The Corporation: The Pathological Pursuit of Profit and Power
By Joel Bakan
New York: Simon & Schuster, 2005, $14 paper
Hegemony or Survival: America’s Quest for Global Dominance
By Noam Chomsky
New York: Henry Holt & Company, 2004, $13 paper
Good Muslim, Bad Muslim: America, the Cold War and the Roots of Terror
By Mahmood Mamdani
New York: Doubleday Publishing, 2005, $14.95 paperback
Cuba; A Revolution in Motion
By Isaac Saney
London: Zed Books, 2004, $19.95 paper
THERE ARE TIMES when a key analysis has a wakeup effect. The last year saw the publication of four books that together have a potential of such an event, at least for those U.S. citizens who are motivated to try and understand and change the world. The four were not written with the idea that they would be read together, yet taken together they are, I believe, more thought-provoking than if considered separately.
Hegemony or Survival, by Noam Chomsky, is about Euro-American Imperialism; Joel Bakan’s The Corporation describes the underlying source of imperial need; Mahmood Mamdani’s Good Muslim, Bad Muslim is about the aftermath of the Cold War; and the last, Cuba, a Revolution in Motion, by Isaac Saney, presents a potential model for the future. Chomsky shows what is wrong, Bakan tells why, Mamdani makes it current, and Saney provides hope.
Chomsky dissects U.S. foreign policy with typical penetrating insights, using his customary model of power and its maintenance. The emphasis is on the present, but with clear forays into the historical roots of particular policy choices made by recent administrations. He begins with a sobering biological note: as a species we seem to have developed the technology for self-annihilation, but not the sociopolitical skills that would allow for control of that technology. And in particular, the United States of America has developed a pathological need for hegemony that threatens our survival.
Chomsky’s focus is on the post-Soviet period, where the United States is the world’s unchallenged military power, and on the attack on the World Trade Center as a pivotal moment. As he noted in his book 9/11, the attack was certainly a turning point in world history, but not for the reasons given by Washington. Instead, he points out, for the first time in U.S. history, the guns of terror were turned around.
He notes that there remains only one country in the world charged with terrorism in a court of law, when the World Court judged the United States guilty during the contra war against Nicaragua. This remains an important historical point progressives need to cite more frequently: the country that boasts most loudly about fighting terrorism is the only one that has ever been formally found guilty of said crime.
As Chomsky points out elsewhere, a good first step in a sincere fight against terrorism would be to simply stop engaging in it. Chomsky dissects the U.S. political agenda with characteristic bluntness, and an irony that can be fully appreciated only by a progressive mind. For example:
“The final years of the millennium witnessed a display of exuberant self-adulation that may even have surpassed its none-too-glorious predecessors, with awed acclaim for the leaders of an ‘idealistic new world bent on ending inhumanity,’ dedicated to ‘principles and values’ for the first time in history.”
Having used Chomsky’s writings in undergraduate courses, I note that his style can be confusing to the naive. I have seen statements like the above passage taken literally without the irony intended — such being the state of U.S. higher education. But even if the irony is mainly to be appreciated by fellow travelers, the analysis remains profound, as in all of Chomsky’s work.
In elaborating the problems of Iraq and the Middle East, Chomsky predictably emphasizes the U.S.-Israeli axis. The almost universal animosity of the Arab world against the United States is grounded in the correct perception of the long-standing mutual association between the United States and Israel, the most dangerous entity in the Middle East.
Israel acts as a U.S. surrogate for strategic control of Middle Eastern oil supplies, and the United States is Israel’s sugar daddy. Bringing Turkey into the equation, Chomsky notes that much of the Middle East regards these three countries as the true axis of evil.
Chomsky’s model is, as in his previous works, the maintenance and projection of power and privilege. It is an attractive model for two reasons. First, it obviously works as an explanation of the world — ask who is powerful and examine what they do to maintain it. The curtain is usually pulled back to reveal a self-interested power broker at the controls.
