly, Bakan’s emphasis on hope should not be misconstrued as a mere descriptive or romantic endeavour. He is driven by a desire to ideate and propose actionable solutions. Hope, therefore, holds the potential to be reparative and generative, whereby we can aspire to mend the deep-rooted fractures caused by corporate dominance.
In reflecting on Bakan’s work, I perceive his emphasis on hope as one of the book’s significant takeaways and a potential pathway to remedy. The notion of continuously hoping and striving towards a solution, coupled with critical awareness and reflection, embodies a proactive stance in addressing the pervasive issues of corporate dominance. It underscores the importance of maintaining a hopeful outlook while simultaneously engaging in rigorous analysis and action to effect meaningful change.
