The “New” Corporation

 BY THOMAS KLIKAUER – NADINE CAMPBELL

The corporation may well mean corpus or a body of people, yet these are not ordinary people just as corporations are not ordinary organisations. Historically, the archetype of an evil corporation remains the East India Company tasked to exploit British colonies and most the people who lived there. Such an old corporation was very much seen as an evil corporation dedicated to what one of the master chefs of neoliberalism once called the social responsibility of business is to increase its profits – in whatever way possible.

Despite media capitalism’s rather marvellous public relations apparatus, negative perceptions of corporations had begun to increasingly sieve through, entering the general population during the latter half of the 20th century. More recently, so-called scandals – which in reality regularly occurred in corporate capitalism – like Ford Pinto, Nestle, Bhopal, Enron, Exxon Valdez, the global financial crisis of 2008, followed by Volkswagen’s Dieselgate, etc. began to pile up. It was time to re-birth the old corporation as the new corporation.

The new corporation pretends to be kind to workers, communities and the environment. At the same time, the new corporation continues to make sure that the rich are getting richer. To underscore this, JPMorgan’s CEO even announced the dawn of a new age of corporate capitalism with the goal of casting corporations as good actors. Key to the new corporation has been the Davos meeting also known as the World Economic Forum (WEF) run by a small clique of the global super-elite that has accumulated enough money and power to be granted access to the WEF.

WEF boss – Klaus Schwab – sees the new corporation as a blend of moneymaking and social responsibility. Next to business ethics, corporate social responsibility or CSR quickly became key ideologies of the new corporation. Both are pushed by business school professors and corporate apparatchiks inside corporations and adjacent PR-firms. CSR makes it easy for the new corporation to broadcast Schwab’s dream of the new corporation with a heart. All of this is aimed at pretending that the new corporation is a good global citizen. The advocates of the new corporation claim that 80% of the Davos elite rejects a return to Friedman’s shareholder value – profits at all cost.

Joining the bandwagon are the usual suspects of the global managerialist elite. Some are so-called management gurus who are called gurus because most managers and business journalist find it hard to spell the word charlatan. One of them – super-guru Michael Porter – rides on the bandwagon when saying, corporations have to change their tune, it’s undeniable. For once, he spoke the truth. The new corporation is a change in tune. The new corporation is just as the German philosopher, Adorno, once said – it is a variation of a theme. The theme being corporate capitalism and variation is the ideology of the new corporation.

In a PR drive toward reputation-conscious public relations, new corporations like Walmart, Coca-Cola, Procter & Gamble, etc. are suddenly making very sweeping promises of full sustainability, promises such as 100% carbon neutrality, zero waste to landfill, 100% recycling, etc. It is what Joel Bakan calls a kind of Ben & Jerry fiction of big business. In short, l’idée fixe new corporation is yet another diversion to conceal profit-making and accompanying corporate pathologies. The ideology of the new corporation is mainly about pretending what’s good for them is good for us – the bread-and-butter issue of CSR.

Behind the façade of CSR, the new corporation mercilessly pushes profits and tax cuts. The Coronavirus pandemic, for example, revealed how Donald Trump’s tax cuts saved JPMorgan $5 billion in 2019. It also shows how the same tax cuts helped corporations to reap record profits while simultaneously starving the government of the means to protect citizens in the face of a global crisis. Worse, America’s superrich boosted their collective fortune by $248 billion during just three weeks of the pandemic. These fortunes came at a time when thousands died.

Beyond that, the new corporation says it cares about social and environmental values. Yet they, the new corporation, does not want to pay taxes to protect and promote these much-acclaimed values. Despite polished rhetoric of conscientious commitments, corporations embracing social and environmental values, etc., the new corporation does so only when it helps them make even more money.

One such a social and environmental initiative is Unilever’s training of rural Pakistani women to become beauticians. In reality, the idea is creating a new market and sales force for Unilever’s beauty products. Similarly, Coca-Cola is mounting youth empowering programmes in Brazil’s impoverished favelas creating loyal customers for its products. Doing good can build positive reputations helping corporations to attract new customers.

Even global warming deniers and right-wing Koch industries have jumped on the new corporation and CSR bandwagon claiming to practice sustainability. And indeed, its companies have programmes to reduce waste, save energy, recycle resources, and prevent pollution. But Koch’s coal mining – unquestionably a profoundly unsustainable practice – continues undeterred. Meanwhile, British American Tobacco boasts of creating biodiversity at its tobacco fields; however, it makes a product that kills millions of people.

To sex-up the new corporation’s social and environmental reputation, the new corporation pursues small scale sustainability projects with limited impacts but significant PR effects. Yet, the new corporation talks differently compared to old corporations. It creates a patina of plausibility for vastly exaggerated claims to be environmentally friendly – corporate greenwashing.

Even corporations like BP now declare that we believe climate change is real. Their semi-delinquent off-sider ExxonMobil will have pumped 25% more oil and gas by 2025 compared to 2017. To camouflage this, the new corporation presents itself as solution providers and no longer as a problem creator. This marks a fundamental shift in corporate PR, which is designed to stave off urgent, and far-reaching measures scientists are calling for to prevent global warming.

This is what Great Thunberg calls, CEOs are making it look like real action is happening, when in fact, almost nothing is being done, apart from clever accounting and creative PR. A good example of this, as well as the new corporation, is Larry Fink – CEO of BlackRock investment – managing nearly $7 trillion in assets. Seven trillion looks like this: 7,000,000,000,000.