Second, it is a model that almost everyone can recognize. Those who currently have power and privilege construct whatever needs to be constructed to maintain their own competitive advantage.
This brings us to The Corporation. Joel Bakan, a Canadian lawyer and law professor, provides an historical and legal analysis of the very idea of the corporation. The book’s subtitle The Pathological Pursuit of Profit and Power is not just dressing designed to sell books.
Bakan begins with the definition of pathology; moves to the nature of the corporation as an individual with rights and responsibilities, and concludes that this particular structure is probably not the best we can do, indeed it could very well lead to our ultimate end — the mechanism of Chomsky’s biological salvo about our ultimate survivability.
Bakan’s analysis is mainly legal. The corporation as a legal entity must not only operate within a prescribed set of laws, but also must evolve according to particular legal principles.
These principles, while set out for all to see, are remarkably at odds with the image that today’s large corporations seek to project: Pfizer seeks to produce medicines to help the sick; Archer-Daniels-Midland seeks to grow food to feed the world; Amco supports biomedical research to prolong life.
The philanthropic activities of corporations and the foundations they spin off are legion. The wise modern corporate manager seeks to project his or her corporation as having legitimate humanistic goals. But as Bakan so eloquently notes, it is not legally permissible for a corporation to pursue such goals.
After providing numerous examples of corporations’ good deeds (whether sponsoring Little League teams or feeding the world) he goes into fascinating detail about an interview he was granted with free-market guru Milton Friedman. In addition to the ultimately unflattering portrait of a self-absorbed and delusional egomaniac, Friedman’s analysis is ultimately correct. Corporations are not legally bound to do anything except pursue profit.
Indeed the corporation, by fundamental economic principles, is legally bound to do nothing except make profit. All the talk about corporate responsibility (especially in the areas of the environment and labor rights) is not just smokescreen; under its charter that activity is actually illegal.
A particularly instructive example is the experience of Henry Ford. Bakan reports Ford as saying:
“I do not believe that we should make such awful profits on our cars ... A reasonable profit is right, but not too much.”
As a consequence he slashed prices on the Model T and raised workers wages.
But the Dodge brothers, major shareholders in the Ford Company, had big plans to build their own car company, using the dividends from their shares in Ford. When Ford decided to cancel the dividends in 1916 in order to provide lower prices for his customers, the Dodge brothers brought him into court arguing that:
“Profits belong to shareholders ... and Ford had no right to give their money away to customers, however good his intentions. The judge agreed.”
The court’s decision pointed out that a (publicly held) business corporation could not be run “for the merely incidental benefit of shareholders and for the primary purpose of benefiting others.”
Even if a hypothetical CEO wanted to be environmentally responsible, or give priority to labor rights, he or she is legally compelled to maximize profits and can engage in other social benefits only when these have a prospect of increasing those profits.
The legal system, of course, reflects the underlying requirements of the current stage of capitalism. Corporations, which are legally chartered for maximizing profit and capital accumulation, can’t be permitted to stray from that purpose. As Bakan summarizes, “Corporate social responsibility is thus illegal — at least when it is genuine.”
I do take minor issue with Bakan’s historical setting. He begins his story about 150 years ago, but my own reading of corporate history begins far earlier, with the Dutch East India Company.
The basic structural form, as so persuasively argued by Karl Polanyi in his classic The Great Transformation, was the consequence of the special kind of market that emerged in Amsterdam in the 17th century, where goods from far-off lands were purchased by men and women of means.
The combination of a need for investment capital and military protection gave rise to the fundamental corporate form. The Dutch East India Company dominated world trade for two hundred years, sharing some of the later period with the English East India Company. While the legal basis of the corporation was to be established in the early 20th century, the basic form, including exploiting foreign lands, top-down control and fealty to the bottom line, was a continually evolving structure that began in 1602.
