The Corporation by Abbott and Achbar - Assignment Example

?The Corporation s The Corporation Introduction Joel Bakan introduces the book by likening the corporation to a humanbeing. He argues that if the corporation was human, then it would be a psychopath. Good men and women has caused harm in the society through the corporation. This is because the way the corporation has been created and protected by the law. The book provides an overview of the origin of the corporation form its legal basis and it outlines all the evil that the corporation has been committing on earth. Some of the evils highlighted by Joel are low wages in the third world, environmental degradation, oppression, increased number of corporate crime, and many others. Joel continues to show in his book the way the corporation diverts the democratic process through donations and lobbying. However, Joel Bakan does not stop at the illegality of the corporation but also offers insight on how the evil can be fought and balancing of power provided back to the citizens. Khan argues based on two fundamental issues. One is the claim that modern corporations continues to cause harm taking advantage of the limited liability nature of the corporations that are existing. Secondly, the attack on us of cost-benefit analysis by corporations while making decisions on health and safety issues regarding the population. The corporation is likened to human being although it poses no feelings. It is the rising of the corporate body. The railway has used the law in order to continue inflicting pain on people instead of making their lives better. The railway is a monopoly and it enjoys the benefits of setting their prices and adjusting them to whichever the cost since they do not face any competition. The monopolistic aspect of the railway corporation in the US is highlighted in this documentary. The documentary also highlights ho the environment is constantly abused by large corporations with the interest if enriching shareholders and managers of certain companies. Chapter 1 The origin of the Corporation The corporation dates back in the early 17th and 20th century. Bakan starts by pointing out the South Sea Company and how the company collapsed due to modern sags of Enron and other corporates. After the collapse of this company, many restrictions were created for joint stock companies. The restrictions were planned and desired and are now on use in the current market. The railways in the US and United Kingdom required financing. The financing led to the limited liability corporations in the whole of Atlanta. Various statutes across the Atlantic were passed to protect the corporation. Bakan continues by pointing out the competition between states like New Jersey and Delaware, in attracting corporations. The states passed permissive statutes, which are not restricting any conduct. Bakan also accuses the US Supreme court as allegedly prejudicing and giving corporation’s rights. The rights protected the corporations at the expense of the newly freed Blacks. This can be reinforced by the fact that the theory of grant came into practice. The corporations acted on the grant theory that permitted them to do anything for duration of time only they could decide to be in operation. Bakan argues that since the corporations are existing and operating as human beings, they are rising and causing grave harm to the society by rendering shareholders and society helpless against the power that they possess. Bakan continues to present both sides of his argument on the evil of corporation and the ways by which this oppression can be sidelines. He makes a major option that ownership of the shareholders and control of their investment is the only way to bring back the control of the corporations in the hands of the public. By achieving this, Bakan argues that the operation of corporations by impunity and lack of accountability can end. The hidden factor that Bakan highlights is that the limited liability companies mask the idea that they cannot exist without the grants from the state. Bakan argues that it is not fair and there are instances where corporations should strive to get their own money to control their own operations. Chapter Two Bakan points out that the corporation has two characteristics. The first one is that the corporation has limited liability and secondly is that the corporation is a separate entity from the shareholders who fund the corporation. Liability according to Bakan is the practical wealth the shareholder owns and not the grant from the state. The corporations have overturned the rules and now base their oppression on bankruptcy law and laws of partnership that have existed since the 16th century not forgetting the law of trust of .Anglo-American. Prof Hillman argues that limited liability has existed in variety of forms in Roman law, Islamic law, and most importantly during the medieval times. With regard to Roman law, the head of the family was responsible for torts of the slaves and the sons in the family. Despite this, the head of the family was allowed to offer the slave as a payment without incurring any liability for the payment. In addition to this, the liability of the slave owner incurred from the contacts was equal and only limited to the choice the slave owner authorized to work with. The assets (peculium) protected the slave owners from debts. Every slave owner required a higher peculium while operating to shield himself from the debts hence liable to his own assets. Professor Hillman equate the slave to the modern share where the slave conducts the business for the owner while the owner is the one suffering most from maximum losses in terms of assets and peculium. Permitting limited liability meant that investors have the right to acquires shares with the companies without fearing or getting concerned about losing their savings. This provides and advantage for an average citizen to become wealthy. Most of the companies have been forcing their employees to participate in creation of this wealth. The big question is how this has been taking place. The answer is through creation of pension plans that are part of the heavy investment in the company’s share. This practice is viable today in most of the companies and corporations. Since the corporate law has gradually evolved from the law of partnership and trust, the aspect and principles of these laws have been transferred to the law of corporation. Most importantly is the concept that board of governors and board members are the beneficiaries of the corporation. This analysis explains the affirmative view of Milton Friedman, The Nobel Laureate in economics. The Laureate argues that the main aim of the corporations is to maximize their profits. He asserts that it is no accident that the courts of equity will always take over controls of the corporation since their basic aim is to maximize profits. Bakan argues that corporations are not evil in themselves but the fact that they are used as vehicles in pursuit of profit by anyone. The corporations allow pursuit of profits to increase massively. John D Rockefeller continued with his operations of the Standard oil as the owner yet in his docket, his company had shares from other investors that he controlled based on trust. Unlimited liability continues to be attractive to creditors but it has imposed heavy costs on the