Provoking, witty, sweepingly informative, The Corporation explores the nature and spectacular rise of the dominant business institution of our time. Footage from pop culture, advertising, TV news, and corporate propaganda, illuminates the corporation’s grip on our lives. This documentary begins with a legal detail that came from the 14th Amendment: Under constitutional law, corporations are seen as individuals. So, filmmaker Mark Achbar asks, what type of person would a corporation be?
What Is a corporation?
A bit of history to complement the documentary: The Corporation. It is natural to think of an organization as having a collective identity distinct from that of any particular person who owns or belongs to it. The Romans recognized this with the notion of a corporation. The word corporation derives from the Latin word corpus for body, representing a body of people authorized to act as an individual.
Most Roman corporations served exclusively community or religious purposes. It is not until the 16th century that the first real trading corporations emerged in The Netherlands and England to challenge the might of Spain and Portugal. The upstarts were chartered corporations, which had their roots in guilds.
During the middle ages, guilds were chartered primarily to enforce a monopoly in certain businesses or geographic regions (like metal work in the city of Sienna). In exchange for a grant of monopoly, a guild would make ongoing fee payments to its chartering authority (lords, city or church). Members of a guild might compete with one another, but outsiders were excluded.
Traders also formed guilds. Their purpose was to secure from the government a grant of monopoly over trade with specific geographic regions. In England, such guilds were called regulated companies. They were often referred to by names reflecting their monopolies—the India Company, African Company, Russia Company, Turkey Company, etc.
The members of trading corporations might compete with one another, but they often formed short-term partnerships to conduct specific voyages. Also, a regulated company might sponsor voyages, which it would open to all members. Because these voyages were the company’s own ventures, participants enjoyed limited liability. Equity subscriptions were offered to members, but additional capital could be raised from outsiders, who would pay a nominal “membership fee” in addition to their investment. Members would then outfit and man the ships (board of directors). Regulated companies that sponsored equity-financed voyages came to be called joint-stock companies.
Two early joint stock companies were Holland’s and England’s respective East India Companies, which were chartered to challenge Portugal’s dominance of the spice islands. Initially, neither company had permanent equity. Each voyage would have its own equity subscription. This proved impractical, and soon capital from one voyage was being rolled over to finance subsequent voyages. In this way, the companies evolved to become much like today’s business corporations. They had separate managers and investors. Members gradually became an anachronism, taking on more the role of an employee base.
The joint-stock corporations cultivated influence at the highest levels of government. The Queen and nobility had significant investments in the English and Dutch East India Companies, and they looked out for the company’s interests in the halls of government. (Like they still do for companies like shell) The joint-stock companies continued the guild practice of making ongoing payments to the state. In this we may perceive the origins of corporate taxation, Since then the founding principles of a corporation have remained unchanged. Below are some key points.
- A corporation is a form of business operation that declares the business as a separate, legal entity guided by a group of officers known as the board of directors.
- The ultimate owners of a corporation are the share or stockholders.
- A corporation is legally a person, but that doesn’t mean it thinks or acts like a person. First of all, corporations are responsible only to their shareholders. They make money. So a corporation would be a servant, a slave-person if a person.
- The main reason for forming a corporation is to limit the liability of the owners.
- A Corporation offers the most flexibility of raising capital.
What is the problem with today's corporations?
Covering the litany of corporate failures this century, from the Enron scandal to the global financial crisis and the Fukushima and Gulf of Mexico disasters, and the current global enviromental crisis, the documentary The Corporation shows that there is a common underlying problem and a common set of solutions to fix them.
The problem for corporations is they have to balance the interests of different parties – of the employees, of the customers, of the local communities – alongside the compelling interests of their shareholders, and getting that balance right is critical.”
The critical element in that balance is the mentality of investment capital around a corporation (shareholders).
the major problem of the past two to three decades has been the “hijacking” of corporations by shareholders – and in particular short-term shareholders.
- Especially in he age of Globalization, it is critical that corporations are run in the interests of society, customers and employees, not simply focused on maximizing the returns of their shareholders.
- High frequency trading jeopordizes this “ethical” focus.
About Part I
Part I of The Corporation outlines the emergence of corporations as an entity, and more importantly, the treatment they receive as “persons” under the law. To assess the “personality” of the corporate “person,” a checklist is employed, using diagnostic criteria of the World Health Organization and the standard diagnostic tool of psychiatrists and psychologists. The operational principles of the corporation give it a highly anti-social “personality”: it is self-interested, inherently amoral, callous and deceitful; it breaches social and legal standards to get its way; it does not suffer from guilt, yet it can mimic the human qualities of empathy, caring and altruism. The Corporation then goes on to outline how corporations, not held fully accountable under law, are buying up the planet, engage in irresponsible advertising, and punish whistleblowers.
About Part II
Part II of The Corporation looks at how corporations have often tried to undo democracy if it is an obstacle to their drive for profit. From a 1934 business-backed plot to install a military dictator in the White House (undone by the integrity of one U.S. Marine Corps General, Smedley Darlington Butler) to present-day law-drafting, corporations have bought military might, political muscle and public opinion. But from massive international protests to local ballot initiatives, a movement is growing to strip corporations of their stranglehold on power.
Winner of 24 INTERNATIONAL AWARDS including IDFA special jury prize, 10 of them AUDIENCE CHOICE AWARDS including AUDIENCE AWARD for DOCUMENTARY in WORLD CINEMA at the 2004 SUNDANCE FILM FESTIVAL