Nevertheless, as a framework that explains much of Chomsky’s underlying model, Bakan’s contribution seems especially important. It is not necessary to resort to “it’s obvious” when seeking to explain the tendency of the powerful to protect their privilege. It is an outgrowth of capitalism itself, which mandates that people behave that way.
This is all put into a contemporary perspective in Mamdani’s Good Muslim, Bad Muslim. The author begins with a recent history of both Christianity (at least its fundamentalist forms) and Islam. He emphasizes the West’s conceptualization of the good Muslim (basically secular) and the bad Muslim (basically fundamentalist), and argues that this conceptualization muddies the water.
Mamdani proposes instead that recent history of Islam is more understandable as a division between cultural and political Islam. Most importantly “terrorism is born of a political encounter. When it harnesses one or another aspect of tradition and culture… [it is] a modern political movement at the service of a modern power.”
Mamdani’s reading of political terror, mainly perpetrated by the United States, between Vietnam and 9/11 is virtually identical with Chomsky’s. Nevertheless, his point is quite different. He seeks to establish a framework on which current events, especially though not exclusively in the Middle East, can be positioned.
His basic argument is that the Cold War was largely fought by proxy and largely in the Global South. The consequences for the people of the Global South, obviously of no concern to the powerbrokers in the North, were devastating in both the loss of human life and potential future development.
The U.S. strategy beginning with the Carter administration, but honed to terrifying efficiency by the Reaganites, called “rollback,” was to attack all left-leaning governments in the Third World, and to promote Vietnam-like problems for the Soviet Union on its borders.
This applied especially in Afghanistan, but also within the Soviet Union itself, mainly in Uzbekistan and Tajikistan. The overall plan was to transform the doctrine of containment into a more aggressive policy aimed at eliminating so-called Soviet influence from the world and then destroying the Soviet Union directly.
Obviously the Cold War strategy of building vast supplies of nuclear weapons and faster and more sophisticated tanks and other battlefield apparatus for the European theatre could lead to either stalemate or apocalyptic disaster. A more sophisticated approach was needed. This was the origin of the philosophy of “rollback.”
As Chalmers Johnson reported in his insightful book Blowback, the consequences of rollback have led to dramatic and unintended consequences — what the CIA calls blowback. Mamdani documents two major blowbacks. The first is the U.S. drug problem, initially manifest as a massive heroin problem (largely a consequence of CIA activities in southeast Asia) but later morphing into a massive crack problem that was substantially a consequence of CIA activities in Central America.
CIA operatives simply look the other way as their assets, frequently well-known drug czars or employees thereof, maintain drug operations, including modern industrial facilities.
Perhaps more important is the second blowback, from the war in Afghanistan. Mamdani traces the decision to create a “Vietnam” on the Soviet’s doorstep with the internationalization of a radical political Islam. He leaves no doubt that the roots of Al Qaeda lie with the remarkably complex maneuvers of the CIA in their war against the Soviets in Afghanistan.
In the end, the most devastating consequence of U.S. behavior was the legacy left of a highly trained, ideologically narrow, and strategically single-minded cadre whose mission in life is, as they were taught by the United States, to destroy the infidel. Consequently 9/11 is the biggest irony in world history.
If Chomsky offers the historical overview, Bakan the underlying dynamic structure, and Mamdani the contemporary focus, all three share the same recipe for the potential antidote — movements of grassroots democracy, especially, but not exclusively, in the United States. With the U.S./Israel axis the overwhelming power it is, and with fundamentalisms of all sorts calling the shots today (fundamentalist Christian in this country, right wing Jewish in Israel, and several Taliban-like formations in Islam), it is difficult to root for any side in the current world conflict.
What might happen with the union of the traditional labor movement with the anti-racist movement, the feminist movement, the solidarity movement, and the environmental movement? If traditional politics with its currently fundamentalist character is driving the world toward oblivion, then a movement focused on global justice offers hope for the future. I concur with all three authors on this point.