By comparison, Japan’s nominal GDP was $5.15 trillion in 2020. The man who is more important than Japan says he wants to dump bonds and stocks that generate more than 25% of revenue from coal production. An admirable goal. Yet, dumping coal is a shrewd business move as coal stocks have tanked. What is presented as a great CSR and environmental move is barely good PR and an economic necessity.

Worse still, Nestle also known to some as the baby killer company is not only the world’s largest food and beverage company, Nestle has also announced to rebrand itself as a nutrition, health, and wellness company. Even better is Volkswagen and its Internet video celebrating the company’s anti-corruption crusade saying, all we ask you is to follow the rules. Yet still better is the fact that Volkswagen ranked among the top-ten companies with the best CSR reputation by Forbes magazine. Volkswagen has also won an award at the World Forum for Ethics in Business.

Not long after all that, Volkswagen pleaded guilty to charges of conspiracy to commit fraud, obstruction of justice, and falsifying statements. Dieselgate damaged the corporation’s clever PR – for a while. These business-as-usual scandals committed by Volkswagen and many other corporations have made it abundantly clear that over the last two decades, corporations have been on a crime spree. Simultaneously, they are claiming they have become conscious and caring. The new corporation uses environmental PR – corporate social responsibility – to smokescreen profit-making and global environmental vandalism.

To understand corporate (mis)behaviour, it is imperative to realise what the new corporation is doing is part of a textbook-style cost-benefit calculus that incentivises corporate lawbreaking. Yet, it explains why most corporations commit offences – some routinely. Worse, much of this is purposely engineered under the neoliberal ideology of self-regulation. The prevailing mantra is self-regulate rather than be regulated.

Under the neoliberal ideology of governmental deregulation, corporate self-regulation is about the freedom of the new corporation to create its own rules, to decide if and when and how to follow them. Secondly, it is about preventing the government’s mandatory edicts. The 737 Max crashes, for example, shows how this operates. It is a stark and tragic reminder of what happens when governments retreat from regulation and leave corporations to regulate themselves.

Virtually the same occurred in the case of the UK’s Grenfell Tower fire. Before the fire in 2017, an all-party government committee called for regulation requiring apartment buildings to have fire-resistant cladding and sprinklers. The government simply said, no! Three years later, the Grenfell fire killed 71 people. The building’s exterior had been fitted with cheap flammable cladding. There were no sprinklers. This is how neoliberalism works. It increases corporate profits and lowers costs for governments. Everyone wins except the people who die.

Ideologically even better is recycling – the ultimate swindle. Recycling remains one of the greatest tricks that corporations have ever played. Many people know by now that recycling doesn’t work because much of what goes into recycling bins ends up in landfills or is burned. Yet, recycling is the ultimate trickery. Waste corporations and governments make people believe they do something for the environment.

Meanwhile, the new corporation can carry on overloading us with unnecessary packaging, plastic bottles and the like. The genius of the entire scam is a triple whammy. Firstly, consumers buy expensive rubbish and pay twice. Once for packaging and a second time for disposing of it. Thirdly, the entire scam is presented as environmentally friendly.

Much of this is part of a larger narrative that plays into the hands of the new corporation while simultaneously preventing real action towards sustainability. Virtually, the same goes for fairwashing, which occurs when fair trade masquerades corporate profits while helping multinational corporations. Some NGOs have been made part of the corporate structure. The corporate goal is to make sure NGOs no longer criticise and challenge corporations. Instead, they become co-operators and supporters. Simultaneously, NGO involvement cultivates the belief that we’re making progress. In strategic management, this is called stakeholder inclusion. The new corporation favours l’idée fixe of stakeholders.

Unlike neoliberalism that uses and abuses democracy, the new corporation has no space for democracy. It simply does not need democracy. As a consequence, there is no room for democracy in the ideological narrative of the new corporation. Yes, by letting corporations liberate themselves from democratically controlled regulation, we create a profoundly anti-democratic space for the new corporation.

Ultimately, the goal of the new corporation is to change society from having corporations towards being a mere appendage to the new corporation. The new corporation will no longer serve society. Instead, society will serve the new corporation. As this advances, the democratic space of society retreats and the lifeworld shrinks. Super philanthropist Bill Gates calls this stretching the market. It converts public goods into corporate goods which are for sale.

Of course, as the market advances, equality retreats. In 1980, the top 1% and the bottom 90% owned roughly the same share of wealth in the USA: 32% and 34%. By 2015, this had changed dramatically. The proportion was 40% and 21%. The rich were made richer while the middle-class was made poorer even though plenty of middle-class voters voted for Ronald Reagan in 1980 who together with Thatcher (UK) and Pinochet (Chile) turned a wired fringe dogma of neoliberalism into reality.

Perhaps it is just as Seattle Councillor Kshama Sawant says, you do not need a PhD in economics to know that your life sucks under capitalism. Yet, when the Coronavirus pandemic hit the world in 2020, the very opposite happened to what horror films showed and US preppers, and survivalists in their can-food-bunkers thought would happen. Instead of turning humanity into flesh-eating zombies, the pandemic has turned millions of people into good neighbours. Ten-year-olds went shopping for their elderly neighbours, and others shared toilet paper. Society did not collapse. Instead, Pëtr Kropotkin’s Mutual Aid prevailed.

In the end, the cure for the new corporation might be to reinvigorate and deepen democracy to ensure democracy controls the new corporation rather than society being controlled by it. Yet, the new corporation still tells an attractive vision of a corporate society, but in reality, it is a veneer for rampant corporate capitalism.

Having just turned 92, none other than Noam Chomsky‘s words on Joel Bakan’s book The New Corporation ring through. Chomsky wrote on the cover, a very important book, an arresting study directed to a central issue of our times.  

 https://www.counterpunch.org/2020/12/18/the-new-corporation/