shareholders and other stakeholders. This means that the only true and wealthy are the ones that are able to lobby for special and skeptical positions from the affiliates in this case the sates and governments. The railways precisely led to huge cost associated with the corporations today. The modern companies have their industry dating back to the railways since most of the money that now are controlled by the corporations were contributed for the construction of the railways both in America and the United Kingdom. Chapter 3 The Corporations Harm The corporation continues to wreak havoc in the society. The corporation leads to environmental degradation, leads to low wages, leads to poor health policies, and still permits impunity in the society. Bakan shows the grace injustices that the corporation has been doing to the citizens. The practice of cost benefit analysis that is a basic principle of the corporations is the basis of argument by the author. The corporations utilize the cost benefit measure by determining the safety measures undertaken by the corporations. Bakan provides various examples in support of his argument. Amongst some of the stories include a woman who was driving a Chevrolet in 1979 and another car accidentally slammed on it in a traffic jam while waiting for the traffic light to turn orange. The impact of the vehicle mad the fuel tank to explode. Fire broke out and the woman’s children were burnt. The woman later sued General motors for reckless modification and design of the fuel tank that caused the fire. During the court process, General Motors engineers insisted that maintaining the current fuel tank was cost effective and hence did not crash at the scene. Analysts conducted a cost benefit analysis and concluded that General Motors saved approximately $ 6 in every fuel tank designed. No one can accuse the corporation for this injustice and their rights continue to propel them against great injustices all over the world. The corporations are above the law. They decide what is right and what is wrong. Fox duo and presenters lost their careers for allegedly finding out the side effects of Bovine Growth Hormone, or BGH from Monsanto Company. Before the airing of this film, the Monsanto’s lawyers were at task to change all the content of the story. The film also brings in the sense of capitalism and Taylorism in the context when IBM, hides some knowledge on their machines and insists on regular services to continue with their earning. Adolf Hitler contracted the company in order to provide the database meant to coordinate the war. The computers supplied by IBM had a contractual agreement of monthly servicing despite the fact that IBM had good background knowledge on how to keep the systems in place without regular servicing. Excerpts of economic interdependence and division of labor are evident in the documentary when managers of carpet companies cheat the world that they are selling new carpets yet they just recycle them. In most cases in the US, the corporations have the tendency of elevating their status and make their own decisions. This is relevant when the documentary portrays a Wall Street scandal. Privatization is one way the governments have robbed the public some of their public interests. Private companies manipulate the existing laws to enrich themselves. The psychopathic nature of corporations is and ideology of Max Weber as it focuses on the bureaucracies of the US government. The private ownership of most parastatals and government institutions has robbed locals their rights to earn the best from the community instead they end up paying more in terms of taxes. The corporations have employed Taylorism by introducing job performance rates in their companies. The corporations are competitive and require skilled and efficient work force just like Taylor suggested. Taylorism is also employed when Adolf Hitler contracted IBM to service their machines as he used them to coordinate the war. The scientific management principle is in play in large corporations where large scale manufacturing through assembly of lines takes place such as The Coca-Cola Company. Capitalism is evident from the documentary by the fact that large companies dominates and affects the lives of Americans daily. A clear look of the most of the corporation highlighted by the film indicates that almost half or three quarters of the companies deal with nonagricultural employment. Most of the US people face the danger of losing their jobs anytime due to job insecurity caused by informal economy, which dominates nearly three quarters of large corporations in the US. The corporations continue to privatize the environment in order to permit their elusive ways of insubordination. Bakan argues that the sate has the mandate to make decisions over the corporations but has failed to do so since they are affiliates. The courts, which have the mandate to protect the government and the right of nay individual, continue to violate the rights of the people. Canadian courts similarly have permitted their law to protect the corporations hence most of the multinational companies continue to engage in cost benefit schemes that only benefit a few members of the society. The Canadian Courts have masked the law to permissively allow these acts at the expense of their citizens according to the author. Bakan argues that privatizing the environment is one way the corporations can use to protect the environment. This is because the corporations will use the environment to maximize their profits. For this purpose, the corporations will be more than willing to protect and take care of the environment since it is their arm to generating profits that they seek. According to Galiani, Getler and Schargrodsky, the Argentines privatized their water bodies and the rat of child mortality was able to decrease from 5% to 7%. The research further indicates that areas where people lived were the most affected and data indicates that approximately 24% reduction of child mortality. Bakan insists that the fact corporations nag the states to slacken their rules about the environment issues only continues to harm the corporations since they will ultimately require a safer environment for their operations. Bakan insists that if the limited liability is abolished, only a few individuals in the society will benefit. Conclusion This book can be read by any person who has a bearing on oppression and mismanagement of public domains by multinational companies known as corporations. It continues to provoke sensible minds on the legitimacy of Corporations in controlling massive amount of money in he world. One question that must be lingering in the brain of the reader is whether to abolish the corporation. To those readers who are keen and are following closely the court proceeding of the Liberal Party of Canada and the mismanagement of the state of the fisheries, forests and other skeptical issue believe that ownership of the corporations by the stakeholders and shareholders is the answer to attaining the control of corporations. The truth of the matter is that the corporation exploitation continues to renders most people poor and therefore reducing the rate at which development occurs in most of the countries in the world. Works Cited The Corporation (Documentary). Dir. Jennifer Abbott, and Joel Bakan Mark Achbar. 2007. Read More