With Chomsky’s theoretical overview, and Bakan’s understanding of why many of the events are a necessary consequence of capitalism, and Mamdani’s bringing it home to contemporary problems, the inclusion of Cuba: a Revolution in Motion might seem out of place. In the first three books we have a view of the contemporary world as controlled by the most sordid requirements of corporate capitalism, while Saney’s book seeks to look at Cuba’s accomplishments and describe how they are directly related to socialist organizing principles.
The book’s historical narrative does intersect with the other three books in major ways, from the challenge to corporate principles, to the routing of the South African military in Angola, to the positioning in the Soviet orbit during the Cold War. However, its importance for this essay is in its placement of Cuba as a model.
Cuba has a world-class health system, a world-class educational system, the highest level of equality in the world, has recently survived the worst economic crisis in history, and is currently moving toward the best ecological system in the world. However, many progressives then ask “Would I give up all my personal liberties and live under a cruel dictatorship with no democratic means to effect change just for a good health care system?” Of course not.
Saney’s portrait of Cuba is a sympathetic one, beginning with an overview of Cuban history, followed by a detailed history of U.S. aggression. It is really quite foolish to try and understand Cuba without this history. It is useful to see it described in all its detail, from the Platt amendment giving U.S. “legal” authority to invade Cuba whenever it so pleases, to the continual expenditure of hundreds of millions of dollars on the attempt to create an internal opposition.
Between those two effectively historical chapters he deals with governance (chapter 2), race and inequality (chapter 3) and criminal justice (chapter 4). Chapter 2 is important as most works on Cuba seem to ignore the special political structure that has evolved in Cuba, a structure that speaks to the issues of personal liberty and democracy.
Cubans see their democratic system as one in constant evolution. I was once told in casual conversation with a Cuban in Pinar del Rio that he regarded the U.S. system as incomprehensibly arrogant in “claiming” to be a democracy. Democracy, according to him, had to be judged on its practice, and was a project to be honed and perfected, not a thing to be declared.
Formally, the political structure in Cuba is based on the idea of popular power. Saney goes into all the details (and they are indeed complex) of how elections are structured so as to encourage active participation, from municipal assemblies to provincial assembles and up to the national assembly. The key idea is participation, and the most participation happens at the municipal level.
Cuba is not a perfect society, and a casual conversation with almost any Cuban will convince you of that. Cubans complain about their political system just as U.S. citizens do. But that criticism is not of the system, but rather of the current administration. It is not difficult to find Cubans who say “the government stinks.” However, very few will say the system is wrong. Such criticism is part and parcel of any democratic system.
In my own experience, after hearing a litany of what is wrong with Cuba from taxi drivers and others, I have taken to ask the question “so, would it be better to have the U.S. solution, which is to say, development of a U.S. style political system where those Cubans who live in Miami will come back and return to their traditional role?”
Thus far I have not found anyone in Cuba who thinks that would be a good idea. Indeed, when asking that question I am usually greeted with a look of astonishment and then laughter, as if I was asking if the earth was flat.
What Saney presents in his generally favorable review of Cuba is a picture of a new experiment, which despite Herculean U.S. efforts is working. It has produced some remarkable advances, acknowledged by all international observers. Even the World Bank has suggested that underdeveloped countries look to Cuba as a possible model.
As we move away from the irrational and self-defeating system described by Chomsky, Bakan and Mamdani, our international grassroots democracy movement needs to consider alternatives. Maybe Cuba won’t survive. Indeed at the beginning of the Iraq war there was serious concern that Cuba could be the next victim — a fear now somewhat reduced given that the U.S. government is so tied down militarily and bankrupt politically precisely because of that war.
When Fidel Castro passes on there will be even increased pressure from the US to disassemble the current system, and whether it can withstand such pressure remains to be seen. But even if it fails, as an experiment it is already a success and will likely continue to inform and inspire any new movements looking for true democracy and a fair and equitable form of governance.
ATC 120, January–February 2006